Bri­tish Air­ways looks to get back on track af­ter IT fail­ure

Flights nor­malised says air­line amid dam­age to brand

The National - News - Business - - Front Page - Sananda Sa­hoo ssa­hoo@then­ With Bloomberg

Bri­tish Air­ways flights con­nect­ing the UAE with Lon­don Heathrow have nor­malised af­ter an IT fail­ure dis­rupted hun­dreds of flights, ac­cord­ing to the air­line yes­ter­day.

The early sched­uled flight to Dubai In­ter­na­tional ar­rived on time yes­ter­day, with the night flight ex­pected also to be on time. The two Heathrow-bound flights left Dubai af­ter 20-minute de­lays yes­ter­day morn­ing.

At Abu Dhabi In­ter­na­tional Air­port, all BA flights are op­er­at­ing as per the nor­mal sched­ule, as of Sun­day. One flight from Abu Dhabi to Lon­don Heathrow was can­celled on Satur­day. There is one BA flight a day to and from the cap­i­tal’s air­port. “At Heathrow, we op­er­ated vir­tu­ally all our sched­uled long-haul flights, though the knock-on ef­fects of Satur­day’s dis­rup­tion re­sulted in a re­duced short-haul pro­gramme,” a BA spokes­woman told The Na­tional yes­ter­day.

“As our IT sys­tems move closer to full op­er­a­tional ca­pac­ity, we will again run a full sched­ule at Gatwick on Mon­day and in­tend to op­er­ate a full long-haul sched­ule and a high pro­por­tion of our short-haul pro­gramme at Heathrow.”

The UK car­rier has scrapped al­most 600 flights since Satur­day be­cause of a com­puter fail­ure and is still pro­cess­ing thou­sands of pas­sen­gers who missed flights or lost their lug­gage.

The air­line is also work­ing on re­u­nit­ing pas­sen­gers with lost bag­gage.

The ma­jor IT sys­tems fail­ure se­verely af­fected BA oper­a­tions world­wide on Satur­day, strand­ing pas­sen­gers and re­sult­ing in de­layed bag­gage.

The IT sys­tems of air­lines come into play at ev­ery step, in­clud­ing ticket book­ing, checkin and board­ing, while tech­nol­ogy is up­dated pe­ri­od­i­cally to stream­line oper­a­tions and cut costs.

“New tech­nol­ogy will be utilised to in­crease ef­fi­ciency and sim­plify the oper­a­tions,” said the BA an­nual re­port re­leased in De­cem­ber. The step is part of the strat­egy to re­duce costs over the next five years, it said.

Last year, BA re­ported an op­er­at­ing profit be­fore ex­cep­tional items of £1.47 bil­lion (Dh6.94bn), up by 16.5 per cent over the pre­vi­ous year at £1.26bn.

Cost-cut­ting last year re­lated to the IT sys­tem has come un­der fresh scru­tiny af­ter the fail­ure over the week­end.

“Com­ing af­ter a spate of other is­sues, the bad PR and po­ten­tial rep­u­ta­tional af­ter­math will likely hit fu­ture rev­enue be­yond the likely ma­te­rial im­pact,” wrote Damian Brewer, an an­a­lyst with RBC Cap­i­tal Mar­kets. “It is tempt­ing but in­creas­ingly ques­tion­able to view this as a one-off.”

BA’s chief ex­ec­u­tive, Alex Cruz, said he was “pro­fusely sorry” for the dis­rup­tion but it has done lit­tle to quell the strong re­ac­tion as images of thou­sands of stranded pas­sen­gers coursed through so­cial me­dia.

The dis­rup­tion co­in­cided with the start of the an­nual end-of-May Bank Hol­i­day week­end in the UK, as well as the three-day Memo­rial Day week­end re­garded as the unofficial start of sum­mer in the US. It is the lat­est mess to hit the em­bat­tled global avi­a­tion in­dus­try. This year alone, air­lines have been caught by United Air­lines’ drag­ging fi­asco, mass can­cel­la­tions at Delta Air Lines, the US’s lap­top ban and at­tempted re­stric­tions on travel from ma­jor­ity-Mus­lim coun­tries.

It’s also not the first prob­lem in­volv­ing Bri­tish Air­ways. In Septem­ber, a com­puter net­work fail­ure brought down Bri­tish Air­ways’ check-in sys­tem, caus­ing world­wide ser­vice de­lays, while ear­lier this month, Lon­don Gatwick air­port re­ported prob­lems with its bag­gage-sort­ing sys­tem.

This week­end’s out­age could cost BA £82 mil­lion, ac­cord­ing to Good­body Stock­bro­kers, which es­ti­mates that about 1,200 flights were af­fected and that 171,000 pas­sen­gers qual­ify for dam­ages. That would re­duce op­er­at­ing profit at IAG, BA’s par­ent, in 2017 by about 2.7 per cent, Good­body es­ti­mates.

“Bri­tish Air­ways’ IT fail­ure over the week­end is clearly a PR night­mare,” Mark Simp­son, an an­a­lyst at Good­body, said in a note. It will re­quire “a real fo­cus in terms of han­dling cus­tomer’s com­plaints and com­pen­sa­tions claims in or­der to re­build trust and con­fi­dence with the pub­lic.”

Span­ish-listed shares of IAG, which also owns car­ri­ers Ibe­ria and Aer Lin­gus, dropped by 2.5 per cent yes­ter­day.

Com­ing af­ter a spate of other is­sues, the bad PR and po­ten­tial rep­u­ta­tional af­ter­math will hit fu­ture rev­enue be­yond the likely ma­te­rial im­pact Damian Brewer an­a­lyst with RBC Cap­i­tal Mar­kets

Andy Rain / EPA

At Heathrow yes­ter­day, BA op­er­ated nearly all of its long-haul flights but had a re­duced short-haul pro­gramme.

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