Heathrow chaos costs BA 16 mln stg

By Pete Harrison

LONDON (Reuters) – British Airways said on Thursday the chaos surrounding the opening of its new terminal at London Heathrow had so far cost it around 16 million pounds.

The high-profile opening of Terminal 5 last month turned into an unmitigated public relations disaster, with hundreds of flights cancelled and tens of thousands of bags going missing.

“The impact was borne by the shorthaul schedule, where there were 300 cancelled flights, equating to 0.2 percentage points of capacity,” BA said in a statement.

“The financial impact of these events is estimated to be around 16 million pounds, reflecting all costs associated with the disruption and lost revenue opportunities,” it added.

The impact is close to what analysts had predicted so far, but analysts at Deutsche Bank this week forecast the problems would persist into the summer and cost around 150 million pounds in total.

On April 30, BA plans to move longhaul flights, accounting for the other half of its Heathrow passengers, to T5.

“Although there remains a small number of cancellations for today and tomorrow, the Terminal 5 performance is steadily improving,” said BA.

The airline said its passenger traffic fell 2.8 percent in March, with a 5 percent decrease in premium traffic and a 2.3 percent fall in non-premium traffic.

But the figures had been complicated by the early Easter this year and changes to school holidays.

“Underlying conditions in longhaul premium traffic continue to be strong, while shorthaul premium and longhaul non-premium continue to be weak,” BA added.

Passengers to the Asia Pacific region were down 6 percent and those to Africa and the Middle East were down 5.7 percent.

BA’s load factor — a measure of how well it filled its planes — decreased 0.9 percentage points versus last year, to 75.4 percent.