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British Airways is facing fines of up to £5,000 per passenger for breaking European rules by misleading the hundreds of travellers stranded at Heathrow about their compensation rights. Chaos at Terminal 5, which forced the cancellation of 72 flights yesterday, will cause further disruption for thousands more passengers throughout the weekend.

Last night BA confirmed that a further 54 incoming and outgoing flights will be cancelled today, blighting the holidays of thousands of families. The Times has learnt that managers at the airline were warned by unions a fortnight ago that baggage staff had not been properly trained to handle its new system.

The Air Transport Users Council (AUC) said that a letter issued by BA to passengers on Thursday night breached the European regulation setting out the minimum rights for travellers whose flights are delayed or cancelled. The letter said: “Regrettably, we are unable to provide you with a hotel room during this disruption. If you make your own arrangements, we will be happy to consider reimbursement of some of your out-of-pocket expenses.”

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It then listed the maximum amounts that passengers could claim, including £100 for two people sharing a hotel room. Staff at the terminal’s hotels reservation centre said that the minimum rate on Thursday night for a double room was £250.

However, EU regulations require airlines to provide hotels for all passengers delayed overnight and do not set any maximum cost. They also state that passengers must be informed of their full rights under the regulation, including compensation of up to £460 for cancelled flights and two free phone calls. The letter did not mention the regulation, compensation or phone calls. Simon Evans, the AUC’s chief executive, said: “On the face of it the letter is a clear breach of the regulation because it does not explain clearly what people are legally entitled to. It appears to be deliberately misleading and worded to put people off thinking they had an entitlement. It would make some people cautious about even booking into a hotel. It seems BA was trying to minimise costs.”

He said the AUC would refer the letter to the Civil Aviation Authority as evidence of a breach of the regulation. The CAA has the power to take enforcement action against airlines over unresolved passenger complaints.

Mr Evans said BA should not have set a maximum amount for hotel costs and should have had a better contingency plan in place to help passengers.

In a statement last night the airline said: “We do not believe it was a breach of the regulation. We will consider claims on a case by case basis.”

BA, the sole occupant of Terminal 5, cancelled 72 flights yesterday, four more than on the opening day on Thursday. It refused to say how many passengers had been affected. Glitches in the automated baggage system and lack of training among baggage handlers continued to delay flights.

Many passengers spent Thursday night at the terminal, either because their flights had been cancelled or because BA had stopped accepting checked-in luggage. Some complained about BA’s stance on hotel reimbursement, particularly as hotels were allegedly increasing their prices by as much as 100 per cent. Hasim Sakarya, a chemical engineer from Turkey, had his flight to Istanbul cancelled yesterday. He said: “We got the letter saying £100 was the maximum but £260 was the cheapest room. We had to stay otherwise we’d be sleeping on the floor. I don’t know how long BA will take to reimburse us, what forms we need, nothing. I am never flying BA again.”

Malik Ibrahim, 26, who spent £300 on a room on Thursday night after his flight to Newcastle was cancelled, said: “I still don’t know whether BA will refund me the entire cost of the hotel. It’s a bit of a joke.”

BA issued a revised letter to passengers delayed overnight last night, saying that they could claim up to £200 for a hotel room.

BA shares fell more than 3 per cent yesterday. There were also concerns on the impact of the “open skies” policy which comes in tomorrow.

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