Profits take off at British Airways owner IAG despite IT meltdown

WILLIE WALSH, chief executive of British Airways owner IAG, said the investigation into an IT meltdown that grounded tens of thousands of passengers was nearly over yesterday, as the group revealed strong profits.

Roughly 75,000 passengers are thought to have been affected by the incident, which grounded planes at Heathrow and Gatwick airports over the busy May Bank Holiday weekend.

Mr Walsh said the external investigation was “largely complete”, adding he had “not learned anything new” beyond what the airline group had already suspected was the cause of the meltdown – namely an inadvertent cutting of power followed by an unauthorised and incorrect restoration.

The group booked a €65m (£58m) charge for compensating passengers. Nonetheless, operating profit before exceptional items rose 37pc to €975m in the six months to June 30, helped by lower fuel costs and a strong Easter. Pre-tax profits also rose more than 2pc to €706m on the back of revenues of €10.9bn, up less than 1pc on the comparable period.

Passenger numbers were relatively unaffected by the incident, with the group carrying 48.8m people in the period, 4.6pc more than the same six months last year. New British Airways routes to Santiago de Chile and Oakland, as well as increased demand for Shanghai, Tokyo and Johannesburg helped fill its planes.

Mr Walsh also said that Level, IAG’S new long-haul, low-cost brand, was proving a success. He said: “Sales continue to be well ahead of our expectations. We’ve ordered three additional aircraft and are considering other European bases for the operation.”

Shares in the group closed down 0.5p at 595.5p yesterday.