IAG share price: British Airways failure caused by 'uncontrolled return of power'

Share

Passengers stand at a British Airways check-in desk after the airport suffered an IT systems failure, at London " s Gatwick Airport, Saturday, May 27, 2017.

Coby Benson, Flight Delay Legal Manager at Bott & Co, said: "British Airways have had several IT glitches over the last couple of years but nothing quite on the scale of this latest crisis".

Q: What happens if the airline cancels the flight?

The airline has said a "significant" number of passengers have still not been reunited with their luggage and those left without it can claim money back for essential items.

IAG has been battling tough competition, even as it has faced pressure on its earnings from a weaker pound following Britain's decision to leave the European Union. The company also issued a profit warning following the Brexit vote almost a year ago.

Silicon's Roland Moore-Colyer went on BBC Click Radio to discuss the BA outage, and while no clear conclusions were uncovered, there was definitely some solid speculations that could explain why BA has ended up in a rather costly and embarrassing situation.

A source in the company told the BBC: "It would be impossible to pretend that it was great".

They added: "The cost to the airline of £150m is only set to rise while BA work to fix the problem".

More news: Microsoft's Skype draws inspiration from Snapchat in big redesign

BA's chief executive Alex Cruz said a full investigation would take place into the failure which affected 75,000 passengers.

Airlines face challenges with their IT systems also due to linkages across their systems.

British Airways further insisted that the issue had not been an IT failure.

He'll be present as the new airline's first flight takes off from Barcelona to Los Angeles today. It was so strong it also rendered the back-up systems ineffective, he said.

"We invest billions in new equipment. An airline such as Ryanair, that is also financially successful, has more leeway to divert needed resources towards upgrading its IT systems".

Bott & Co said to LondonLovesBusiness: "Using the Bott & Co calculator database, which has a record of every single scheduled flight, we can see that there are approximately 800 BA flights per day leaving Heathrow and Gatwick, estimating that this could cost BA up to £150m". Its Twitter account rubbed salt into the wound with tweets that poked fun and added the hashtag "ShouldHaveFlownRyanair". Kenny Jacobs, Ryanair's chief marketing officer, told the BBC that airlines need clarity in terms of agreements underpinning worldwide air travel.

BA said: "We are undertaking an exhaustive investigation to find out the exact circumstances and most importantly ensure that this can never happen again". Salmon says the cost of compensation and refunds could well run into the tens of millions.

Share