An update to a product offered by global cyberscurity firm CrowdStrike appeared to be the trigger, affecting customers using Microsoft's Windows Operating System.
Microsoft said later on Friday the issue had been fixed.
CrowdStrike CEO George Kurtz said on X the company was "actively working with customers impacted by a defect found in a single content update for Windows hosts" and a fix was being deployed.
"This is not a security incident or cyberattack," Kurtz said in the post.
CrowdStrike is actively working with customers impacted by a defect found in a single content update for Windows hosts. Mac and Linux hosts are not impacted. This is not a security incident or cyberattack. The issue has been identified, isolated and a fix has been deployed. We…— George Kurtz (@George_Kurtz) July 19, 2024
Early on Friday, major US airlines - American Airlines , Delta Airlines and United Airlines - grounded flights, while other carriers and airports around the world reported delays and disruptions.
Banks and financial services companies from Australia to India and Germany warned customers of disruptions and traders across markets spoke of problems with executing transaction.
"We are having the mother of all global market outages," one trader said.
In Britain, booking systems used by doctors were offline, multiple reports posted on X by medical officials said, while Sky News, one of the country's major news broadcasters was off-air, apologising for being unable to transmit live, and football club Manchester United said on X it had to postpone a scheduled release of tickets.
Microsoft's cloud unit Azure said it was aware of the issue that affected virtual machines running Windows OS and the CrowdStrike Falcon agent getting stuck in a "restarting state", amid an ongoing global outage.
"We're aware of an issue affecting Windows devices due to an update from a third-party software platform. We anticipate a resolution is forthcoming," a Microsoft spokesperson said.
In an alert to clients issued on Friday, CrowdStrike said its "Falcon Sensor" software was causing Microsoft Windows to crash and display a blue screen, known informally as the "Blue Screen of Death".
It also shared a manual workaround to rectify the issue.
"This is a a very, very uncomfortable illustration of the fragility of the world's core Internet infrastructure," said Ciaran Martin, Professor at Oxford University's Blavatnik School of Government and former head of the UK National Cyber Security Centre.
The outages rippled far and wide.
Airports in Singapore, Hong Kong, Thailand and India said the outage meant some airlines were having to check in passengers manually.
Travellers in North America, Europe and Asia have faced delays and cancellations due to the outage. (AP PHOTO)
Amsterdam's Schiphol Airport, one of Europe's busiest, said it was affected, while airline Iberia said it had been operating manually at airports until its electronic check-in counters and online check-ins were reactivated.
Some athletes and spectators descending on Paris for the Olympics were delayed, but Games organisers said disruptions were limited and did not affect ticketing or the torch relay.
The Dutch carrier KLM said it had been "forced to suspend most" of its operations.
Hospitals in several countries also reported problems, with Britain's National Health Service said the outage caused problems at most doctors' offices across England.
Some hospitals in northern Germany cancelled all elective surgery scheduled for Friday but emergency care was unaffected.
Israel said its hospitals and post office operations were disrupted.
In South Africa, at least one major bank said it was experiencing nationwide service disruptions as customers reported they were unable to make payments using their bank cards in stores.
The New Zealand banks ASB and Kiwibank said their services were down as well.
While there were reports of companies gradually restoring their services, analysts weighed the potential of what one called the biggest ever outage in the industry and the broader economy.
Shipping was disrupted too: a major container hub in the Baltic port of Gdansk, Poland, the Baltic Hub, said it was battling problems resulting from the global system outage.
"IT security tools are all designed to ensure that companies can continue to operate in the worst-case scenario of a data breach, so to be the root cause of a global IT outage is an unmitigated disaster," said Ajay Unni, CEO of StickmanCyber, one of Australia's largest cybersecurity services companies.
with AP
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