Overview

On July 2025, Alaska Airlines, a major U.S. carrier based in Seattle, experienced a significant IT outage that led to a system-wide ground stop for all its flights, including those operated by its subsidiary, Horizon Air. The outage, which began around 8 p.m. Pacific Time and lasted approximately three hours, was caused by an unexpected failure of a critical piece of multi-redundant hardware at the airline’s data centers, manufactured by a third-party vendor. Operations resumed by 11 p.m. Pacific Time, but the incident resulted in over 150 flight cancellations and significant delays, with residual impacts expected to linger into the following days. This marks the second time in just over a year that Alaska Airlines has grounded its entire fleet due to IT issues, raising concerns about operational reliability and the broader implications for the airline industry.

Details of the Incident

The IT outage affected critical systems, including reservations, scheduling, and dispatch platforms, prompting Alaska Airlines to request a temporary ground stop for its fleet of 238 Boeing 737s and 87 Embraer 175s operated by Horizon Air. The Federal Aviation Administration (FAA) confirmed the ground stop, which impacted departures to over 200 destinations across the airline’s network. The outage led to chaotic scenes at major hubs like Seattle-Tacoma International Airport, where passengers faced long waits, crowded terminals, and limited rebooking options. One passenger, Grant Watts, reported being stranded on the tarmac at Denver International Airport for two hours before being deplaned.

Alaska Airlines clarified that the outage was not related to a cybersecurity incident, distinguishing it from recent events like the June cyberattack on Hawaiian Airlines (part of Alaska Air Group) or the broader Microsoft server issues reported on the same day. Instead, the airline attributed the disruption to a hardware failure, and it is actively working with its vendor to replace the faulty equipment. The company issued a statement apologizing for the inconvenience and emphasized that the safety of its flights was not compromised.

Business Impact

The IT outage has significant short-term and potential long-term implications for Alaska Airlines’ operations and financial performance:

1. Operational Disruptions: As of July 21, 2025, Alaska Airlines canceled 66 flights (7% of its scheduled operations) and delayed 110 flights (12%), according to FlightAware data. These disruptions affected thousands of passengers, with ripple effects expected as the airline repositions aircraft and crews. The cancellations and delays could lead to a loss of customer confidence, particularly among frequent flyers who rely on Alaska’s West Coast-heavy network.
2. Financial Costs: The direct costs of the outage include compensation for affected passengers, such as rebooking, refunds, or accommodations, as well as operational expenses tied to rescheduling crews and aircraft. Indirect costs, such as reputational damage and potential loss of future bookings, could further strain the airline’s financials. Alaska Air Group, Inc. (ALK) shares may face downward pressure in the stock market as investors assess the impact of recurring IT issues.
3. Customer Experience: Social media posts on X highlighted passenger frustration, with reports of chaotic scenes at airports and difficulties accessing Alaska’s website and app for rebooking. One user described the situation at Seattle-Tacoma Airport as “a mess,” with long lines and limited communication from staff. Negative customer experiences could erode Alaska’s strong brand loyalty, a key competitive advantage in the airline industry.
4. Recurring IT Challenges: This incident follows a similar IT outage in September 2024, which caused a two-hour ground stop in Seattle due to a certificate issue, and an April 2024 grounding caused by a problem with the weight and balance calculation system. The recurrence of IT-related disruptions raises questions about the airline’s infrastructure reliability and investment in technology upgrades.

Industry Context

The airline industry is no stranger to IT-related disruptions, as carriers rely on complex, layered technology systems for operations ranging from ticketing to crew scheduling. Recent incidents, such as the June 2025 cyber incident at WestJet Airlines and the July 2025 Qantas data breach, highlight the vulnerability of airlines to both cybersecurity and hardware failures. While Alaska Airlines confirmed that its outage was not related to the Microsoft server attacks reported on July 20, 2025, the timing of these events underscores the industry’s dependence on third-party vendors and the need for robust contingency plans.

The outage also comes at a challenging time for Alaska Airlines, which recently cleared regulatory hurdles for its merger with Hawaiian Airlines. The integration of the two carriers’ IT systems and operations may add further complexity, making it critical for Alaska to address underlying technology issues to avoid future disruptions.

Recovery Efforts

Alaska Airlines is taking several steps to mitigate the impact of the outage and restore normal operations:

• Hardware Replacement: The airline is collaborating with its third-party vendor to replace the faulty hardware and prevent future failures.
• Passenger Support: Alaska is prioritizing rebooking affected passengers and offering apologies for the inconvenience. Customers are advised to check flight statuses on the airline’s website or app before heading to airports.
• Operational Adjustments: The airline is repositioning aircraft and crews to minimize residual disruptions, though some delays and cancellations are expected to persist into July 22, 2025.

Business Recommendations

To prevent future incidents and strengthen its operational resilience, Alaska Airlines could consider the following:

1. Invest in Redundant Systems: Enhancing redundancy in critical IT infrastructure, including backup hardware and failover systems, could reduce the risk of system-wide outages.
2. Conduct Regular IT Audits: Proactive assessments of IT systems, particularly those provided by third-party vendors, could identify vulnerabilities before they lead to disruptions.
3. Improve Customer Communication: Clear, timely updates during outages, both at airports and through digital channels, could mitigate passenger frustration and maintain trust.
4. Leverage Data Analytics: Using data analytics to predict and manage operational disruptions could help Alaska minimize the impact of future incidents on its network.

Conclusion

The July 20, 2025, IT outage at Alaska Airlines highlights the critical role of technology in modern airline operations and the far-reaching consequences of system failures. While the airline acted swiftly to resolve the issue and resume operations, the incident underscores the need for robust IT infrastructure and contingency planning. As Alaska Airlines navigates the aftermath, including financial losses, customer dissatisfaction, and potential reputational damage, it must prioritize technology investments to ensure reliability and maintain its competitive position in the airline industry. Travelers are encouraged to monitor flight statuses closely as residual impacts may continue in the coming days.

Sources: Reuters, The New York Times, CNBC, Fox Business, Fast Company