CrowdStrike hits airlines: Major drop in airline stocks

The aviation sector was among those most affected by the global software issue originating from the security service provider CrowdStrike. The European Aviation Overview Report, published by the European Organisation for the Safety of Air Navigation (EUROCONTROL), stated that the error originating from CrowdStrike on July 19 created a chain reaction affecting airlines and airports. This created additional pressure on routes that were already quite busy.

Combined with challenging weather conditions across much of Central Europe, this situation caused significant delays and disruptions across the continent, with flight delays reaching record levels.

Furthermore, the report pointed out that the global outage affected numerous airlines and airports. In the UK, Heathrow and Gatwick, among the largest airports in the country and the world, also experienced delays due to the outage.

1,200 DAILY FLIGHT CANCELLATIONS

According to data from the US-based website "FlightAware," the global software issue caused serious difficulties for commercial airlines, which operate an average of 90,000 flights per day worldwide.

On the day of the crisis, 5,171 flights were canceled, and 46,013 flights were delayed. While the global daily average for flight cancellations this year has been approximately 1,200, there was more than a 4-fold increase in flight cancellations on July 19.

The global software companies also incurred costs for airlines. Delta Air Lines Chief Executive Officer (CEO) Ed Bastian stated that the cost of the global software issue originating from CrowdStrike to the company was 500 million dollars.

DECLINES EXPERIENCED

Stating that they would seek compensation due to the disruptions, Bastian said, "We have no choice." The global software issue originating from CrowdStrike also increased selling pressure in global markets.

Thus, a general downward trend was observed in airline stocks last month. In July, shares of US airlines Southwest Airlines lost 5.8 percent, American Airlines 6.1 percent, and United Airlines 6.7 percent in value.

For investors, France's Air France lost 0.1 percent, and China's China Southern Airlines lost 1.7 percent. On the stock markets, a decrease of 3 percent was seen in Japan Airlines shares, 6.2 percent in South Korean Jeju Air shares, and 11.1 percent in Canadian Air Canada shares.

News Source: 12punto