British Airways may be hit with a £100 million or more bill for compensation, lost business and additional customer care after an IT collapse affected over one thousand flights over the weekend.
Shares of the airline’s parent company IAG (LON:ICAG) fell 2.5% on Monday after flights returned to normal.
British Airways’ flights from Heathrow and Gatwick were grounded Saturday. While services resumed on Sunday, cancellations and delays continued. Approximately 200 flights were canceled in and out of Heathrow on Sunday. No flights were canceled at Gatwick, but passengers did experience some delays.
The carrier said a power supply issue caused the outage, and there was no evidence of a cyber attack. The airline also denied claims that its outsourcing of IT work to India played a part in the outage.
“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,” said Alex Cruz, British Airways Chief Executive, in a video posted on YouTube.
British Airways Cut Costs
The airline is planning to run over 95% of flights from Gatwick and Heathrow on Monday, Cruz said.
British Airways had been cutting costs in response to increased competition from easyJet (LONG:EZJ) and Ryanair.
The GMB union alleges that the airline’s IT systems had shortcomings after it began outsourcing to India in 2016.
Cruz rejects the claim, stating, “They’ve all been local issues around a local data center, which has been managed and fixed by local resources.”
Flight compensation claim websites estimate that BA’s bill may be at least £100 million. The airline handles about 120,000 passengers each day out of Gatwick and Heathrow. Some passengers are likely to be entitled to accommodation and meals while waiting for their delayed flights. Many will also be seeking refunds.
Several passengers lost their luggage during the chaotic weekend, but BA has pledged to reunite passengers with their belongings. The carrier warned, however, that the process could take some time.