Shares in owner of British Airways plummet after weekend marred by IT failure
The owner of British Airways saw shares nosedive into the red after its "catastrophic" IT failure over the weekend caused mayhem for holidaymakers.
Shares in International Consolidated Airlines Group (IAG) tumbled around 3% in the first day of trading in London after the bank holiday weekend.
Shares in IAG, which is also listed in Madrid, already tumbled heavily in trading in Spain on Monday, wiping around 410 million euro (£357 million) off the stock.
Other airlines were also lower, with Ryanair nearly 1% lower after its full-year results revealed further cuts to fares, and easyJet more than 1% down.
George Salmon, equity analyst at Hargreaves Lansdown, said: " BA may have confirmed that it is now running a full schedule of flights, but investors in IAG, BA's parent company, are counting the cost of a calamitous Bank Holiday weekend.
"While the costs of passenger compensation and refunds could well run into the tens of millions, the whole sorry episode has undeniably put a dent in BA's reputation for delivering a premium service, and the worry for shareholders is that this unquantifiable impact could have longer-term consequences."
IAG - which also owns Spanish carrier Iberia, Aer Lingus and Vueling - also suffered an IT glitch last September, when its check-in systems were hit.
Neil Wilson, senior market analyst at ETX Capital, said investors were worried the outages were a sign that cost-cutting had gone too far at IAG.
"If it keeps happening investors could lose patience almost as quickly as passengers," he added.
Rival Ryanair, which reported full-year figures on Tuesday, said it had seen "strong bookings" over the weekend amid BA's woes.
IAG has been battling against a price war in the airline sector, as well as a knock from the weak pound.
The group issued a profit warning after the EU referendum last summer, and in October warned that ticket prices may have to rise as a result of sterling's slump.
But first-quarter figures earlier this month showed it overcame a 32 million euro (£28 million) hit from the collapse in the value of the pound to report a 9.7% rise in earnings to a record 170 million euros (£147 million).
Shares in IAG closed down more than 1%, or 8.5p to 605.5p.