British Airways has revealed it suffered a £40 million loss after a power outage in March forced Heathrow Airport to close for a day.
The disruption, caused by a substation fire, brought operations to a standstill, with the airport only partially reopening seven hours after power was restored, allowing just a handful of flights to depart.
BA’s chief executive, Sean Doyle, said the airline is “assessing options” but currently has no access to compensation either from Heathrow or through its insurance providers. “Under regulation at the minute, we’ve no immediate recourse,” Doyle added.
Heathrow Faces Scrutiny Over Slow Recovery
The outage sparked frustration among airlines over Heathrow’s slow response, and a review led by Heathrow board member Ruth Kelly is expected to be published later this month.
The National Energy System Operator confirmed that full operations resumed several hours after the initial restoration of electricity, compounding losses for airlines and passengers alike.
IAG Reports Strong Financials Despite Setback
Despite the setback, BA’s parent company, International Airlines Group (IAG), posted a strong first-quarter performance, with revenues rising by 9.6% to €7bn (£5.9bn) and operating profit increasing to €198m.
IAG, which also owns Aer Lingus, Iberia, and Vueling, announced major aircraft purchases totalling nearly £18bn.
Major Orders with Boeing and Airbus
The group confirmed the acquisition of 32 Boeing planes in a $13bn (£9.8bn) deal, alongside an $8bn order for 21 Airbus aircraft. The announcements coincided with a new UK-US trade agreement that removed tariffs on aviation components such as Rolls-Royce engines.
While US officials had hinted at the Boeing order in trade talks, IAG’s CEO Luis Gallego maintained that the aircraft tenders were already underway.
“No tariffs will help us to develop the business,” he said, welcoming the exemption but downplaying its role in the final decisions.
Discounted Deals and Strategic Growth
IAG noted that it secured “substantial discounts” on the list prices of both Boeing and Airbus planes, with Boeing jets priced around $397m each and Airbus aircraft at $374m.
“This order marks another milestone in our transformation strategy,” Gallego stated.
Demand Remains Strong in Premium Travel
While IAG observed a dip in economy-class bookings from US travellers, it reported stable demand in business-class and premium cabins, helping to offset the decline.
Gallego emphasised: “Despite macroeconomic uncertainty, demand for premium air travel remains resilient.”
Analysts Optimistic on Sector Outlook
Aarin Chiekrie, an analyst at Hargreaves Lansdown, noted that “tariffs had been weighing on sentiment” but pointed to a strong booking rate for the second quarter, suggesting a more optimistic outlook for the travel sector.
