British Airways owner IAG is hoping to receive a financial hit with “tens of millions” of euros from the complete closure of Heathrow Airport, in the best part of the day on March 21.
Speaking at the A4E Airlines Summit in Brussels on March 27, IAG CEO Lewis Gallego announced that Heathrow again had “extraordinary work” to get the airport fully operational again on March 22, but that there was “no procedure” to overcome the situation where a single replacement electrification would affect the facility's generation.
The closure forced the IAG's biggest airline BA to cancel hundreds of flights, and the group is calculating the exact financial impact of the incident a week later.
“We haven't given the exact number. We're still revising everything, but certainly tens of millions,” Gallego.
A European colleague from IAG who spoke at the same event admitted that he had benefited from the need to find alternative flights in a short period of time during the cancellation of Heathrow, but also took important lessons from the incident.
Ryanair Group CEO Michael O'Leary said Ireland's low-cost airlines have written at all major airports in light of the closures, hoping for peace of mind that they can continue to operate in similar circumstances.
“They all assured us that there was a backup generator, but I wouldn't believe the word that,” he says. “But every one of us will go for the grace of God.”
O'Leary believes airports should be liable for the financial costs of such events, but complains that airlines may end up paying anyway.
Meanwhile, Air France-KLM CEO Ben Smith describes the Heathrow incident as an airport “walking call.”
“It was very surprising to us that such a thing could happen at Europe's busiest airport without a backup plan,” he said.
After the incident, Heathrow Airport CEO Thomas Waldy told the Financial Times it would cost about £1 billion ($1.3 billion) to install a “fully resilient” power system at the hub, and told the airlines must take on a share of its financial burden.
IAG recently announced that its full-year net profit rose to just 2.7 billion euros ($2.8 billion), and operating profit rose 27% to 4.4 billion euros. These figures on revenue rose by around 9% to around 32.1 billion euros. This is scheduled to report the results for the first quarter, 2025, on May 9th.
