Home / Articles / British Airways owner IAG says IT chaos cost £58m

British Airways owner IAG says IT chaos cost £58m

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. 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).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.Revenue per passenger was up 1.5%, the first rise since 2014.’Isolated event’The cause of May’s power cut has not been fully explained. The company has asked an independent company to investigate.IAG chief executive Willie Walsh defended the company’s effort to compensate passengers for the disruption caused by the IT failure.”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.”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.
Source: BBC News

About Business Ideas UK

My name is Joel Bissitt. I have been an entrepreneur for 24 years and have run many small businesses across various sectors. For the last 10 years I have worked mainly within online media, franchising and small business start-ups.

Check Also

Another 40 Poundworld stores to close

Forty more Poundworld stores are to close later this month, leading to the loss …

Free Franchise Guide
close slider

Free Franchise Guide

Interested in buying a franchise? The our FREE Franchise Guide is a must! The guide contains lots of information to help you decide if franchising is right for you.

Yes, I'd like to join the Franchise UK mailing list.