What happened
NATS, a public-private company, experienced a technical problem that affected its flight processing system on Tuesday, which grounded flights across the UK and caused disorder at airports. The fault was resolved later on Tuesday, but because flights were grounded and then resumed many aircraft, crews and passengers ended up in the wrong places, causing follow-on disruption.
Scope of the disruption
Data compiled by Cirium shows UK airports had more than 1,750 flight cancelations on Tuesday, and flight disruption continued into Wednesday. British Airways canceled 200 flights on Wednesday.
Who is asking what
Tim Alderslade, chief executive officer of Airlines UK, sent a letter on Wednesday to Transport Secretary Heidi Alexander asking the government and the Civil Aviation Authority to state how they will investigate the glitch, to require NATS to publish a plan to make improvements, and to review the liability framework so carriers are not left bearing the costs. Alderslade wrote, "This kind of failure simply cannot happen again," and "Airlines should not be left as the insurer of last resort for failures they did not cause and cannot control."
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Government response and what it means for your portfolio
In the House of Commons on Wednesday Heidi Alexander said, "I do not believe this issue was unavoidable," and added, "I will leave absolutely no stone unturned in understanding what has happened here." If the government follows through with an inquiry, the outcome could influence whether airlines keep paying for such shocks or whether liability rules change, which matters to your portfolio if it holds airline stocks.
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