Heathrow Closure Causes Millions in Losses for Airlines

(Patria) - A fire that broke out on Friday at a power station near London's Heathrow Airport caused the temporary closure of the airport, leading to major disruptions in air traffic.

The fire also destroyed the backup power supply system, leaving hundreds of thousands of passengers without flights. The fire was brought under control after seven hours, but the consequences are still being felt, writes Euronews.

Heathrow management warned of significant disruptions in the coming days, urging passengers not to come to the airport until normal operations are restored.

British Airways, one of the airlines most severely affected by the incident, reported serious consequences for its business.

Shares of the parent company International Consolidated Airlines Group S.A. (IAG) fell by 3 percent in the morning and an additional 1.5 percent in the early afternoon on the London Stock Exchange.

Other European airlines also felt the negative trend. KLM-Air France shares decreased by 1.5 percent, Lufthansa by 1.7 percent, while EasyJet recorded a drop of approximately 1 percent.

Even airlines not operating at Heathrow felt the consequences - Wizz Air shares decreased by 1.4 percent, and Ryanair by 0.8 percent.

Analysts estimate that British Airways could pay between 36 and 60 million euros in passenger compensation.

According to an analysis by investment bank Jefferies, these costs could reduce the group's earnings before interest and taxes (EBIT) for 2025 by 1 to 3 percent.

Russ Mould, investment director at AJ Bell, pointed out that investors expect a swift resolution to the situation at Heathrow.

However, he added that IAG shares have fallen by a quarter from their five-year peak in February, indicating deeper concerns about consumer and business travel in an uncertain economic environment.

The consequences were also felt in other sectors of travel and tourism. German tourism group TUI, owner of five airlines, recorded a share price drop of 1.8 percent.

Intercontinental Hotels Group experienced one of the biggest losses in London, with a drop of 3.7 percent.