The Anglo-Spanish group, which also owns the likes of Aer Lingus, Iberia and Vueling, has been slapped with a record £183.4m penalty from the Information Commissioner’s Office (ICO) over a data breach last year.
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The fine, equivalent to 1.5% of British Airways’ turnover in 2017, is the first to be made public under the EU’s General Data Protection Regulation (GDPR) which came into effect in May 2018.
Despite the hefty penalty being some way clear of the largest fine handed down by ICO before GDPR – a £500,000 fine imposed on Facebook after the Cambridge Analytica scandal – it could have been worse given that the regulator can impose a maximum fine equivalent to 4% of global turnover.
'BRITISH AIRWAYS RELIES ON TRUST'
AJ Bell investment director Russ Mould said the data breach shows just how important cyber-security is in this day and age, particularly for well-known brands.
‘Businesses keep more and more of our personal data and today’s news suggests that if they lose it, there are significant real-world consequences.
‘Not only are regulators becoming increasingly strict but consumers and other customers are also likely to be unforgiving of failures in this area.
‘A strong consumer brand like British Airways relies on trust and it could be highly damaging if prospective flyers feel they can’t trust the company with their data.’
PILOT STRIKE TALKS
A big fine isn’t the only problem the firm has to deal with at the moment. In common with other major airlines, it is once again facing the prospect of a potentially damaging summer strike by pilots.
Given the size of the profits the group made in 2018, BA pilots want more than the 11.5% pay rise over three years which the airline is offering. IAG’s group pre-tax profit for the year ended 31 December 2018 was €3.2bn, up almost 10% on the year before.
In contrast BA insists that its pay offer to pilots is ‘fair and generous’.
BIG PILOT SHORTAGE
Pilot strikes over pay could become more frequent as a rising global shortage of pilots increases their value still further.
Figures from Boeing suggest that the global commercial aviation industry will need 635,000 more pilots than it currently has by 2035 if it is to keep pace with the rising demand for air travel.
However airlines face a two-fold issue in recruiting pilots. The pool of existing talent is shrinking and, according to the British Airline Pilots Association, the expense of training new pilots – it costs up to £100,000 to obtain a commercial licence – is putting airlines off bringing new talent into the industry.