Global business news twenty four hours a day at Bloomberg dot com, the Radio plus Mobile Act and on your radio. This is a Bloomberg Business Flash from Bloomberg World Headquarters. I'm Charlie Palette. Stocks are falling from a record. Banks and energy producers are retreating. We've got crude oil down two percent now dropping eighty six cents forty one ninety now on West Texas Intermediate crude gold up six ninety
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stocks with pin Box at Kathleen on Bloomberg Radio. Let's take stock of the airline industry. If you've been listening all week, you know that Delta Airlines computer systems shut down on Monday, the airline canceled more than a thousand flights. About ninety flights are canceled today. Let's find out more about airlines from Michael Sasso, airline reporter for Bloomberg News, joining us from Atlanta, Georgia. Michael, thanks very much for
being with me. Tell us a little bit about the UH, the glitch, the problem, the issues related not only to UH you not to Delta Airlines, but also I noted that July Southwest had a computer outage that it is blaming for some of its woes. What's going on with the airline computer systems? Right? Yeah, could be here, Um yeah, Delta.
Delta has has generally had a pretty good run of things in the last few years, has kind of been relativelyly immune to these computer glitches, but it kind of things got caught up to it the other day, and so far I think we're over or right around two thousand cancelations at Delta over the last three days. So that's a big deal to them. Delta prides itself on being the most reliable of the major for US airlines, so they've really been apologizing like crazy. Their CEOs made
to video recordings and now apologizing to customers. Uh and and yeah, what happened there? They're citing a power failure at their big computer data center here in in Atlanta.
They say that they basically some kind of a transformer blue cut power to their computers, and mysteriously their backup power also failed, and so they were without power to their data center for some period and and that kind of fouled up all of their systems, from their flight operations, their reservations, to customer service, and it just kind of a big mess. And you're right. Sal West Airlines had a similar incident just a couple of weeks ago that
it caused about twenty three hundred cancelations. And so it seems to be a recurring problem that that none of the airlines can can escape right now. Michael, in a recent story on Bloomberg that I recommend about Delta's system failure, you spoke with the Bob Edwards, the former chief information officer for United Continental Holdings. What did he say about this? Yeah, I was really enlightening. I was glad to get in touch with him, and he was. He was surprisingly candid.
He acknowledged that he had a number of issues himself. He said he retired, and he acknowledged it was an entirely voluntary He retired under pressure. United just had a number of problems computer and basically he doesn't know specifically, of course, what happened that at Delta, but he generally says that this this thing is likely to keep happening, not necessarily to Delta, but throughout the industry because it is the way he characterized it. The airline industry tends
to have um kind of older computer equipment. Uh, there's a little bit of reticence to upgrade things. Sometimes chief financial officers don't want to spend the money that might need to upgrade these systems, and and and all of these systems are just so interconnected, maybe unlike a factory, uh computer system or what. Once one system goes down on an airline, you know, a say the flight operations that kind of keeps track of aircraft, that will follow
up the reservations and in all the other systems. So they're very interconnected. In the whole industry is very susceptible to this kind of thing. Is there any redundancy that has been built into these systems? Well, there is. M Delta has taken a lot of heat over the last few days, people suggesting, you know, why didn't they have a redundant system? So why didn't ever redundant power source?
Why did they have redundant computers? Now, they came out very aggressively, I think it was yesterday and said, hey, we did have a redundant power source, but for some reason it gets very technical that redundant power source, it didn't work. And uh so that that's a question. Now. What Edwards, the former United ce IO, said was that, um, you know, these things Unfortunately, even even the best laid
plans can can fail. And and even when you have a redundant redundancy, it can you know, these a lot of things that get fouled up. Michael, is the consolidation of the airline industry also a culprit that they're trying to meld together a lot of legacy systems while they're flying their aircraft twenty four hours a day, seven days a week. I think that could be. I think it certainly was in United's case. United and Mr Edwards again he acknowledged that was a big problem when they pulled
together United in continental airlines. I mean you had they each of them had separate systems and they wind up going with believes United System, where uh, some feel like they should have gone with Continental System, and he acknowledged that that. You know, these things are very complicated and when you try to bring together two of these systems, you know that there's a lot of room for air Now. Now,
Delta merged with South I'm sorry, merged with Northwest. I believe that was an O seven or oh eight, So I mean they had ample time to to merge these things. I don't think that was an issue in the recent Delta event. Do you see them spending more money on these kinds of computer systems. I mean, if you're in the I T industry, should you be calling on the airlines right now and saying, hey, look, we've got something
that might be able to help you. Yeah, I would probably a good sales call to make right now, I do Delta. Delta again came out and uh Bastion their CEO, and one of his two recorded messages has said, hey, we've spent hundreds of millions of dollars in the last three years upgrading our technology. So they're saying they were
not remiss in doing this. But you know, particularly with Delta one, of the things I'm watching is they've got so much invested in their reliability and everything about what they sell to customers and businesses is we're number one in reliability. So you have to think that in some back rooin they're plotting out how to keep this from ever happening again. Thanks very much, Michael Sasso, airline reporter for Bloomberg. Shares of Delta down two percent. This is
Bloomberg coming up on taking stock. The Bank of England's plan is to keep calm and carry on buying is coming after the central bank said it will deal with a short fall in bond purchases. That's next