IT failure to cost British Airways €91.5m

British Airways owner IAG has said a power outage that led to the cancellation of hundreds of flights last month probably cost it about £80m (€91.5m) in lost revenue and the expense of accommodating, re-booking, and compensating thousands of passengers.

The figure is based on an initial assessment and IAG will update the market on the exact figure in due course, Willie Walsh, the group’s chief executive said at its annual shareholder meeting yesterday.

“It was a dreadful experience for many of our customers and we are truly sorry,” Mr Walsh said in Madrid, adding that “BA passengers will be compensated as soon as possible.”

At least 75,000 travelers found themselves grounded over three days from May 27 as the UK carrier’s IT systems crashed.

Mr Walsh has said previously that the meltdown seems to have happened after an engineer disconnected a power supply at a data centre near Heathrow, causing a surge that resulted in major damage when it was reconnected.

Mr Walsh said that an independent investigation into the failure is progressing, while adding that there’s nothing to suggest the incident was connected to cost-cutting efforts ordered by BA chief Alex Cruz, or an attendant trend toward outsourcing some activities to less costly third-party providers.

Citigroup had estimated the expense of the outage at €100m, comprising €40m in lost revenue and €60m of customer compensation.

Bloomberg


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