Is BA heading for a crash?
Last weekend’s world-wide computer outage causing chaos for thousands of passengers has seen its share price hit the bottom of the stock market Tuesday morning.
International Airlines Group saw their share price fall by four per cent and BA could be looking at compensation bill up to £150m, according to Bott & Co.
On Saturday, the computer outage affected at least 75,000 BA customers and all flights came to a sudden halt at Heathrow and Gatwick airports.
Passengers were being told “do not come to the airports” it was reported that the outage created delays in Rome, Prague, Milan, Stockholm and Malaga.
The national officer for aviation at the GMB union, Mick Rix said: “This could have all been avoided” as unions are blaming BA for creating the chaos as the IT was outsourced to India.
“In 2016 BA made hundreds of dedicated and loyal IT staff redundant and outsourced the work to India.
“BA have made substantial profits for a number of years, and many viewed the company’s actions as just plain greedy.”
Bott & Co said to LondonLovesBusiness: “Using the Bott & Co calculator database, which has a record of every single scheduled flight, we can see that there are approximately 800 BA flights per day leaving Heathrow and Gatwick, estimating that this could cost BA up to £150m.”
“£100m is the cost of compensation due to those affected and Bott & Co estimate an extra £50m could be due for care and assistance including hotel accommodation for stranded passengers and additional expenses such as couriers for baggage. “
They added: “The cost to the airline of £150m is only set to rise while BA work to fix the problem.”
Bott & Co have created a table detailing the amount passengers are entitled to if a replacement flight has been offered. As these flights are cancelled within 7 days of the departure date, the claim amounts range from 125 Euros to 600 Euros. View the table here.
Coby Benson, Flight Delay Legal Manager at Bott & Co, said: “British Airways have had several IT glitches over the last couple of years but nothing quite on the scale of this latest crisis. Passengers who have had flights cancelled will be eligible for compensation as we don’t consider this event to be an extraordinary circumstance.
“The specific criteria for amounts and delay lengths depend on whether alternate flights were offered or not and how long the delay ultimately lasted for.”
“BA can’t get away with refunding passengers and hoping that’s the end of the matter, they are obliged to provide compensation under Regulation 261/2004 and we’re preparing for a busy week helping passengers recover that compensation.”
BA’s chief executive, Alex Cruz said on Monday to the BBC that he will not resign as the power surge “only lasted a few minutes” however, the back-up system failed.
To the thousands of passengers that have been affected and that are still stranded, Cruz said he was “profusely sorry.” He also denies this had anything to with cutting IT costs.
British Airways posted this video on their Twitter page, Monday.
Our Chairman and CEO, Alex Cruz, apologises for the disruption caused by the recent IT system issues and… https://t.co/DRqwuM3SvF
— British Airways (@British_Airways) May 29, 2017