British Airways’ IT meltdown wipes £500m off value of owner IAG

IAG was four percent lower as trading in London opened for the first time since the bank holiday weekend’s widespread cancellations on BA’s network.

British Airways’ chief executive said he was “profusely” sorry for the computer system failure which he revealed had disrupted 75,000 passengers’ flights.

BA said its IT system was back up and running and that it expected to run a full flight schedule at Heathrow and Gatwick airports on Tuesday, but conceded there was still work to do to reunite a “significant number of passengers” with their missing luggage.

The company’s boss, Alex Cruz, told Sky News the power outage which caused the disruption was “a tragedy”.

Honeymooners stuck in Heathrow for three days

He denied claims from the GMB union the problems were down to BA cutting “hundreds of dedicated and loyal” IT staff and contracting the work out to India to save money.

Mr Cruz insisted those parties involved in the weekend’s problems had “not been involved with any type of outsourcing in any foreign countries”.

“They’ve all been local issues around a local data centre who have been managed and fixed by local resources,” he said.

British Airways has not revealed exactly where the data centre is that had the problem, but electricity suppliers SSE and UKPN have confirmed they did not experience a power surge at BA’s Heathrow hub or HQ nearby.

Mr Cruz said there was “no evidence whatsoever” a cyberattack was behind the computer problems.

He instead cited a “power surge” at around 9.30am on Saturday morning for the “catastrophic effect” on all of BA’s systems.

BA boss reacts to honeymooners’ delay

Passenger data has not been compromised, Mr Cruz said, and the problem has not led to concerns about access to the terror watch list for flights.

He said BA was operating more than 95% of its flights on Monday, with all of its Gatwick services and long-haul flights from Heathrow going ahead.

More than 90% of BA short-haul flights from Heathrow are also operating, while more than two-thirds of passengers affected over the weekend are expected to make it to their final destination by the end of the day.

Other passengers whose flights were disrupted will have the option to rebook for any time over the next six months.

:: Passengers describe airport pandemonium

Responding to the chaos that grounded scores of planes, Mr Cruz said: “We do apologise profusely for the hardship that these customers of ours have had to go through.

“We know that there have been holidays interrupted and personal events that have been interrupted and people waiting in queues for a really long time.

“We absolutely profusely apologise for that and we are absolutely committed to provide and abide by the compensation rules that are currently in place.”

Mr Cruz promised an “exhaustive investigation” into the meltdown, adding: “We’re absolutely committed to finding the root causes of this particular event and we will make sure nothing like this happens to British Airways ever again.”

:: ‘Worst honeymoon ever’: BA chaos spoils plans

 ‘British Airways ruined my honeymoon’

Experts predict BA is facing a huge compensation bill, estimated at more than £100m, over the disruption.

Customers have been left queuing for hours in packed terminals over the last few days and some had to bed down on terminal floors on Saturday.

Many complained of scant information from staff.

Mr Cruz was shown a Sky News video of a honeymoon couple who had been stranded for three days at Heathrow, causing them to miss the start of their cruise holiday.

He said: “We are extremely sorry and what we will do is make up and follow absolutely our obligations and provide as much flexibility as we can to them and the rest of the passengers that have been affected.”

The IT outage had a knock-on effect on BA services around the world, while passengers who did get onto flights from the UK reported arriving without luggage.

Airport worker threatens to call police on passenger

Video has emerged of a BA employee at Venice Airport threatening to call the police on a woman who asked about the policy on customers who do not have money to pay for hotel rooms.

Stacy Irish, who posted the footage on Twitter on 28 May, said: “I was told it has nothing to do with BA if customers can’t afford it. She then said she would call the police.”

Some experts expect the disruption to linger for several days, as planes and aircrew are returned to their positions and the backlog of passengers is cleared.

George Salmon, equity analyst at investment firm Hargreaves Lansdown, said: “BA may have confirmed that it is now running a full schedule of flights, but investors in IAG, BA’s parent company, are counting the cost of a calamitous Bank Holiday weekend.

“While the costs of passenger compensation and refunds could well run into the tens of millions, the whole sorry episode has undeniably put a dent in BA’s reputation for delivering a premium service, and the worry for shareholders is that this unquantifiable impact could have longer-term consequences.” –news.sky.com