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British Airways: Shares start to take off but will they go sky high?

by LLB Reporter
31st May 17 4:05 pm

The latest

British Airways owner, International Airways Group has seen their shares rise back to the level they were last Friday, before they suffered catastrophic turbulence with their world-wide IT outage.

Tuesday’s share price went as low as four per cent and were at the bottom of FTSE 100. By lunch time the share price went up to 612p to 1.07 per cent.

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.”

This sky-high bill could damage the airlines reputation as Damian Brewer of RBC Capital Markets said: “The bad PR and potential reputational aftermath will likely hit future revenues beyond the likely material impact on directly related costs”.

Brewer added that the IT trouble was “a very unhelpful development for BA customers – and hence IAG shareholders”.

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 seven days of the departure date, the claim amounts range from 125 Euros to 600 Euros.

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.”

Alex Cruz, BA’s chief apologised over the weekend and said they “make sure it doesn’t happen again.” However, serious questions are being asked as to how and why the back-up failed and what actually did cause the outage.

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