By Jonathan Stempel

May 6 (Reuters) - Delta Air Lines DAL.N must face a proposed class action by passengers who said it refused to offer full refunds after delaying or canceling their flights following a massive computer outage last July, a federal judge ruled on Tuesday.

U.S. District Judge Mark Cohen in Atlanta said five of the nine plaintiffs may pursue breach of contract claims based on Delta's failure to refund.

The judge allowed a different group of five plaintiffs to pursue claims related to delayed and canceled flights under the Montreal Convention, a multilateral treaty.

Cohen dismissed the remaining claims, including those he said were preempted by federal law.

The July 19, 2024 outage stemmed from a flawed software update from cybersecurity company CrowdStrike CRWD.O that crashed more than 8 million computers and affected many Microsoft MSFT.O customers.

Disruptions eased the next day for many U.S. airlines but lasted longer at Delta, which canceled about 7,000 flights.

"This ruling is a major step forward for Delta passengers seeking accountability," Joseph Sauder, a lawyer for some of the plaintiffs, said in an email.

Neither Delta nor its lawyers immediately responded to requests for comment.

The Atlanta-based carrier had sought the dismissal of all claims, aside from one refund claim and international travelers' claims under the Montreal Convention.

Passengers accused Delta of failing to provide automatic refunds following the outage, and providing partial refunds only if they waived further legal claims.

One plaintiff, John Brennan of Florida, said he and his wife missed a $10,000 anniversary cruise after Delta stranded them in an Atlanta layover, yet the carrier offered just $219.45 in compensation.

Another plaintiff, Vittorio Muzzi of the Netherlands, said he spent 5,000 euros ($5,685) and his luggage was delayed 15 days after Delta scrapped his flight to Florida from Amsterdam, yet the carrier offered just 588 euros ($669) in compensation.

Delta has estimated that the outage cost $550 million in lost revenue and added costs, while saving $50 million of fuel.

The case is Bajra et al v Delta Air Lines, U.S. District Court, Northern District of Georgia, No. 24-03477.

(1 euro = $1.137)

(Reporting by Jonathan Stempel in New YorkEditing by Bill Berkrot)

((jon.stempel@thomsonreuters.com; +1 646 223 6317; Reuters Messaging: jon.stempel.thomsonreuters.com@reuters.net))