British Airways to Fly 90% of T5 Schedule by Friday (Update2)

April 2 (Bloomberg) -- British Airways Plc plans to operate about 90 percent of its timetable at London Heathrow airport's Terminal 5 by the end of this week as it clears the baggage backlog that has crippled operations at the new building.

The carrier scrapped 50 flights today, or 13 percent of the terminal's schedule, as disruption at Europe's busiest airport enters a seventh day. Cancellations will number 32 tomorrow and 34 on Friday, British Airways spokesman Anthony Cane said, or a little less than 10 percent of the planned program.

Cancellations caused by snags in the 4.3 billion-pound ($8.5 billion) terminal's computerized baggage system total more than 350 since the facility opened March 27. The airline has had to bring in courier firms and 400 volunteers from its own workforce to help clear a backlog of about 20,000 bags.

``We are working around the clock to try to deliver the delayed bags as soon as we can and that 20,000 figure is changing all the time,'' said Cane. The number of cancellations today matches yesterday's tally, he said.

British Airways fell 1.75 pence, or 0.7 percent, to 247.5 pence. The stock has declined 20 percent this year, reducing the London-based company's market value to 2.85 billion pounds ($5.65 billion).

Europe's third-biggest airline had been counting on Terminal 5, which took 20 years to plan and build, to help ease journeys and retain passengers put off by Heathrow's overcrowding. The carrier started what it described as ``exhaustive'' customer trials in September after taking possession of the complex from airport owner BAA Ltd., a unit of Madrid-based Grupo Ferrovial SA.

Log-On Failure

Following a technical glitch in the computerized luggage system that meant baggage handlers were unable to log on, cases that have been unloaded at Heathrow are being rescreened manually. In some instances, this requires the luggage to be driven to London Gatwick airport for the security checks.

Package-delivery firms including FedEx Corp. have been drafted in to forward the luggage to its owners. Some bags are being sent to a contracted sorting facility in Milan, spokesman Cane said, where they are screened and returned by courier.

``It's another way that we can distribute bags to customers as quickly as possible without using our own planes,'' he said.

Cancellations are being restricted to short-haul locations to which British Airways has multiple flights, so that passengers may be able to book on later services. Customers will be able to claim a refund for canceled flights, or rebook, according to the airline.

British Airways is already the continent's worst for lost luggage and the second-worst for delayed bags, according to the Air Transport Users Council. Heathrow was the worst airport in Europe for flight delays in 2007, according to the Association of European Airlines.

To contact the reporter on this story: Tracy Alloway in London at talloway@bloomberg.net

To contact the editor responsible for this story: Chris Jasper at cjasper@bloomberg.net.