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The power outage that closed Heathrow airport for a day in March cost British Airways £40m, the national carrier has revealed.
The airline said it was “assessing options” but said it had no recourse to compensation from Heathrow.
Airlines were infuriated by the response and recovery time from the power outage, which came about after a substation caught fire overnight. A report from the National Energy System Operator on Thursday confirmed that Heathrow took seven hours to reopen after its power was restored, allowing only a handful of flights to operate.
The BA chief executive, Sean Doyle, said there was no automatic form of recovery for the airline, either from insurers or in compensation from Heathrow, for the lost revenue, refunds and costs of looking after delayed passengers.
Doyle said: “We’re obviously assessing options, but under regulation at the minute, we’ve no immediate recourse.”
A Heathrow-commissioned review into the incident conducted by the non-executive director Ruth Kelly is expected later this month.
Despite the costs of the power outage, BA’s parent company, International Airlines Group (IAG) said first-quarter revenue rose by 9.6% to €7bn (£5.9bn), while operating profit increased by €130m to €198m.
IAG also announced it had struck a $13bn (£9.8bn) deal to buy 32 new planes for BA from the US aircraft maker Boeing, a day after a trade agreement with the US cut tariffs on the industry.
The group – which also owns Aer Lingus, Iberia and Vueling – also announced an $8bn deal for 21 Airbus aircraft, to be deployed across IAG.
The announcement came a day after the US agreed to scrap tariffs on Rolls-Royce jet engines, used on the Boeing and Airbus aircraft, which led to the company’s share price soaring by almost 4% in trading on Thursday.
Luis Gallego, IAG’s chief executive, welcomed the tariff exemption but said the aircraft deal and the broader trade announcement were coincidental – despite the order being cited by the Trump administration before it was revealed.
Gallego said: “The UK government and Boeing were aware we were in this tender process. Tariffs in general we believe are not good... no tariffs will help us to develop the business, and I assume they took that into negotiations.”
The IAG chief financial officer, Nicholas Cadbury, added: “It’s helpful for us, but it wasn’t part of the decision.”
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The Boeing planes IAG ordered will be powered by the US company General Electric’s engines, meaning the contract would not have been subject to Trump’s new US tariffs even if a UK-US trade deal had not been struck. The Airbus aircraft will use Rolls-Royce engines.
Howard Lutnick, the US commerce secretary, said on Thursday that an unnamed UK company would buy Boeing planes worth $10bn.
IAG said the list price of each Boeing aircraft was approximately $397m, giving the deal a headline value of $12.8bn. The Airbus list price was $374m per aircraft. However, IAG said that it negotiated a “substantial discount” from the list price on each of the deals.
“This order marks another milestone in our strategy and transformation programme and underlines our commitment to strengthening our airline brands and enhancing our customer proposition,” Gallego said.
Separately, IAG said it had seen “some recent softness” in economy ticket sales by US holidaymakers in recent months. However, it said there was “strength” in premium tickets such as business class, which mitigated those effects.
Gallego said: “We continue to see resilient demand for air travel across all our markets, particularly in the premium cabins and despite the macroeconomic uncertainty.”
Aarin Chiekrie, an analyst at Hargreaves Lansdown, said: “Tariffs had been weighing on sentiment towards the travel sector. But with 80% of flights for the second quarter already booked, the outlook is brighter than many expected.”
