British Airways, with the insouciance the airline so frequently displays, is still to say precisely why its systems failed so catastrophically at the weekend. So let us offer a few pointers.
On 18 July last year, delays of up to four hours greeted BA passengers at Heathrow and Gatwick. What caused the chaos? “A short-lived problem with our check-in system,” said BA. Three months later, on 6 September, lengthy queues built up again with passengers given boarding passes and even luggage labels written out by hand. The second check-in failure in the space of 12 weeks was blamed on “operational reasons”, with pilots reportedly telling weary passengers it was a “computer glitch”.
So when Heathrow Terminal 5 descended into mayhem over the weekend, BA boss Alex Cruz could not have been unaware of the airline’s earlier IT problems. Yet he saw no reason to resign, instead offering “profuse” apologies. In a carefully scripted official BA video message amid multiple flight cancellations, Cruz blamed “power supply issues” as the “root cause” of the problem. In other interviews he talked of a problematic “power surge”. This immediately provoked widespread guffaws from IT experts, for whom uninterruptible power supplies, back-up centres and “mirror” sites are the bread-and-butter basics of any major IT project. The power companies added to the puzzle, pointing out that electricity supply in the Harmondsworth area where BA’s head office is sited had been running perfectly normally.
The lack of clarity over the IT failure will come as no surprise to many customers of Vueling, the Spanish airline that is a subsidiary of BA’s parent company, IAG, and where Cruz was in charge before shifting to BA. In early July last year, thousands of customers endured four days of chaos at Barcelona-El Prat as Vueling cancelled scores of flights. This episode was also characterised by a near information blackout by the airline, prompting the Catalan authorities to drag in the company’s president to obtain some sort of explanation. The House of Commons transport select committee should follow their lead.
The ambiguity around the weekend’s IT meltdown extends to compensation. In his video message, Cruz told travellers they would be offered full refunds. But he made no mention of EU 261, the rule that gives passengers monetary compensation of up to €600 for delays over three hours, or cancellations.
It remains unclear how much passengers will be compensated for consequential losses – such as taking it upon themselves to book an alternative flight, usually at great cost, to reach their destination. The rules are unclear here; an airline “may” have to pay up, but will treat it case by case.
The experience of many passengers who have written to the Guardian’s consumer champion’s column tell us claims are often protracted and frequently unsuccessful. Too often promises made by staff on the ground (“just book yourself on to another flight and we’ll pay”) are later rejected by management. Our consumer champs say that if airline counter staff make you a promise, video it on your phone – it may be your only chance of enforcing a claim.
Many expected BA’s main punishment to come from the stock market. But as the London market reopened after the bank holiday, IAG’s shares hit mild turbulence, rather than nose-diving. By the end of the day they were down just 8.5p to 605p and were not even among the worst 10 FTSE-100 performers of the day. The IT meltdown has barely dented the airline group’s stellar market performance over the past year. IAG’s shares are up 60% since last summer and they are trading at four times their 2012 level.
Most estimates put BA’s likely compensation bill at about £100m. That’s little more than 0.5% of revenues. The stock market is evidently betting that the skies will clear again for the airline. But given the scenes of chaos at the weekend – where one passenger described Heathrow as “the angriest place I’ve been”, the market’s optimism may be misplaced.
Meanwhile serendipity treated us to Ryanair’s results on the very day BA was mopping up its shattered schedules. Michael O’Leary yet again cut prices, cut costs and raised profits. In 2013 he changed Ryanair’s famously abrasive customer service culture. And he never outsourced the company’s IT.
BA needs customers to think flying the flag still offers something special. But the bank holiday weekend’s flights chaos suggests that currently IAG boss Willie Walsh could learn a lot from his deadly Irish rival.
