Yahoo Finance British Airways probe into IT power failure nears end as owner IAG enjoys soaring profits
Willie Walsh, the boss of British Airways owner IAG, has said the investigation into the power failure behind an IT meltdown that grounded tens of thousands of passengers is nearly over, as the group reported a surge in profits.
Roughly 75,000 passengers are thought to have been affected by the incident in May, which grounded planes at both 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 those passengers it had already compensated and others whose cases were still being dealt with.
None the less 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.
Profits also rose more than 2pc at the pre-tax level to €706m on the back of revenues of €10.9bn, up less than 1pc on the comparable period.
Passenger numbers seemed 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.
British Airways also booked a €77m charge linked to a restructuring, which Mr Walsh said was the amount of severance pay it had already given and expected to give to staff who would be leaving the company.
Elsewhere, Mr Walsh said Air France-KLM's deal earlier this week to take a 31pc stake in Virgin Atlantic alongside existing partner Delta Airlines was "positive for the industry" as it demonstrated further consolidation.
He also welcomed Heathrow airport's "major change of approach" with regards to its planned expansion. Earlier this week, the airport said it looked likely to be able to deliver its third runway at a lower cost due to a redrawing of its plans.
"I've not had the time to fully analyse the figures but I think they have reduced the projected capital expenditure by £6bn and now believe they can achieve the objective, which is a requirement that expansion can go ahead without increasing passenger charges," Mr Walsh said.
"I'm very clear that if Heathrow wants to expand, it must not be done at the expense of passengers and for the benefit of their shareholders."
In March, the group, which also owns the Aer Lingus and Iberia airlines, launched Level, a new long-haul, low-cost airline brand and Mr Walsh said the carrier was proving a success.
"In June, Level started long-haul flights from Barcelona to four destinations. Sales continue to be well ahead of our expectations. We've ordered three additional aircraft and are considering other European bases for the operation."
