British Airways shares plummet in fallout from IT meltdown

British Airways shares plummet in fallout from IT meltdown

British Airways boss Alex Cruz has been given the backing of IAG chief Willie Walsh as the airline continues to recover from an IT meltdown that left 75,000 passengers stranded over the bank holiday.

The reason for the chaos, which grounded all flights from Heathrow and Gatwick airports on Saturday, has been put down to a power shortage although some experts have questioned the explanation.

A cyber attack has been ruled out but BA faces reputational damage in the fallout after passengers slammed their handling of the situation as thousands of passengers missed flights and were left without their luggage.

Early trading on Monday saw £500 million wiped off the value of BA but it recovered to be worth £170 million less than before the weekend.

An £8 GDS booking fee for travel agents was quietly announced on the sunny Friday before the bank holiday, but the media storm surrounding the weekend’s event were worse that any hit the new surcharge could have made.

The compensation bill alone is expected to cost in the region of £100 million and some industry commentators say the knock-on effect on brand loyalty and reputation could be much worse.

John Strickland, director of independent transport consultancy JLS Consulting, said it was likely that BA would face a “significant financial impact” as its problems continue this week.

Willie Walsh, chief executive of parent company International Airlines Group (IAG) is yet to comment publically but a spokesman for the group said: “Alex has Willie’s absolute support. As far as Willie is concerned, this has nothing to do with the decisions Alex has made.”

The Telegraph said insiders at the airline told it that the power outage took place at a data centre on the outskirts of Heathrow and that in the recovery process an “uncontrollable” surge caused “catastrophic physical damage” to the system – but BA insists no data has been compromised.

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