‘Technical Glitch’ Grounds Thousands of United Flights, Halts NYSE Trading

Markets React To Vote In Greece Rejecting Terms Of Bailout
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John Hayward

On Wednesday morning, United Airlines suffered a significant computer problem that caused some 3,500 flights to be delayed for up to two hours. A “technical glitch” forced the New York Stock Exchange to halt all trading merely hours later, with little detailed explanation.

“The problem caused the FAA to impose what is known as a ground stop at 8:26 a.m. ET, meaning United flights were not allowed to take off,” CNN reported. “It lifted the stop for feeder airlines that fly under the name United Express about 15 minutes later, but it took until just before 9:47 a.m. for the ground stop to be lifted for United flights.”

The CNN report adds that United agents were forced to hand-write tickets for passengers at several airports.

The problem highlights how powerful and delicate these airline computer systems are, which is something to keep in mind as we consider the problem of hacker mischief and cyber-warfare, although there doesn’t seem to be any indication of deliberate sabotage in this case.

“Automation software is complex, sometimes involving millions of lines of computer code. But all it takes is a single error – even misplaced text – to grind it to a halt,” CNN theorizes, although few details have yet been released about exactly what caused the problem.  The FAA described it as an “automation issue,” while United’s statement on the matter says they experienced a “network connectivity issue.”

8 A.M. Eastern time was an especially bad time frame to have such a flight-grounding glitch. United also had a flight-grounding glitch just last month, when an “automation issue” delayed takeoffs for less than an hour. Noting several other glitch outbreaks over the past few years, Bloomberg Business suggested the airline might be struggling with ongoing integration problems of some sort after its 2010 merger with Continental.

Needless to say, passengers were not happy with the service disruption during busy commuter hours. The Boston Globe collected some unhappy reactions at Logan Airport, including grumbles that United was not responding well to passenger complaints on social media. Not to either condemn United or exonerate them completely, but the challenges of customer service have certainly changed quite a bit, now that virtually every frustrated passenger is carrying a computer device that allows them to instantly hit company social media pages or call their human operators with complaints.

Meanwhile, in what appears at the time of this writing to be a coincidence, the New York Stock Exchange also suspended trading on Wednesday morning due to an “apparent technical issue,” as CNBC put it.

“NYSE/NYSE MKT has temporarily suspended trading in all symbols. Additional information will follow as soon as possible,” said the official statement on the Exchange’s status page. All open orders are canceled.

The NYSE director of floor operations told CNBC that his team had “a little bit of a bumpy day,” experiencing some “technical problems even before the opening.” Whatever technical problems might have occurred, the ongoing financial crisis in Greece and sudden meltdown of the Chinese stock market were probably already causing some of those bumps.

Just to make things really interesting, as of noon Eastern Time, the Wall Street Journal’s web page was also down.  Again, there is no firm reason yet to believe these incidents are all connected, but hacker groups have gone on multi-website rampages before.

Update, 12:15 PM EST: Two U.S. government officials told NBC News they see “no indication of cyberattack or connection between United Airlines and NYSE service outages.”

Update, 12:30 PM EST: The Wall Street Journal came back up, and mentioned in its report on the NYSE trading halt that it “came amid a broad selloff in shares that was spurred by a deepening decline in China’s stock market.”  However, the Journal concedes that it remains “unclear what’s causing the disruption.”  NASDAQ remains operational, and says it has been able to trade NYSE-listed companies.

Update, 12:45 PM EST: Bloomberg Business reports that both the New York Stock Exchange and the Department of Homeland Security say the problem is an “internal technical issue” and is not the result of a cyberattack.

Update, 1:45 PM EST: Whatever else we learn about the New York Stock Exchange glitch, it’s clear there will be some financial damage to clean up…

Update, 3:30 PM EST: After more than three hours, the NYSE resumed trading at 3:10 in the afternoon.  Acknowledging the widespread speculation that it might have been some sort of cyber-attack, Fox News quoted a law enforcement source repeating the official position that “the technical glitch that prompted the halt at the exchange does not appear to be malicious, but federal law enforcement officials are continuing to monitor the situation.”

However, Fox also had quotes from experts who weren’t so sure hostile action could be completely ruled out yet.  Bryan Finch of Pillsbury Winthrop Shaw Pittman observed that while a technical glitch – perhaps caused or exacerbated by the Chinese situation and global market volatility – remained the most likely explanation, the NYSE systems are simply too large and complex to make any firm pronouncements yet: “We need more information to know an answer, and right now [we] don’t have enough to make a hard decision.”

On the other hand, Cendrick Leighton, CEO of a risk management consulting firm with experience in cyber-attacks, remained “very suspicious” of the timing: “This is too coincidental. You have United, NYSE, and Wall Street Journal so my suspicion is something is going on here. My suspicion is this was a test run by a cyber-hacker or potentially from a nation state.”

Now that the Exchange is up and running, it’s not surprising to see cyber-security stocks immediately surging.

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