British Airways Suffers Major Blow After IT Failure

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Big News

June 1, 2017

Following a massive IT failure that left 75,000 passengers stranded over a holiday weekend, the British flag carrier that once dubbed itself as “the world’s favorite” has suffered a massive blow.

The British flag carrier had to cancel all flights from London’s Heathrow, Europe’s busiest airport, and Gatwick on Saturday after a power surge knocked out its computer system, disrupting flight operations, call centers and its website.

While British Airlines has not commented on the total number of cancellations, flight compensation website said around 800 flights had been canceled at Gatwick and Heathrow over the weekend.

The problems persisted over the long weekend and the airline said that it had expected to run a full schedule from Heathrow and Gatwick on Tuesday.

On Monday, the airline’s Chief Executive Alex Cruz said that the power surge was so strong that it also rendered the back-up systems ineffective.

He, however, denied a suggestion from the local GMB union that the outage was linked to a decision to cut staff numbers and outsource work to India.

Mark Simpson, an analyst at Goodbody said, “British Airways’ IT failure over the weekend is clearly a PR nightmare and will take a real focus in terms of handling customer’s complaints and compensations claims in order to rebuild trust and confidence with the public.”

The airline would now have to work in the longer term to restore its reputation.

In recent months, British Airlines has come under fire for charging extra for food and baggage.

Further, the sight of stranded passengers trying to sleep on the floor of its Heathrow Terminal 5 building had the potential to do huge damage to its brand.

British Airlines is also facing increased competition from budget rivals Ryanair and easyJet.

According to Simpson, the estimated cost of the outage was 82 million euros ($91.6 million).

Meanwhile, Ryanair Chief Executive Michael O’Leary said his company saw very strong bookings over the weekend.

He, however, added that it was unclear if this was related to the BA problems.

Meanwhile, analysts at Deutsche Bank estimated that the costs of compensating passengers would be around 47 million euros and that the cost of restoring BA’s network had an upper limit of 15 million euros.

They, however, said that IAG’s management has been investing in renewing its IT systems, and expected customers to return to BA quickly as the incident was a “one-off.”

Deutsche Bank said in a note, “Whilst clearly a difficult weekend and week ahead for BA, we do not expect lasting damage to the franchise or long-term forecasts.”

Original headline: Once marketed as the world’s favorite, British Airways suffers major blow after IT failure

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