1. Business
July 28, 2017

Bank holiday IT failure cost British Airways £58m

British Airways (BA) owner AIG reported a rise in profits despite an IT failure in May, which affected 75,000 passengers. As many as 726 flights had to be cancelled.

The system fault, caused by an engineer who disconnected a power supply according to BA, cost the airline £58m in additional compensation fees and baggage claims.

James Wilman, chief executive of the data centre consultancy Future-tech cast doubt on the company’s official line.

He told The Guardian in May:

It’s either bad design or there’s more to the story than just a power surge.

In June, IAG said it had commissioned an “independent company to conduct a full investigation” into the IT crash and is “happy to disclose details” of its findings.

Despite the extra expense resulting from the system failure, IAG reported a 13.8 percent increase in half-year operating profits to £804m.

IAG, which also owns Iberia, Aer Lingus, Vueling and Level, a new Barcelona-based low-cost airline, said it expected double-digit growth in operating profits for 2017.

Revenue per passenger was up 1.5 percent, the first jump since 2014.

Willie Walsh, chief executive of IAG said in a statement:

We’re reporting a very strong performance in quarter two. The underlying trend in unit revenue improved, benefiting partially from Easter and a weak base last year.

BA continues to be affected by a series of strikes by its mixed-fleet cabin crew as part of a long running dispute over pay and benefits.