6 Jun 2017

British Airways Faces £150m Compensation Bill After IT Failure

British Airways Plane in Flight

Following BA’s catastrophic systems failure last week, they are faced with a huge bill for flight delay compensation under EU Rules (see HERE for details). The systems failure also hugely disrupted baggage carriage, so many passengers are still without their luggage and must claim to the airline within 21 days in order to receive separate compensation for lost luggage.

The IT failure was blamed on a power outage in BA’s data centre, and because all their IT systems were down, planes could not fly, people could not rebook and baggage was lost track of, leading to chaotic scenes at Heathrow and Gatwick airports. BA have been roundly criticised for not having effective backup systems in place, either for the IT system itself or for the event of those systems failing. IT experts have said that it is unheard of not to have several lines of backup with such a system, so BA have effectively been negligent and will therefore be liable for compensation payments to affected customers.

BA further added to the confusion by giving incorrect advice to thousands of travellers, wrongly telling them to contact their travel insurers in the first instance. However, many passengers are due compensation without claiming from their insurance, while insurance companies would take an excess fee out of any payment, and generally only pay for expenses ‘above and beyond’ what is already due in direct compensation.

Under EU regulations, BA are also liable for ‘reasonable expenses’ incurred by affected travellers, such as hotel accommodation (£200 a day for two sharing); transport between the hotel and the airport (£50 round trip); and meals and refreshments (£25 a day for adults, £12.50 for children). Claims for these expenses should be made directly to the airline.

BA have made it clear that they will honour compensation claims and refund tickets where appropriate, but it appears likely that there will be a delay in processing the large number of compensation claims they will receive.

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