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British Airways’ Costly IT Collapse makes it Rethink the Strategy

The company was left counting the cost of the disruption, both in terms of a one-off impact to its profit and the longer term damage to its reputation

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People wait with their luggage at a rebooking zone at Heathrow Terminal 5 in London, Britain May 29, 2017. REUTERS/Stefan Wermuth

– by Alistair Smout

LONDON, May 29, 2017: British Airways (BA) said it would take steps to ensure there was no repeat of a computer system failure that stranded 75,000 passengers over a holiday weekend and turned into a public relations disaster.

BA had been forced to cancel all its flights from Heathrow, Europe’s busiest airport, and Gatwick on Saturday after a power supply problem disrupted its operations worldwide and also hit its call centers and website.

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The airline was returning to normal on Monday, planning to run more than 95 percent of flights from London Heathrow and Gatwick, with only a handful of short-haul flights canceled.

BA Chief Executive Alex Cruz said the root of the problem, which also affected passengers trying to fly into Britain, had been a power surge on Saturday morning which hit BA’s flight, baggage and communication systems. It was so strong it also rendered the back-up systems ineffective, he said.

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“Once the disruption is over, we will carry out an exhaustive investigation into what caused this incident, and take measures to ensure it never happens again,” Cruz said.

Over the weekend, some stranded passengers curled up under blankets on the floor or slumped on luggage trolleys, images that played prominently online and in newspapers.

“Apologizes all well and good but not enough. BA has lost another loyal customer #disgraceful,” tweeted Tom Callway, who had been due to fly to Budapest.

The company was left counting the cost of the disruption, both in terms of a one-off impact to its profit and the longer term damage to its reputation.

Check-in information boards are displayed at Heathrow Terminal 5 in London, Britain May 29, 2017. REUTERS/Stefan Wermuth

Spanish-listed shares of parent company IAG <ICAG.L>, which also owns carriers Iberia, Aer Lingus and Vueling, dropped 2.8 percent on Monday after the outage. The London-listed shares did not trade because of a public holiday.

Flight compensation website Flightright.com said that with around 800 flights canceled at Gatwick and Heathrow on Saturday and Sunday, BA was looking at having to pay around 61 million euros ($68 million) in compensation under EU rules. That does not include the cost of reimbursing customers for hotel stays.

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BA would fully honor its compensation obligations, Cruz said. Of the 75,000 passengers who missed out on flights, around two-thirds would have been flown to their destinations by the end of Monday, he added.

COST CUTTING

BA has been cutting costs to respond to competition on short-haul routes from Ryanair <RYA.I> and easyJet <EZJ.L> and recently faced criticism for starting to charge passengers for their in-flight snacks.

Ireland’s Ryanair was quick to seize on the marketing opportunity, tweeting “Should have flown Ryanair” with a picture of the ‘Computer says no’ sketch from the TV series “Little Britain” to poke fun at BA.

Ryanair said it had seen a spike in bookings over the weekend but gave no further details.

The GMB union said that BA’s IT systems had shortcomings after they made a number of staff redundant and shifted their work to India in 2016.

“This could have all been avoided. BA in 2016 made hundreds of dedicated and loyal IT staff redundant and outsourced the work to India,” Mick Rix, GMB National Officer for Aviation, said.

Cruz rejected the union criticism.

“They’ve all been local issues around a local data center, which has been managed and fixed by local resources,” he told Sky News.

Several passengers complained about a lack of information from BA staff at the airport. Others said their luggage had been lost.

The airline said it was working to get reunite passengers with their luggage after many items were left at Heathrow over the weekend, although staff on Twitter warned this “could take some time”.

While other airlines have been hit by computer problems, the scale and length of BA’s troubles were unusual.

Delta Air Lines Inc <DAL.N> canceled thousands of flights and delayed many others last August after an outage hit its computer systems.

Last month, Germany’s Lufthansa <LHAG.DE> and Air France <AIRF.PA> suffered a global system outage which briefly prevented them from boarding passengers. (Reuters)

(Reporting by Alistair Smout; Additional reporting by Victoria Bryan in Berlin, Costas Pitas in London and Ismail Shakil in Bengaluru; Editing by Keith Weir)

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Apple Users Spent $1.22 bn on App Store in One Holiday Week

Apple will report the next quarter results on January 29

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Apple, Iphone XR, Apple Watch
Try these fitness apps on Apple Watch Series 4 for marathon season. Flickr Commons

Customers globally spent $1.22 billion on Apple App Store in the 2018 holiday season, making a single-day record with purchases worth $322 million on New Year’s Day alone.

App Store spending topped $1.22 billion between Christmas eve and New Year’s eve, Apple said in a statement late on Thursday.

“The holiday week was our biggest week ever with more than $1.22 billion spent on apps and games, and New Year’s Day set a new single-day record at more than $322 million,” said Phil Schiller, Apple’s Senior Vice President of Worldwide Marketing.

 “Thanks to the inspiring work of our talented developers and the support of our incredible customers around the world, the App Store finished off an outstanding 2018 and kicked off 2019 with a bang,” he added.

Earlier this week, Apple announced that the App Store helped drive Services revenue to an all-time record in the holiday quarter.

Apple services set new all-time records in multiple categories, including the App Store, Apple Music, Cloud Services, Apple Pay, and the App Store’s search ad business.

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An Apple store in Woodbridge, Virginia. (VOA)

“Gaming and self-care were the most popular categories of app downloads and subscriptions during the holidays,” said the company.

Globally, multiplayer games including Fortnite and PUBG were among the top downloaded games over the holidays, along with Brawl Stars, Asphalt 9 and Monster Strike.

In a letter to investors on January 2, Apple CEO Tim Cook said that the company now expects revenue of approximately $84 billion, down from the $89 to $93 billion it had previously projected.

Also Read- Microsoft Working on a Project To Give Users More Data Control

The revenue outside of the iPhone business grew by almost 19 per cent year-over-year, including all-time record revenue from Services, Wearables and Mac.

“Services generated over $10.8 billion in revenue during the quarter, growing to a new quarterly record in every geographic segment,” said Cook.

Apple will report the next quarter results on January 29. (IANS)