British Airways could face US$128 million compensation bill over IT meltdown

PUBLISHED : Monday, 29 May, 2017, 2:53pm
UPDATED : Monday, 29 May, 2017, 10:40pm

British Airways could face a bill of at least £100 million (US$128 million) in compensation, additional customer care and lost business resulting from an IT meltdown that affected more than 1,000 flights over the weekend.

All the airline’s flights from Heathrow and Gatwick were grounded on Saturday. Services resumed on Sunday but cancellations and delays persisted with about 200 BA flights in and out of Heathrow cancelled on Sunday, according to Guardian calculations. There were no cancellations at Gatwick but some passengers experienced delays.

The glitch is believed to have been caused by a power supply issue and there is no evidence of a cyberattack, the airline said.

In a video posted on YouTube, Alex Cruz, chief executive of BA, said that all the IT systems were not yet restored. “Many of our IT systems are back up today. All my British Airways colleagues on the ground and in the air are pulling out all the stops to get our operation back up to normal as quickly as we possibly can, we’re not there yet.

“I know this has been a horrible time for customers. Some have missed holidays, some have been stranded on aircraft, some separated from bags and some stuck in long queues while they have waited for information. On behalf of everyone at BA I want to apologise for the fact you’ve had to go through these very trying experiences,” said Cruz.

James Walker, chief executive of free flights compensation claim site Resolver, said BA handled about 120,000 passengers a day in and out of Heathrow and Gatwick alone, indicating a bill of close to £50 million for delays of more than three hours under EU-backed compensation rules.

About half of those passengers were likely to be entitled to meals and accommodation while waiting for delayed flights and a number will have sought a refund or decided to avoid using BA as a result of a “loss of trust”.

BA has also pledged to reunite hundreds of thousands of items of luggage caught up in the delays with passengers via a free courier service adding further to costs.

Walker said there was no question that BA would have to pay out compensation under the EU scheme which demands payments for flights delayed by at least three hours as a result of reasons within the airline’s control.

“This is not like an ash cloud or traffic controllers’ strike that can’t be predicted. The computer system breaking down is within its control. BA is going to have to pay out and it looks like its costs will be north of £100 million.”

Last year, the US airline Delta said it lost US$100 million after the shutdown of power to its data centre because an equipment failure led to delays.