II Editor
01 Jun 2017
NEW ARTICLE: Trends and Targets for 2/06/2017 " FTSE FOR FRIDAY & THE AIM (FTSE:UKX & FTSE:AXX) We last glanced at the AIM market (link here), back in March, and it has finally reached target. Actually, despite showing a truly intimidating growth curve following the BREXIT vote, the ..."[link]
Lupo di mare
01 Jun 2017
Re: IT Debacle Good to see the Board getting upset and wanting answers:-"The inquisition has begun.What happened, why, and who was to blame for a catastrophic failure, that caused misery for tens of thousands of passengers, may cost British Airways over a hundred million pounds and tarnished the image of Britain's aviation flag carrier?There are LOTS of questions to answer.Company sources tell me the first question is: whose responsibility was the integrity of mission-critical IT systems?That sounds like a no brainer - it's BA right? Not necessarily.BA is part of a wider group called International Airline Group (IAG) which includes Iberian, Vueling and a new cheap transatlantic service, Level. Part of the rationale for that kind of structure is to consolidate some functions at group level - that includes IT. The blame for this failure may fall at the door of Willie Walsh - former boss of BA and now Chief Executive of IAG.Second, I'm told that contingency plans for system failure - well, failed.The procedure for rebooting the systems is not quite "switch it off and switch it on again". Stuff needs to done in a certain order, and that didn't happen.Senior company sources acknowledged this was a "big miss" and I've learned that senior figures will be pushing for an inquiry - by professional outside experts - as to why it didn't work.Then there was the response. A very senior figure told me - "it would be impossible to pretend that it was great. We need to figure out how, and why, decisions on how to deal with it were taken".Cost-cutting: virtue or vice?Having said that, other sources were quick to back Willie Walsh - pointing out that IAG is five times more profitable than the similarly-sized Air France KLM.When I suggested that many people will think that is part of the prosecution rather than part of the defence - the insider changed tack: "What happened could have happened to any company - it was a local, rather than systemic, problem and it was definitely not a consequence of underinvestment or cost-cutting."That judgment may not be BA, or IAG's to make.I'm told that the board is likely to push for a third party inquiry into exactly what happened, to make sure best practice was followed. It seems unlikely that someone won't get the hairdryer treatment - or worse.Willie Walsh, the boss of IAG, is in Barcelona to launch a new low-cost service to the US. Some will feel that his first responsibility is to answer questions on why he has not answered publicly to the customers of the established crown jewel of the group that he runs.Not usually one to shirk his media responsibilities, he has - so far - dodged the tough questions he will surely have to answer. "
Lupo di mare
01 Jun 2017
Re: IT Debacle Hers's a bit more on the "IT Debacle" Not invested meself."I admit I'm no IT expert, but over the past few days I've spoken to plenty of people who are.These are people who have either engineered airline IT networks or actually worked on British Airways' systems in the past.What I've heard is a lot of confusion and scepticism at the idea that a local power surge could have wreaked such havoc.There is also confusion as to why back-up systems didn't do their job.Only the people in the room know exactly what happened, so these views are based on the information made public, and bucketfuls of IT experience, including at BA.One put it like this: "BA has two data centres near Heathrow, about a kilometre apart, so how could a power surge affect both?"Then there are all the fail-safes in place.The two data centres mirror each other I'm told, so when one collapses the other should take over.All the big installations have back-up power. If the mains fails, a UPS (uninterruptable power supply) kicks in. It's basically a big battery that keeps things ticking over until the power comes back on, or a diesel generator is fired up.This UPS is meant to take the hit from any "surge", so the servers don't have to.All the big servers and large routers, I'm told, also have dual power supplies fed from different sources.Image copyright BAImage caption BA boss Alex Cruz insists outsourcing did not play a role in the IT fiascoI'm also told that, certainly a while ago, they used to have regular outages to confirm all the back-up bits were working. And daily inspections of the computer room. There is no reason to think these were stopped.It's not even clear who was monitoring the system at the crucial time. Was it a contractor? How much experience did they have?The point is this. Certainly up until a while ago, British Airways' IT systems had a variety of safety nets in place to protect them from big dumps of uncontrolled power, and to get things back on their feet quickly if there was any problem.I'm assuming those safety nets are still there, so why did they fail? And did human error play a part in all this?British Airways chief executive, Alex Cruz, told me recently that the company has launched an exhaustive investigation into what went wrong, although no one can say when it will report back, and whether the findings will ever be made public.If BA wants to repair its reputation, its owner IAG needs to convince the public that making hundreds of IT staff redundant last year did not leave them woefully short of experts who could have fixed the meltdown sooner. And that it won't happen again - at least not on this epic scale.Mr Cruz was adamant, by the way, that the outsourcing did not contribute in any way to this mess."
adeveloper
31 May 2017
IT Debacle With such an inept (and fantastically well paid) senior management team - it is time for the UK to consider removing British Airways as the national flag carrier. Its an embarrassment run by Walsh and Cruz for their own selfish and shorttermist ends
Nutkin2010
30 May 2017
Crass stupidity One IT professional was quoted yesterday as saying "if a catastrophic systems failure like this can happen today you may expect planes to be falling out of the sky tomorrow".The share price can recover when people have short memories but this is a wake up call for the whole industry. No adequate IT back up for basic operations is crass stupidity.
jimboyuk
30 May 2017
Re: Share Price Am afraid I must disagree with you. As a frequent flier to Zurich ( approx every 3 weeks) , I can tell you I've not seen a reduction in fares. With flight times and frequencies very similar to Swiss.....I now use Swiss as my default choice as not only are they cheaper.....but as a result of their continued in flight meal offerings they now provide a better offering (not to forget their delicious trade mark Swiss chocolate offering at the end of each flight). My point is....that flying has become a homogenised experience.....differentiated by the small details that can make all the difference. They've lost out on my twice monthly 250 pound fare expenditure because they have decided to skimp on a few quid if that. It not only about the extra cost to me but also the convenience of being served food on the plane.....particularly at 6 am whenot you arrive 40 mins before departure with no time for shopping.
Ytong
30 May 2017
Share Price Phasing out of meals on short haul obviously irks some but its provision is included in the seat rate. There are plenty of sandwich bars in airports so although I see some being annoyed, as an airline investor it just comes across as tweaking the business.With regard to this IT failure. There are financial ramifications but having read what appears on my past tickets it maybe limited. it might not be right but I think all these events will eventually only amount to a 'blip' on the radar.
jimboyuk
30 May 2017
Blowing over Given the only 2.5% drop today....looks like the whole debacle is quickly blowing over. The more pressing issues in onboard food on short haul. As a past BA frequent flyer and still frequent flyer on london to Zurich....Swiss air now get my business as BA have stopped free meals on short haul flight. Given that Swiss fares normally come in a smidgen cheaper AND I fed....(particularly welcomed on early morning flights), there is no reason in my books to choose BA .
Otter2
30 May 2017
Re: mindblowing incompetence " I am dismayed with this bloke Cruz. He is everything the old BA wasn't - cheap and nasty! I cannot believe Willie hasn't put him in his place by sacking him."Couldn't agree more. As a long time holder, a large part borne of confidence in Willie Walsh, the question uppermost is where in the world is he in all of this. His sure touch on the helm since the days of Marshal/King has brought rich rewards during sometime - very - bumpy times. He also enjoyed a first rate home-grown management team at Heathrow. So now??
Braveheart2
30 May 2017
Re: mindblowing incompetence axolotl, not India then??I think there needs to be greater honesty and clarity in what is coming from BA. As a long term supporter of the Airline, I am dismayed with this bloke Cruz. He is everything the old BA wasn't - cheap and nasty! I cannot believe Willie hasn't put him in his place by sacking him.The response from BA, perceived or otherwise, will go a long way to determining the future of this Airline.Just my personal view, as a disillusioned customer and small time shareholder.
Braveheart2
30 May 2017
Re: Financial Disaster Won't be looking to you for financial advice. Following the 3% drop in Madrid on opening, and subsequent part recovery your figure of below £4 was just.... what exactly??
axolotl
30 May 2017
mindblowing incompetence The CEO claims that they had a 'back-up system' but it was hit by the same power failure. Where on earth was it? In the same building? It should have been in a different country. If one system is in the UK the other should be in Spain.
takenoprisoners
30 May 2017
Re: Turbulence ahead It looks like the early birds took the worm and parked up.Shrewd move as I think you may see the start of some short interests in IAG.If its a £150 Million hit and the group claim lawyers start touting for business then I'd expect there will be constant reminders and solicitors fees.I'm not sure either in all that I have read and seen that there has been any reassurance that it won't happen again.Imvho and please dyor
jey80
29 May 2017
RBS/Natwest had the same problem Does anybody remember that RBS/Natwest had a similar IT problem lasted more than seven days a couple of years ago?Government has promised an inquire into the matter- nothing so far.
gsxrl
29 May 2017
Re: Say outsourcing to India not to save so there was a power cut in all of BA's data centres at the same time? In India and UK, I am assuming that they didn't locate all their systems in one data centre in India, if they did then whoever signed off on it needs to go.Sounds like they have no DR/BC plan and/or hasn't tested it recently or was that too expensive? An accident waiting to happen.Time to sell my shares that I have had since day one, and time to blow the airmiles, and any other UK airline here I come. Its interesting that the British and Irish Lions flew out today to NZ c/o Qantas, not BA !
