Heathrow Outage Costs British Airways £40m

British Airways lost £40m due to the March power outage that forced Heathrow Airport to shut down for one day yet received no compensation from the airport. The power outage occurred when a substation fire happened and Heathrow Airport needed seven hours to recover operations which resulted in restricted flight operations that frustrated airlines. The airline CEO Sean Doyle stated that British Airways must absorb lost revenue together with refund expenses and passenger care costs because there is no compensation available. The first quarter financial results of IAG showed a 9.6% revenue increase to €7bn and a €130m operating profit increase to €198m. The US-UK trade agreement eliminated Rolls-Royce jet engine tariffs while IAG announced two major aircraft deals worth $13bn for 32 Boeing planes and $8bn for 21 Airbus planes. IAG CEO Luis Gallego expressed support for the tariff relief but stated the plane orders were independent from each other even though the Trump administration linked them. The airline industry received a boost from the deals which support BA and Aer Lingus and Iberia and Vueling while Rolls-Royce stock prices increased by 4% after the tariff reduction. The infrastructure weaknesses revealed by the outage do not affect IAG’s positive financial situation and strategic investments that will drive growth as air travel demand recovers.