TECHNOLOGICAL BREAKDOWN
British Airways to count the cost in pounds and reputation
The massive tech failure raises questions over CEO Alex Cruz’s aggressive cost-cutting strategy
Frankfurt/London — With British Airways operations largely back to normal after a weekend of numerous cancellations, the airline’s focus now shifts to tallying the costs and causes of the fiasco. The UK carrier has scrapped almost 600 flights since Saturday because of a computer failure and is still processing thousands of passengers who missed flights or lost their luggage. The crisis puts the spotlight on CEO Alex Cruz, who took charge a year ago to lift profit as the carrier struggles to fend off budget rivals. The breakdown raises questions over his aggressive cost-cutting strategy. Measures in his four-year programme at the airline include cutting almost 700 back-office jobs as well as maintenance posts and outsourcing some technology operations. "Coming after a spate of other issues, the bad public relations and potential reputational aftermath will likely hit future revenues beyond the likely material impact," Damian Brewer, an analyst with RBC Capital Markets, said in a note...
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