For BA, a £100m compensation bill could be just the start

Abysmal handling of the IT failure that saw tens of thousands stranded and delayed means the airline will struggle to put the shine back on its brand

People at the British Airways check-in desks at Heathrow at the height of the outage.
People at the British Airways check-in desks at Heathrow at the height of the outage. Photograph: Neil Hall/Reuters
People at the British Airways check-in desks at Heathrow at the height of the outage.
People at the British Airways check-in desks at Heathrow at the height of the outage. Photograph: Neil Hall/Reuters

For BA, a £100m compensation bill could be just the start

Abysmal handling of the IT failure that saw tens of thousands stranded and delayed means the airline will struggle to put the shine back on its brand

Paul Sutherland is not a man you’d want to mess about. The martial arts instructor, 44, had woken early on the last Saturday in May and checked in on his phone for his British Airways flight to Stockholm, where he was due to officiate at a night of Ultimate Fighting Championship (UFC) bouts. By 7.30am, he had packed his suitcase, complete with laptop and paperwork, into the boot of his car and left his home in Gloucester, picking up two colleagues en route for the 98-mile drive to Heathrow.

But just as Sutherland was coming off the M4 at 9.30am, something was going haywire in BA’s nerve centre: a power outage that would mean Sutherland, and 75,000 other passengers, would get no further than the departure lounge.

The mayhem started in Boadicea House: simply known as “the computer building” when it was built for BOAC in 1967 and now managed by CBRE, a global firm that prides itself on “understanding how data centre mechanical and electrical services, IT platform requirements and property interact”. Its power was guaranteed by an uninterruptible supply – only this one was, somehow, interrupted. For a brief but critical moment, the electricity to the servers was cut: and when it was restored, the inter-related systems guiding BA’s global network were thrown into meltdown.

At Heathrow Terminal 5, staff were geared up for one of the busiest days of the year: the start of bank holiday weekend and summer half-term, with many families among the ranks of travellers. Suddenly, the self-check-in terminals went blank; phone apps were down; BA’s own email was lost. Internal networks that allocate planes to gates and tell crew where to report failed. Around the world, passengers trying to check in for London flights were finding the computer saying no.

In the sky above London, BA pilots were left circling. Denis Fischbacher-Smith, 60, a Glasgow University academic, was on a flight from Copenhagen that would soon be on its final approach to Heathrow. Instead, the captain announced over the intercom that its landing was delayed by congestion due to a storm; and later that lightning had knocked out communications with ground staff. On landing, the captain told passengers he could not find out which gate the plane should taxi to, and finally admitted he had no clue when buses would arrive for the passengers.

Inside the terminal, queues for those still expecting to depart were building rapidly. Many who had checked in remotely before the system died still wanted to drop bags. At 11.30am, after a two-hour wait, Sutherland was given a tag for his suitcase, but told the luggage belt wasn’t working and he should take it to a porter in zone C. “There were thousands of bags there. It was unreal.”

That was the last time Sutherland saw his bag. He then joined thousands more unwary BA customers in going through security to departure-lounge hell.

BA’s Spanish chief executive, Alex Cruz, had by now arrived at the recently refurbished crisis command centre at BA’s Waterside House HQ. Like most major airlines, BA has well-practised procedures for crisis management, with drills held up to four times a year.

British Airways planes at Heathrow during the weekend of the shutdown.
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British Airways planes at Heathrow during the weekend of the shutdown. Photograph: Andy Rain/EPA

Over eight-hour shifts, teams of senior managers would take their places at two horseshoe-shaped tables, holding conference calls with Heathrow’s own crisis centre while facing a video wall showing BA’s fleet and worldwide movements, news broadcasts, surges in Twitter activity – and planes going nowhere. But at the terminal, the lack of communications was heightening the crisis, leaving helpless staff faced with irate passengers and no information.

Departure boards showed flights whose times had come and gone. BA’s first tool for communicating with its increasingly bewildered customers, in and out of the airport, was Twitter, via its Newcastle-based social media team. But they couldn’t keep up with customers tweeting their own devastating verdicts – holidays in tatters, elderly relatives stranded, even a Greek wedding now missing its bridesmaids and guests.

Passengers at the airport were increasingly relying on word of mouth and online news, rather than airline staff. By 2.30pm, the media was reporting that no BA planes would fly from Heathrow or Gatwick before 6pm, a story rejected as “false news” in a rare announcement in the departure lounge. But within 20 minutes, a second announcement confirmed that all BA flights were indeed cancelled, at least until 6pm.

Contingency plans were laid but, in the chaos, even escaping proved impossible, says Sutherland: “The UFC tried to book me on another flight at 5.30pm, but I couldn’t even get to Terminal 2, because of the queues to get out.” Huge lines formed at doors that were never opened; queues for claim forms stretched around the terminal, with many in the dark about their rights as the airline pledged to rebook them.

Fischbacher-Smith, whose academic field is corporate risk and resilience, was getting a first-hand case study. “I think people would have been more understanding had there been communication on the ground. Failure is one thing. The response is something else.”

At 6.30pm, Cruz’s first Twitter broadcast identified a “power supply issue”, thanked customers for their patience – and confirmed that all the rest of the day’s flights were cancelled. The explanation only puzzled many further. Fischbacher-Smith says: “If there’s such a significant vulnerability in the system, you’d normally expect it to be tested and designed out of it. It’s not uncommon for latent errors to be embedded in system design – but you’d expect early warnings and near misses to be acted upon.”

And there had been warnings. Last July, a “short-lived problem with our check-in system”, in BA’s words, left passengers at its London airports delayed by up to four hours. In September, a second check-in failure in 12 weeks saw passengers given handwritten boarding passes amid lengthy queues – another reported “computer glitch”.

Damian Brewer, analyst at RBC, wrote of this month’s meltdown: “It is tempting but increasingly questionable to view this as a one-off. Across IAG, material operational failures seem to have become a recurring topic. This summer it is BA’s IT meltdown, last year Vueling.”

Cruz was chief executive at Vueling, BA’s sister airline in IAG, but moved to BA just before the Spanish low-cost airline cancelled scores of flights in a May 2016 weekend, leaving thousands grounded at its Barcelona base and prompting a government inquiry.

Incidents at other carriers such as Delta had vividly demonstrated the risks of an IT outage, so the explanation of a power issue seemed, Brewer added, to suggest “fundamental management and planning weakness in BA”.

The problems came amid a growing narrative of costcutting at BA and parent company IAG that had left some observers wondering about the diminishing brand. Although the airline has dismissed any connection between the weekend’s chaos and the outsourcing of jobs to India, the GMB union said it was “counterintuitive” to see no link with BA’s having made hundreds of experienced IT staff redundant.

A series of strikes by cabin crew in BA’s “mixed fleet” branch – set up during the bitter industrial dispute of 2011 and consisting entirely of new entrants – testified to simmering discontent among some staff. Another walkout has now been called for late June.

A departure board in Haethrow Terminal 5.
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A departure board in Haethrow Terminal 5. Photograph: Daniel Leal-Olivas/AFP/Getty Images

Longstanding customers will have noted recent developments such as the axing of free food on short-haul flights, higher fares for flying with hold baggage, and the reconfiguration of some planes to shrink passengers’ space.

While Willie Walsh, chief executive of IAG, briskly rebuffs any notion of staff or customer discontent, pointing to growing passenger and job applicant numbers, even City analysts who applauded his efficiencies have started to wonder if the costcutting has gone too far. Among European airlines, BA has some of the lowest satisfaction scores for customers and staff, according to surveys by Glassdoor and Skytrax.

Walsh’s tough efficiencies have led to booming profits for IAG, with Iberia, the first partner in the 2011 merger, forced to slash its fleet and wage bill. The shares, 146p five years ago, are near an all-time high, closing at 607p on Friday, despite the previous weekend’s debacle.

Vueling and now Aer Lingus, where Walsh earned his reputation, make up the rest of the IAG fold in an industry where rivals such as Ryanair dominate the short-haul market. This week, IAG launched a long-haul, low-cost carrier, Level, out of Barcelona, following Norwegian’s threat to its transatlantic market. The lines have become increasingly blurred, but while BA has cut costs to compete on fares, so far it still retains a significant brand loyalty.

Whether that can survive many more events such as last weekend’s fiasco is critical. Its Avios points scheme keeps many frequent flyers in BA’s network, to the point where even some stranded travellers last week spoke only of “questioning their loyalty” rather than vowing to switch. But aviation consultant Chris Tarry says: “It’s a very competitive environment. When you lose those customers it costs a lot to win them back.”

Should the tens of thousands stranded that Saturday – and potentially the same number again delayed as the knock-on effects stretched into Monday – decide to switch, BA’s loss could far outstrip the estimated £100m compensation bill.

The worst of the debacle came to an end on the Saturday night, when the last of the passengers stuck airside filtered back through immigration, after the indignity of a two-hour queue at the border – having never left the airport.

Heathrow staff, who had suffered Walsh’s public ire during the last comparable public relations catastrophe, when the baggage system failed at the opening of Terminal 5, quietly handed out mats and blankets to passengers who opted to sleep in its halls. The rest of Heathrow was fully functioning, but, as an airport insider put it: “For BA, it was like someone had literally had flicked the switch.”

It may yet prove that they had done just that. Sutherland, meanwhile, emerged just before 10pm, returning to Gloucester without his case or laptop, never to make it to the Swedish fight night, with thousands lost in earnings.

Five days later, although he was still waiting for a response to his many calls and messages to BA, he had a text saying his suitcase had arrived – in Stockholm.