International Airlines Group, owner of British Airways, revealed a bill of up to 30 million euros, equivalent to £24.6 million, from an air traffic control outage on September 8. The incident disrupted 500 of IAG's flights and affected 85,000 customers, while more than 2,000 flights were cancelled across the sector and hundreds of thousands of passengers saw their travel plans disrupted. The Cyber Monitoring Centre calculated the outage cost the UK economy around £33 million, affecting airlines, airports, ground operators and tour operators.
The air traffic control incident contributed to a sharp decline in IAG's financial performance during the three months to September 30. Pre-tax profits fell 12.9% to 1.63 billion euros, equivalent to £1.33 billion, while operating profits slumped 15.9% to 1.73 billion euros, or £1.42 billion. The group, which also owns Iberia and Vueling, was also hit by a 30.4% jump in jet fuel costs, which rose by 570 million euros, equivalent to £471.9 million, in the quarter.
IAG said it was now expecting full-year fuel costs to soar to 8.9 billion euros, or £7.28 billion, even with actions to fix fuel prices in advance. A 4.5% rise in revenues was not enough to offset the higher costs, though efforts to increase fares and make efficiencies partly mitigated the impact. The airline group said British Airways was hoping to pass through close to 100% of higher fuel costs over the full year but declined to give details on how much fares were rising.
Luis Gallego, chief executive of IAG, said the group had followed strict protocols and was taking action to manage the challenges ahead. He said the outlook for the rest of the year and the start of next year was positive, with efforts to drive savings helping limit the impact of disruption and other costs. IAG said it was proactively managing capacity to focus on profitable flying in the traditionally quieter final quarter of the year.
The results follow recent flight chaos caused by bomb threats, with a number of flights diverted across Europe following a series of hoaxes. Gallego said the group had to take every threat seriously to comply with protocols, adding that authorities were working with airlines to address the issue. Earlier this week, Ryanair said it was considering pay freezes and increased use of AI to help offset a surge in fuel costs next year and warned over a double-digit rise in fares across Europe.