Delta cancels hundreds more flights, expects normal operations soon

By Jeffrey Dastin

(Reuters) – Delta Air Lines Inc <DAL.N> on Wednesday canceled more than 300 flights and upended thousands of travelers’ plans for the third day in a row after a power outage hit its computer systems, though it forecast a return to normal operations later this afternoon.

Delta, the No. 2 U.S. airline by passenger traffic, said systems that allow customer service agents to process check-ins and dispatch aircraft are now functioning normally. Most of Wednesday’s delays and cancellations are the result of flight crews being displaced or running up against maximum allowed work hours, it said.

As of 2:30 p.m. EDT (1830 GMT), Delta said it had canceled 311 flights on the day, adding to the more than 1,600 cancellations since Monday. Another 2,540 flights departed on Wednesday, with 70 percent of them within 30 minutes of their scheduled times, the airline said.

“We’re in the final hours of bouncing back from the disruption,” Bill Lentsch, Delta’s senior vice president for airport customer service and airline operations, said in an online posting.

The travel havoc at one of the world’s largest carriers has brought into focus the vulnerability of airlines’ technology infrastructure. Experts say mergers – and sometimes insufficient investment in back-end technology – have left airlines with a hodgepodge of systems.

What is more, a drive by companies to automate operations, from mobile boarding passes to check-in kiosks, means the impact of any single glitch will multiply.

Delta said problems arose when critical systems did not switch over to a backup source following a power surge and outage on Monday.

The airline is still investigating the cause, Chief Executive Ed Bastian said in an online video post, adding that the company has invested “hundreds of millions of dollars” in infrastructure upgrades and backup systems.

“I’m sorry we let you down. We’ll do everything that we can to make certain this does not happen again,” Bastian said in the video.

“There have been no indications of a hack,” Delta spokesman Trebor Banstetter added in an emailed statement.

Shares were down 1.3 percent at $36.47 in late afternoon trading.

PASSENGERS FRUSTRATED

Frustrated fliers like Camille Davies-Mandel of Maplewood, New Jersey still faced multihour waits at airport lines on Wednesday.

“I have two kids with me, looking forward to getting to their cousins so they can seek out (characters) in Pokemon Go,” she said in a telephone interview after waiting three hours to check in at Newark Liberty International Airport. She was unable to download a boarding pass online and missed her flight.

Davies-Mandel said she appreciated Delta’s outreach on social media and messages from management, but she added “when you get on the phone and you deal with their customer service, that’s a whole different experience,” noting two calls took her four and a half hours.

Delta said it contacted some of its most frequent fliers who would be stuck in the disruption and offered them seats on its Delta Private Jets subsidiary to finish their journey.

Analysts expect passenger refunds, overtime hours for workers and other costs will reduce Delta’s profit this quarter. Daniel McKenzie, an analyst with the Buckingham Research Group, said in a research note that earnings per share may be 5 percent to 10 percent lower, or 10 to 15 cents per share below his prior estimate.

“Delta still remains the best operation in the industry by a wide margin,” McKenzie said, noting that the airline had canceled far fewer flights than rivals in recent years.

Other carriers have also suffered from technology issues.

Southwest Airlines Co <LUV.N> forecast on Wednesday a further drop in a key profitability metric for the quarter due to delays and cancellations of more than 2,000 flights after an outage hit its computer systems in July.

(Reporting by Jeffrey Dastin, additional reporting by Abinaya Vijayaraghavan and Arunima Banerjee in Bengaluru; editing by Maju Samuel and G Crossa)