Southwest Airlines Saved By Procrastination: How 32-Year-Old Software Protected Company From Microsoft Outage, CrowdStrike Issues
The airline sector was one of the hardest hit by the Microsoft Outage and CrowdStrike (NASDAQ:CRWD) issue on Friday.
While the issues have subsided in recent days, one airline may demonstrate its resilience and ability to avoid the outages that impacted its competitors.
What Happened: An update by CrowdStrike impacted industries and companies using Microsoft Corporation (NASDAQ:MSFT) software and cloud services on Friday.
The airline sector was hit particularly hard with Delta Air Lines (NYSE:DAL), United Airline Holdings (NASDAQ:UAL) and American Airlines Group (NASDAQ:AAL) all suffering outages and grounded flights due to the technology issues.
Southwest Airlines (NYSE:LUV) was not impacted by the tech issues and could come through as a winner.
According to a Digital Trends report, Southwest Airlines planes were still operating on Friday as other peers were grounded. The surprising reason is likely the fact that Southwest has been procrastinating on software updates in recent years.
Digital Trends reports that Southwest is using Windows 3.1, an operating system from 1992 from Microsoft.
The report mentioned that some of Southwest’s systems are still running on Windows 95 and Windows 3.1, which has been a recurring issue, prompting calls for the company to upgrade to newer systems.
"It should go without saying that Southwest needs to update its system, but in this case, the ancient operating systems seem to be doing the airline some favors to avoid a complete Y2K-level apocalypse," Digital Trends writes.
Why It's Important: Millions of travelers were impacted by the outage Friday, which led to cancelled flights and delays.
For airline companies, this means they will likely have to issue vouchers, refunds, and other compensations, impacting both current and future revenue. Additionally, they will probably face numerous customer complaints, despite the tech issues often being beyond their control.
Southwest escaping the same customer and revenue issues could set the airline company up well for the future.
The airline company is set to report second-quarter financial results on Thursday. The company could use the earnings report and conference call as an opportunity to highlight its strength in remaining operational during the major tech outage that impacted the sector.
LUV Price Action: Southwest shares are up 1.36% to $27.55 on Monday, versus a 52-week trading range of $21.91 to $37.40. Southwest shares are down 5.1% year-to-date in 2024.
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Photo: Around the World Photos/Shutterstock.com