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BA-owner profits capped by computer crash, cartel fine

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by July 28, 2017 General

IAG, the parent group of British Airways, announced Friday a slight rise in net profits in the first half, with performance impacted by BA suffering a massive computer crash.

Profit after tax increased 2.4 percent to 557 million euros ($651 million) in the first six months of 2017 compared with a year earlier, with performance hit also by a sizeable EU fine against global airlines for their role in an air cargo cartel.

IAG, which operates also Spanish carrier Iberia, booked a charge of 65 million euros for three days of flight disruption at British Airways owing to a computer power failure, the parent group said in an earnings statement.

The airline cancelled 726 flights worldwide between May 27 and 29. Some 75,000 passengers were affected.

For the latest reporting period, BA also took a charge of 104 million euros related to the EU fine.

The European Commission in March re-instated a near 800-million-euros fine against leading airlines, including also Air France-KLM and Cathay Pacific.

A top EU court threw out the penalty in 2015 but the Commission said its ruling would ensure anti-competitive behaviour in a key industry did not go unpunished.

In 2010, the Commission, the European Union’s executive arm, fined 11 top airlines 790 million euros for running a price-fixing cartel between 1999 and 2006.

The other companies were Air Canada, Air France-KLM, Cargolux, Japan Airlines, LAN Chile, Martinair, Qantas, SAS and Singapore Airlines.

Another cartel member, Lufthansa, and its subsidiary, Swiss International Air Lines, received full immunity from fines after they cooperated with the investigation.

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