System outage at Delta cost the airline $100 million in revenue

Delta Air Lines reported Friday a $100 million hit to its revenue caused by the system outage last month.

The Atlanta-based airline canceled about 2,300 flights in the wake of a power failure on Aug. 8 that was caused by misconfigurations of a backup power supply for its servers. About 300 of the airline's 7,000 servers weren't properly connected to the backup energy source.

The company announced the effects in a performance report it routinely issues at the start of a month.

Revenue is just one portion of the financial impact an outage can cause for an airline. Delta also incurred what will likely be hefty costs for the travel vouchers, overtime pay, hotel accommodations and more. The airline will likely report those expenses in its third-quarter results in October.

For Delta, $100 million is about 1 percent of its quarterly revenue, which was $10.4 billion in the second quarter and $9.3 billion in the first quarter of 2016.

Despite the massive disruption the outage caused and the three days it took the airline to get back to normal, Delta's main line completed 98 percent of all its scheduled flights last month. The company doesn't report the on-time performance of its regional affiliates, separate firms that operate short-distance flights under the Delta Connection moniker.

The airline's passenger unit revenue — a key metric in aviation economics — declined 9.5 percent in August from the same period a year ago. Delta attributed that drop to steep domestic competition from U.S. low-cost carriers, like Spirit and Frontier airlines, that pull away price-sensitive customers. The company also said there are too many flights being offered between the U.S. and Europe, forcing the airline to drop airfare prices.

"We are grateful to our customers for continuing to rely on Delta for the superior customer service and operational performance you've come to expect from us," said Ed Bastian, chief executive of Delta, in a statement. "Our recovery effort exemplified the hard work and determination of Delta people worldwide, and all 80,000 remain dedicated to regaining your trust."

Kristen Leigh Painter • 612-673-4767