British Airways’ IT Failure Cost the Airline €17,246 a Minute

Well, what a weekend it has been for British Airways.

Thankfully I wasn’t travelling out of Heathrow, my local airport, due to the long weekend here in the UK. However I do know of many friends who’ve had their holidays ruined by the “IT failure” that led to the mass cancellation of flights on Saturday and Sunday by British Airways.

The airline has been going through heavy cost-cutting over recent years. I’m almost certain the events this weekend have wiped out any savings they’ve made. Their share price has dropped by £175mm alone. Though how much might this fiasco directly cost the airline?

Methodology

Airhelp, a company that helps travellers claim compensation for flight delays and cancellations, put together a dataset detailing British Airways flights and estimated passenger numbers for scheduled departures this weekend (27/05/2017 – 28/05/2017) from airports around the world.

In this dataset they split out delayed flights and those that were cancelled. If you booked a flight that departed from Europe or was with a European airline, you  have rights under EU law if your flight is delayed or cancelled. The amount that can be claimed is determined by length of delay, length of flight and wether the flight was cancelled completely.

Using this data it was possible to estimate British Airways’ potential liability for passenger compensation for Saturday (27/05/2017) and Sunday (28/05/2017).

All figure are quoted in Euro’s (EUR).

Results

Worst affected airports (by passengers delayed / cancelled)

Tot affected pax rank Airport Tot delayed pax Tot cancelled pax Tot affected pax
1 LHR 2829 46303 49132
2 LGW 444 4392 4836
3 AMS 284 1153 1437
4 EDI 222 1210 1432
5 JFK 0 1404 1404
6 GLA 243 1072 1315
7 NCE 57 1210 1267
8 GVA 358 847 1205
9 FCO 162 1020 1182
10 DUB 201 910 1111

Full list.

Passengers at LHR (Heathrow), British Airways’ UK hub, saw the worst of the problems. In total 49,132 passengers suffered, 46,303 of them has their flights cancelled.

LGW (Gatwick) was the second worst affected airport for cancelled and delayed flights. 4,836 passengers were affected in total, a much lower number than at Heathrow.

Worst affected airports (by estimated compensation liability)

tot compensation rank Airport 2705 tot compensation (eur) 2805 tot compensation (eur) tot compensation (eur) tot pax
1 LHR 16,819,509 4,414,834 21,234,343 49132
2 LGW 2,067,489 32,324 2,099,813 4836
3 JFK 891,252 891,252 1404
4 DXB 515,516 515,516 668
5 HKG 477,353 477,353 619
6 SFO 435,586 435,586 686
7 EDI 160,470 265,370 425,840 1432
8 AMS 171,197 253,900 425,097 1437
9 GLA 149,743 240,866 390,609 1315
10 GVA 180,207 168,398 348,605 1205

Full list.

Unsurprisingly Heathrow tops the list with a potential liability of €21,234,342.77. This equates to €7373 per minute in compensation (21mm / 2880 min)! Ouch.

Remember, one variable that affects the amount of compensation you can claim is the distance of a flight. As BA tend to fly in/out of the UK, passengers flying from/to airports further away from the UK can typically claim more. This is why flights departing from airports like Hong Kong have high total compensation liabilities (€477,352.64) in comparison to passenger numbers (619).

Overall, the average compensation liability per airport was €245,448.

Worst affected countries (by estimated compensation liability)

Liability rank Country eligible flights eligible seats eligible pax liability (EUR)
1 GB 754 135500 109890 43,490,141
2 US 66 19767 16031 9,618,622
3 FR 78 11322 9182 2,414,753
4 ES 62 9845 7984 2,208,475
5 IT 66 9980 8094 2,187,186
6 DE 59 7876 6387 1,596,859
7 CA 10 2994 2428 1,457,019
8 IN 11 2808 2277 1,366,148
9 GR 24 3840 3114 1,245,696
10 AE 8 2182 1770 1,061,956

Full list.

As British Airways operates out of the UK, it is unsurprising to see compensation liabilities and passengers affected to be highest from British airports. Passengers flying British Airways from the US were the second worst affected (16k passengers / € 9.6mm compensation liability). There were significantly more affected BA passengers from the US than other countries (excluding the UK).

Average claim amounts

Average claim amount by airport histogram

Download chart.

There is a fairly even spread of maximum compensation passengers are eligible to claim.

Typically airports a long distance from the UK – for example DXV, PVG, HKG – have the highest average amount passengers can claim in compensation (€771.43) as discussed above.

European airports typically have the lowest amount passengers can claim in compensation (€264.53) due to their distance from the UK (or total flight time).

Total liability

tot affected flights tot seats tot pax tot compensation (eur)
Sat 27/5 515 95607 77537 € 34,193,780.20
Sun 28/5 243 43273 35094 € 15,476,631.72
Total 758 138880 112631 € 49,670,411.92

Full table.

In total it is estimated British Airways “IT failure” affected 758 worldwide flights with 112,631 passengers due to fly on them.

Based on EU compensation rules, BA is potentially liable to pay €49,670,411.92 in passenger compensation for the two days of delays and cancellations this weekend. Or €17,246 a minute (49.5mm / 2880 min)!

tl;dr

BA is potentially liable to pay €49,670,411.92 in passenger compensation for the two days of delays and cancellations this weekend.

Footnotes

  1. Data sources + data used in this post.

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