'Terror' alert hits BA revenue

British Airways has said last month's 'terrorism' alert that grounded thousands of its flights cost the airline $76 million.

    Strict security in August caused chaos at British airports

    The airline, Europe's third largest, said on Tuesday that the extra security, set-up after British police arrested 20 people suspected of plotting to blow-up transatlantic flights, forced it to cancel 1,280 flights.

    In a statement to the London Stock Exchange, the company said revenue was lost through the cost of hotels, additional catering and sorting out lost baggage.

    "Since the disruption there has been some impact on forward bookings. The overall level of bookings has returned to levels experienced last year, but is still weaker than the trend of the past few months," BA said.

    Inconsistency

    "Clearly there may or may not be a revenue impact going forward," BA's head of investor relations, George Stinnes, told reporters.

    Asked if the airline might sue airport operator BAA Plc or the UK government to seek compensation for the losses, he said: "We're not going to rule anything in or out."

    Stricter limits on carry-on luggage were adopted after last month's security scare and Stinnes said inconsistency in these rules across Europe was hurting recovery in demand from transfer passengers.

    He cited the example of someone who might be allowed to board with an item in Frankfurt but then is ordered to check in that same article when they transfer in London.

    Overall, however, the airline's share price rose by 1.4 percent on Tuesday and it reported a five percent rise in passenger traffic on August last year.

    SOURCE: Reuters


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