Cost of British Airways IT failure put at £80 million

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The cost of the power failure that hit British Airways’ IT systems last month has been put at “in the order of £80 million”, according to parent company IAG’s chief executive Willie Walsh.

Speaking at the group’s AGM Walsh said that the figure was “an initial assessment”, and that the market would be updated “at an appropriate time” with more details.

Walsh admitted that the disruption caused by the power failure – which affected some 75,000 passengers and led to the cancellation of 726 flights – had been “a dreadful experience for many of our customers”.

“We have launched an independent investigation into what happened and will provide an update when that investigation is completed,” said Walsh. “What we do know at this stage however, is that this failure had absolutely nothing to do with changes to the way we resource our IT systems and services.”

Away from the IT failure Walsh highlighted the recent launch of IAG’s low-cost, long-haul subsidiary Level, the response to which he said had been “fantastic both internally and externally”.

“The customer response was incredible with 52,000 tickets sold in the first 24 hours of sale,” said Walsh. “It was such an amazing figure that our competitors questioned whether or not it was true. I can assure you that it was – and ticket sales have gone from strength to strength since then.”

He added that additional Level aircraft and a new European base would be added next year, and said that “we’re convinced that the operation will go from strength to strength”.

IAG recently reported record first quarter profits of €170 million, up nearly 10 per cent on the same period last year.

Looking forward Walsh said that the UK government’s decision to support a third runway at Heathrow airport was “a great opportunity for IAG”, but warned that the cost of the new infrastructure “must not result in higher prices for consumers as they will ultimately pay for its development”.

iairgroup.com

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