British Airways could have to pay £100m compensation bill to passengers due to its huge IT failure
British Airways could face a bill of at least £100 million in compensation for its passengers affected by the cancellations and delays caused by its IT systems failure. The problem, perhaps caused by a loss of electric power, which then lead to most systems not working, resulted in BA flights around the world being unable to take off, passengers unable to check in, even the website not working. The problem affected Heathrow the most in England, as the largest base for BA. Gatwick was also affected. In total about 1,000 flights were affected, with problems likely to last several days more, while systems are fixed and planes get back into the right places. As this computer fault is entirely the fault of BA (and not any sort of “act of God”) BA will be liable to pay full compensation, to anyone delayed over 3 hours. The airline was particularly busy as it was the start of the school half term, and also a Bank Holiday weekend, with people flying for weekends away. The GMB union said the problem had been caused in part because BA made many good IT staff redundant in 2016, to save money. They instead outsourced the work to India. Besides the huge cost of compensation (and improving its IT resilience) BA will have suffered serious reputational damage, with many saying they would avoid ever flying with BA again.
British Airways could face a bill of at least £100m in compensation, additional customer care and lost business resulting from an IT meltdown that affected more than 1,000 flights over the weekend.
All the airline’s flights from Heathrow and Gatwick were grounded on Saturday. Services resumed on Sunday but cancellations and delays delays persisted with about 200 BA flights in and out of Heathrow cancelled on Sunday, according to Guardian calculations. There were no cancellations at Gatwick but some passengers experienced delays.
The glitch is believed to have been caused by a power supply issue and there is no evidence of a cyber-attack, the airline said.
In a video posted on YouTube, Alex Cruz, chief executive of BA, said that all the IT systems were not yet restored. “Many of our IT systems are back up today. All my British Airways colleagues on the ground and in the air are pulling out all the stops to get our operation back up to normal as quickly as we possibly can, we’re not there yet.”
“I know this has been a horrible time for customers. Some have missed holidays, some have been stranded on aircraft, some separated from bags and some stuck in long queues while they have waited for information. On behalf of everyone at BA I want to apologise for the fact you’ve had to go through these very trying experiences,” said Cruz.
As hundreds of passengers remained stranded, the GMB union blamed job cuts at BA for the IT problems which were thought to relate to a power outage.
Mick Rix, GMB national officer for aviation, said: “This could have all been avoided. BA in 2016 made hundreds of dedicated and loyal IT staff redundant and outsourced the work to India. BA have made substantial profits in for a number of years, and many viewed the company’s actions as just plain greedy.”
Both Gatwick and Heathrow advised passengers to check the status of their flights after terminals became congested with travellers hoping to get away for the long weekend and half-term school holiday. BA was asking passengers not to turn up until 90 minutes before their flights because of the level of congestion at Heathrow.
On Sunday morning, Welsh international table tennis player Chloe Thomas, whose 7.30am flight from Heathrow to Germany for the World Table Tennis Championship in Düsseldorf was cancelled at the last minute, described chaotic scenes.
“It’s chaos, people are running about all over the place trying to rebook,” she told Press Association. “There’s no one to help, no leadership. There are lots of people everywhere. There’s nowhere to sit, so people are just lying on the floor, sleeping on yoga mats.”
She said airport staff had handed out mats, as well as thin blankets, for people who were stuck there overnight. She added that one of the shops had sold out of food. Passengers faced long lines to check in, rebook or find lost luggage.
James Walker, chief executive of free flights compensation claim site Resolver, said BA handled about 120,000 passengers a day in and out of Heathrow and Gatwick alone, indicating a bill of close to £50m for delays of more than three hours under EU-backed compensation rules.
About half of those passengers were likely to be entitled to meals and accommodation while waiting for delayed flights and a number will have sought a refund or decided to avoid using BA as a result of a “loss of trust”.
BA has also pledged to reunite hundreds of thousands of items of luggage caught up in the delays with passengers via a free courier service adding further to costs.
Walker said there was no question that BA would have to pay out compensation under the EU scheme which demands payments for flights delayed by at least three hours as a result of reasons within the airline’s control.
“This is not like an ash cloud or traffic controllers’ strike that can’t be predicted. The computer system breaking down is within its control. BA is going to have to pay out and it looks like its costs will be north of £100m.”
Last year, the US airline Delta said it lost $100m after the shutdown of power to its data centre because an equipment failure led to delays.
John Strickland, director of independent transport consultancy JLS Consulting, said it was likely that BA would face a “significant financial impact” as its problems looked set to continue into this week.
BA indicated it was expecting continued disruption as its website said customers due to fly on Monday and Tuesday could rebook for dates up to November this year, even if their flights were operating.
Problems remain with the airline’s IT systems, including its customer call centres and website as well as operations planning. It also takes time for BA to ensure planes and staff are in the right place. Crew working patterns are also governed by strict regulations on rest and working hours.
“It’s the magnitude and scale of the problem. Even if BA’s IT systems were fully operational now it will take some days to fully restore a normal flying programme.”
Strickland said Heathrow was worst affected because it is the biggest BA hub and handles more long haul flights.
BA was unable to respond to queries about the financial impact or the number of flights cancelled on Sunday but a spokesman said: “We would never compromise the integrity and security of our IT systems.”
A CEO: Power supply issue caused IT outage
The problem was so serious that the airline canceled all flights from its London Heathrow hub and from London Gatwick, until 6 p.m. local time Saturday. BA also warned all passengers intending to travel before then not to go to the airports. The problem was made more severe by the fact that the UK is on a public holiday weekend, combined with the start of the school half-term holidays in many parts of England, when many families travel for an early summer break.
The incident follows similarly disruptive IT outages at US airlines last year that affected Delta Air Lines and Southwest Airlines. BA suffered a computer check-in problem in September 2016 that also caused major delays, although not wholesale cancellations.
In Saturday’s event, BA passengers complained of difficulty in getting information from airline staff at airports. The airline’s website was also down and passengers were unable to access the airline’s mobile app. Some travelers were held on board aircraft for lengthy periods as aircraft backed up at Heathrow and Gatwick, unable to depart or find a gate.
“We have experienced a major IT system failure that is causing very severe disruption to our flight operations worldwide,” the airline said in a statement. “The terminals at Heathrow and Gatwick have become extremely congested and we have cancelled all flights from Heathrow and Gatwick before 6 p.m. UK time today, so please do not come to the airports. We will provide more information on ba.com, Twitter and through airport communication channels as soon as we can for flights due to depart after that time. We are extremely sorry for the inconvenience this is causing our customers and we are working to resolve the situation as quickly as possible.”
Later in the day, Cruz apologized on the airline’s Twitter account for the “huge inconvenience” the outage had caused to passengers. He added that the root cause of the outage appeared to have been a power supply issue, rather than a cyber-attack.
BA could face huge compensation bill over stranded passengers
27.5.2017 (Herald Scotland)
Delayed travellers are able to claim compensation under EU law, unless the disruption has been caused by factors outside the airline’s control.
Air travel experts say BA is likely to face a massive cost in lost revenue and payouts to customers whose flights were cancelled.
“They have broken all the rules and they will have to deal with it – it’s going to be a very expensive situation for BA.”
Airlines also have to provide food and drink if their passengers are delayed by more than two hours under the regulations.
Civil Aviation Authority guidance states that anyone who is more than three hours delayed arriving at their destination could be entitled to compensation.
Meanwhile, the unprecedented disruption could last for several days, experts say. Air industry consultant John Strickland said: “There’s a massive knock-on effect.
“Customers and from the airline’s point of view – manpower, dealing with the backlog of aircraft out of position, parking spaces for the aircraft – it’s a challenge and a choreographic nightmare.”
He added that the problems with BA’s IT systems last year were not on the scale of this issue. “They were bedding in a new check-in system last year and there were teething problem but not of the magnitude of this,” Mr Strickland said.
The disruption has been compounded by the timing of the outage coinciding with a bank holiday weekend and school half-term holidays.
“Heathrow ordinarily would be busy but would be exacerbated by the bank holiday, half-term and Ascension Day, which is celebrated in a lot of Europe,” Mr Strickland added. “Even if they could quickly get the show back on the road, which is a big uncertainty, disruption could run into several days.”
Mr Ginsberg added: “This is a very, very serious situation, one that will not be solved overnight, even once they get the technology aspects of it done – it’s going to be three or four days. There’s only full aircraft at this time of year and there will be aircraft in the wrong positions.”
Doubt a power surge caused BA’s IT fiasco – bad system, bad planning etc more likely
A massive failure of British Airways’ IT system left 300,000 passengers stranded around the world. This will be remembered as a catastrophic event for BA. And there are many questions about what happened. BA said it was due to a “power surge” that was “so strong that it rendered the back-up system ineffective”. But some experts have subsequently publicly expressed their doubt about how true that is, and do not believe a power surge would be able to bring down a data centre, let alone a data centre and its back-up. One said that would mean either bad design of the system, or some other explanation. Normally a data centre would have surge protection, which is there to protect against exactly this problem. There should also be an uninterruptible power supply, and proper earthing systems. The companies supplying the area where BA holds its data say there was no power surge. Experts say much of the problem was the time taken to reboot the system. But the overly-complex IT system is largely outsourced to India – and many of the experts in UK who initially helped to cultivate and develop the network left when the jobs were moved. The extent of the BA problem may be due to poor crisis management planning, an under-trained and under-staffed IT support team and a poor understanding of the wider logistics. The reputational costs to BA could be huge and very significant.