British Airways owner falls to bottom of FTSE 100

IAG shares have taken a hit following BA's massive weekend disruptions

British Airways owner falls to bottom of FTSE 100

iargroup.com

Shares in British Airways' parent company suffered a dramatic decline on Tuesday, after an IT glitch caused chaos for passengers and the airline's public image alike.

International Airlines Group (IAG) stock was down over 4% in early trading, leaving the group languishing at the bottom of the FTSE 100.

It wiped approximately £500m off the market value of IAG, which is headed up by Dubliner Willie Walsh (pictured) and also owns Aer Lingus.

It is currently down 2.61% at 598 on the London index.

After a record close on Friday, the overall FTSE 100 was down to 7,508 at lunchtime following bank holidays in the UK and US.

BA was forced to ground flights in Heathrow and Gatwick over the weekend when a major outage caused its IT system to collapse. Roughly 75,000 travellers were discommoded as a result.

A check-in systems 'glitch' had also caused thousands of BA passengers to be delayed last in September.



On Saturday, general British trade union GMB called the failure "another example of the shortcomings of BA IT systems since they made a number of staff redundant, and outsourced their work to India in 2016."

Chief executive Alex Cruz apologised "profusely" on Monday, but denied that the problem had anything to do with cost-cutting or the outsourcing of jobs.

As previously reported, BA could face a compensation bill of up to £100m.

Speaking to The Pat Kenny Show yesterday, Sky News reporter Enda Brady said that it had been a disastrous weekend for the airline and its passengers:

"It's a bank holiday here, it's half term so the kids are off school. A lot of families go away to France, to Spain, to Italy, to Greece this week. Many, many people haven't gone anywhere because of British Airways and this system glitch that they've had."

ETX Capital analyst Neil Wilson told the UK's Independent:

"British Airways faces all kinds of questions in the wake of its IT failure and investors are rightly turning a bit cautious."

He added that the "reputation damage to the brand" will be far worse than any financial cost.