News reports today indicated that the power outage that crippled the British Airways (BA) systems last weekend was due to human error. A power supply was inadvertently cut, resulting in massive passenger gridlock, a reputational dent, and a substantial financial impact from extra costs, passenger refunds and lost business. I imagine there will be an interesting dialogue between BA and the vendor in the weeks to come, as well as discussion of the financial damages they have suffered, and who will make them whole. One for the lawyers and accountants to figure out.
During the event, while frustration mounted for passengers, the aviation industry, notably BA, went into crisis mode. Deal with the consequential issues, locate and fix the problem. The cyber industry watched closely…was it a systems failure caused by BA, was it a cyber hack leading to shutdown, or was it systems failure caused by a third party? BA was quick to identify that this was not a cyber event, not a hack, and, as it appears to have turned out, was simply someone pulling the plug out by mistake. Ok, we can all relax a little then.
But this serves as a huge reminder of the reliance we place on electronic systems. A real ‘what if’ moment.
It’s pretty evident how reliant we have all become on electronic systems and we are frequently reminded how vulnerable they are. To bring it to a personal level, most people struggle to operate effectively when they leave their phone at home by mistake…we all know that feeling.
The BA event serves as a reminder of the potential losses, and how quickly they can mount up when a system fails.
We’d like to think that errors like pulling the plug can be avoided by good business practices. But a targeted attack, as we have seen in other circumstances, may be harder to protect against.
BA’s situation last week serves as a stark reminder that a business income loss happens quickly, and grows quickly. Most people can connect the dots between a fire or other physical event leading to a shutdown and business income loss. Cyber events are really no different…a systems event happens, a business is suspended, and business income loss mounts…systems events are simply a new trigger to business interruption, and the insurance industry is reacting to that with a variety of risk management products.
Passengers’ stress was not caused by a cyber event, not this time…and BA can likely pursue the culprit for financial damage. But what if…