British Airways owner IAG expects to take a financial hit in the “tens of millions” of euros from the complete shutdown of Heathrow airport for the best part of a day on 21 March.
Speaking at the A4E Aviation Summit in Brussels on 27 March, IAG chief executive Luis Gallego acknolwedged that Heathrow did an “extraordinary job” to get the airport fully operational again on 22 March but expressed his surprise that it “doesn’t have procedures” for overcoming a situation where a fire at a single substation affects power supply to the facility.
The closure forced IAG’s biggest carrier BA to cancel hundreds of flights, with the group still calculating the exact financial impact of the incident a week later.
“We haven’t given a precise number, we are still revising everything, but it will be tens of millions for sure.” Gallego states.
Speaking at the same event, IAG’s European peers acknowledged that they had benefited from passengers having to find alternative flights at short notice amid the Heathrow cancellations, but that they also took important lessons from the incident.
Ryanair group chief executive Michael O’Leary said that the Irish low-cost carrier had written to all of its main airports in light of the shutdown, to seek reassurances that they could continue to operate in similar circumstances.
“They all assured us they have back-up generators, but I wouldn’t believe a word of it,” he states. “There but for the grace of God go any of us.”
O’Leary complains that while he believes airports should be liable for the financial costs of such events, airlines might ultimately end up paying anyway, because those costs would just be passed back to airlines in higher fees.
Air France-KLM chief executive Ben Smith meanwhile describes the Heathrow incident as a “wake-up call” for airports.
“It was very surprising to us that something like that could happen at the busiest airport in Europe with no back-up plan,” he states.
Following the incident, Heathrow airport chief executive Thomas Woldbye told the Financial Times that it would cost around £1 billion ($1.3 billion) to install a “fully resilient” power system at the hub, and stated that airlines would have to take on a share of that financial burden.
IAG recently announced that its full-year net profit ticked up slightly to €2.7 billion ($2.8 billion), while its operating profit was 27% higher at €4.4 billion. It achieved those figures on revenue some 9% higher at €32.1 billion. It is due to report its first-quarter 2025 results on 9 May.
