British Air meltdown feeds public outrage
British Airways’ epic meltdown over a busy holiday weekend fur ther fanned public outrage of an industry infamous for its focus on cost cuts over customer service, leaving the U.K. carrier scrambling to explain how a local computer outage could lead to thousands of stranded passengers.
Amid United Airlines’ dragging fiasco, mass cancellations at Delta Air Lines and U.S. concerns about terrorists using laptops to down planes, the global aviation i n d u s t r y h a rd l y n e e d e d another blow. But then on Saturday morning, a brief power surge knocked out British Airways’ communications systems grounding the carrier’s entire London operations, leading to days of chaos and putting the new chief executive officer in the hot seat.
With nearly 600 flights canceled and luggage unable t o b e d i s p e r s e d , i mages and horror stories quickly c o u r s e d t h r o u g h s o c i a l media. Damages for rebooking and compensating customers is estimated at about 100 million euros ($112 million), or about 3 percent of the annual operating profit of parent IAG SA.
The image damage could be even greater as British Airways appears to have no idea how it all happened. “We’re absolutely committed to finding out the root causes of this particular event,” a grim looking Alex Cruz, the airlines’ CEO, said in an interview with Sky Television. He did, however, rule out a cyber attack, which suggests the faults are homegrown.
“It is tempting but increasingly questionable to view t h i s a s a o n e - o f f , ” s a i d Damian Brewer, an analyst with RBC Capital Markets. “Coming after a spate of other issues, the bad PR and potential reputational aftermath will likely hit future revenues beyond the likely material impact.”
The U.K. carrier is still processing thousands of passengers who missed flights or lost their luggage. The airline said about 75,000 people were affected, while analysts said the number was likely closer to 170,000. About 95 percent of flights are running, Cruz said in a YouTube message posted on Monday.
The crisis puts the spotl i g ht o n Cr uz , who t o o k charge a year ago after running IAG’s Spanish budget unit Vueling for more than nine years.
While Cruz helped Vueling expand into Spain’s second-biggest airline, the airline suffered repeated flight cancellations and delays last summer due to a lack of available aircraft and crews. Vueling was the only airline in IAG’s portfolio where profit declined last year.
His four-year cost-cutting program at BA includes eliminating almost 700 back-office jobs, outsourcing some technology operations and switching to paid-for food on short-haul flights. The excessive focus on costs is to blame for the latest mess, according to the GMB union.
“They started on this journey to outsource and offshore this work, and there have been a number of incidents now that have culminated in what has taken place this weekend,” Mick Rix, national officer for civil aviation at GMB, said in a phone interview on Monday.
For passengers, workers and tabloids that have criticized the industry’s ruthless cost reductions for years, the disruptions seemed to prove that airlines have gone too far. Daily Mail blamed Cruz and chastised his methods at Vueling, where he outlawed color printing, banned paper towels from washrooms and offered visitors to business meetings only tap water.
Critics on social media, me a nwh i l e , q u e s t i o n e d whether Br iti sh Air ways deserved to claim itself as the U.K.’s flag carrier after the perpetual cutbacks.