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Heathrow’s T5 Chaos to Cost BA $32 Million

Chaos surrounding the opening of its new terminal at London Heathrow should clear next week, British Airways said on Thursday, after costs to the airline of around 16 million pounds ($31.8 million) so far.

AP

The high-profile opening of Terminal 5 last month turned into an unmitigated public relations disaster, with hundreds of flights cancelled and tens of thousands of bags going missing.

"We would expect next week to get back to a full program," BA's head of investor relations George Stinnes told reporters.

"By the end of today there should be no bags left at Heathrow.

They will all be in movement towards the customer." The airline said the impact of disruption had been borne by its shorthaul routes where there were 300 cancelled flights, equating to 0.2 percent of capacity.

"The financial impact of these events is estimated to be around 16 million pounds, reflecting all costs associated with the disruption and lost revenue opportunities," it added.

BA shares were down 3.6 percent to 238.5 pence, mostly reflecting losses earlier in the day.

"Not as bad as some estimates," said analysts at Merrill Lynch.

Taking Stock

BA plans to move longhaul flights, which make up the other half of its Heathrow passengers, to T5 on April 30, however, and analysts at Deutsche Bank this week forecast the problems would persist into the summer and cost around 150 million pounds in total.

"Now's the time to sit down and take stock," said Stinnes.

"It's a very big move because it's the whole longhaul piece." The airline said its passenger traffic fell 2.8 percent in March, with a 5 percent decrease in premium traffic and a 2.3 percent fall in non-premium traffic.

But the figures had been complicated by the early Easter this year and changes to school holidays, which had reduced the number of business travelers.

"Underlying conditions in longhaul premium traffic continue to be strong, while shorthaul premium and longhaul non-premium continue to be weak," BA added.

Passengers to the Asia Pacific region were down 6 percent and those to Africa and the Middle East were down 5.7 percent.

BA's load factor -- a measure of how well it filled its planes -- decreased 0.9 percentage points versus last year, to 75.4 percent.