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British Airways owner IAG says IT chaos cost £58m British Airways owner IAG says IT chaos cost £58m
(35 minutes later)
The IT failure at British Airways in May that left thousands unable to check in baggage cost it 65m euros (£58m), the airline's owner, IAG, has said.The IT failure at British Airways in May that left thousands unable to check in baggage cost it 65m euros (£58m), the airline's owner, IAG, has said.
About 75,000 passengers faced severe disruption when BA's system failed over the second Bank Holiday weekend in May.About 75,000 passengers faced severe disruption when BA's system failed over the second Bank Holiday weekend in May.
BA said it was caused by an engineer who disconnected a power supply.BA said it was caused by an engineer who disconnected a power supply.
Despite the extra cost, IAG still managed to report a 13.8% increase in half-year operating profits to 898m euros (£804m).Despite the extra cost, IAG still managed to report a 13.8% increase in half-year operating profits to 898m euros (£804m).
Operating profits at British Airways rose to 741m euros from 631m euros a year earlier.
IAG, which also owns Aer Lingus, Iberia and Vueling, said it expected operating profit for the whole of 2017 to show a double-digit percentage improvement.IAG, which also owns Aer Lingus, Iberia and Vueling, said it expected operating profit for the whole of 2017 to show a double-digit percentage improvement.
It said the amount of money it was making per passenger was up 1.5%, the first rise since 2014. Revenue per passenger was up 1.5%, the first rise since 2014.
'Strong results' 'Isolated event'
Costs included 65m euros of "additional compensation fees and baggage claims related to operational disruption at British Airways due to a power failure over the second May bank holiday weekend". The cause of May's power cut has not been fully explained. The company has asked an independent company to investigate.
However, employee costs were down 3.9% across the group as a whole, thanks to what the company called productivity and efficiency improvements. IAG chief executive Willie Walsh defended the company's effort to compensate passengers for the disruption caused by the IT failure.
BA has been affected by a series of strikes by "mixed-fleet" cabin crew, who are paid less and employed on different terms to those of longer-standing staff. "We are doing everything we can to make good the disruption that the customers experienced, but it was an isolated event and I think you've got to focus on the fact that BA's passenger numbers continue to increase," he told the BBC's Today programme.
IAG chief executive, Willie Walsh, told the BBC's Today programme: "I know we have had some individual issues and we clearly need to address those and apologise to our customers who were disrupted. "BA's underlying performance is actually very good, as are the performances of the other airlines within the group, so this is a very strong set of results and reflects a focus that IAG has on providing customer service at prices that customers are willing to pay."
"But the truth is BA's underlying performance is actually very good, as are the performances of the other airlines within the group, so this is a very strong set of results and reflects a focus that IAG has on providing customer service at prices that customers are willing to pay." Employee costs were down 3.9% across the group as a whole, thanks to what the company called productivity and efficiency improvements.
BA has been affected by a series of strikes by mixed-fleet cabin crew, who are paid less and employed on different terms to those of longer-standing staff.
Mr Walsh said Level - its new long-haul, low-cost airline which is based in Barcelona - was proving a success and the group planned to expand the operation.Mr Walsh said Level - its new long-haul, low-cost airline which is based in Barcelona - was proving a success and the group planned to expand the operation.