Hi, I definitely wouldn't accept this as it stands.

1) This correctly reflects BA's position when it comes to crew sickness away from home base - but BA's position seems to have little or no basis on the law as it stands.

'Exceptional circumstances' (in an EU/UK261 context) are circumstances that are, amongst other things, 'not inherent in the operation of an air carrier'. Staff being sick is part and parcel of doing business for any company, so would plainly seem to be inherent in operating an airline. If (as BA admits) aircraft going tech at an outstation is deemed non-exceptional, I fail to see why crew 'going tech' should be treated any differently. The fact that it's unlikely to be reasonable to provide standby crew at all outstations is immaterial - the 'all reasonable measures' test only comes into it if exceptional circumstances are at play. Here, the circumstances - crew sickness - aren't exceptional so it is irrelevant whether or not 'all reasonable measures' could have avoided the delay.

BA are nevertheless adamant that their (IMHO flawed) interpretation of the law is right and have put their money where their mouth is by taking this up to the Supreme Court in the case of Lipton v BA CityFlyer. They lost this case at the Court of Appeal but we are currently awaiting a judgment following a February hearing at the Supreme Court. If that's in BA's favour then I imagine compensation would not be due here, as the circumstances are materially identical. If, as I would hope, the decision is against BA then their refusal in your case would clearly have to be revisited.

2) This sounds like a flat 'customer service gesture' rather than any attempt to correctly calculate the reimbursement due under the Mennens formula. This formula dictates that you take the amount paid for the downgraded portion of the journey (outward/return), multiply this by the appropriate reimbursement percentage, and then pro-rate this based on the mileage of the journey that was downgraded. Unfortunately in this case it's far from clear how each of these elements are to be calculated.

The 'amount paid' in terms of Avios (Avios count as part of the fare) could be contentious since you used a 241 voucher. With a 241, BA claims that the second passenger travels 'for free' (in terms of Avios) and that the voucher doesn't represent payment in kind for Avios. I would disagree and several people have succeeded against BA on this point at CEDR - but the results are admittedly somewhat mixed.

The cash element should be uncontentious - this clearly 'varies depending on the class of travel' and is thus liable to be considered as part of the fare - and you pay the full amount for your companion, regardless of vouchers. However, BA may try and say that the airport fees & government taxes should be deducted from the cash amount - but given that the whole idea of RFS is that liability for these costs is transferred to BA in exchange for a fixed sum (in this case, vastly in excess of the true taxes & fees), I don't think they can retrospectively 'reopen' the calculations like this. I'd thus suggest that 150k Avios + £860 is the correct calculation of the 'fare paid' for the return flight (I'm presuming it was peak or off-peak both ways - if not then adjust as appropriate).

The appropriate reimbursement percentage could similarly be contentious. It's 75% of the fare for 3500km+ (long haul) flights and 50% for 1500-3500km (mid haul) flights. BA could try to go by the strict letter of the Regulation and say that LCA-LHR is marginally under 3500km, thus you are only due 50% reimbursement. But that ignores the fact that you were supposed to be on a single, non-stop flight well above 3500km; if airlines could use an involuntary change of aircraft to reduce the amount of reimbursement due, they could 'salami slice' downgraded long-haul pax onto a series of mid or short-haul flights and thus slash their reimbursement bill at a stroke! I'm unconvinced that this approach would stand up to scrutiny, especially when you consider the emphasis the CJEU has given on even multiple connecting flights constituting a "single unit of transport". Accordingly I'd say that 75% is the appropriate reimbursement percentage.

The mileage is similarly possibly contentious. It's supposed to be calculated pro-rata - but is that as a proportion of the MLE-LHR distance, or the MLE-LCA-LHR distance? Again, I would suggest that since you never planned to make a stop at LCA, BA can't artificially inflate the total mileage by including additional unplanned stops (which would have the effect of reducing the reimbursement). That being said, in this case the difference between MLE-LHR and MLE-LCA-LHR is marginal - only 46 miles in fact - so it's probably not worth arguing the toss over. For the record though, my view would be that the mileage has to be calculated as a proportion of the MLE-LHR distance, so you'd be looking at 2040 / 5306 = 38.5% of the journey mileage being downgraded. (Using MLE-LCA-LHR it would be 38.1%)

Accordingly I would suggest that 75% of 38.5% of 150k Avios + £860, i.e. 43,253 Avios + £247.98 is the correct downgrade reimbursement due. Clearly, even if you valued the £400 voucher as equivalent to cash (which would be exceptionally generous), 43k Avios are worth a lot more than £150. At the typical 1p valuation, they'd be worth nearly £450, and even at the 0.5p rate you can easily 'cash them out' via Nectar or by 'part paying with Avios' they'd still be worth at least £216. Accordingly, BA's current offer is a significant undervaluation of what you're due.

3) Arguably here BA could try and pro-rate the seat assignment fees based on a formula as above, so if they're refunding this in full, this is good news (even if from a customer service perspective, it's the least they should be doing!).

Overall, I suspect you'll be needing to take this case to CEDR to get anything approaching the full compensation and downgrade reimbursement you're due. Do let us know how you get on though, as I'm sure we can help you with that process.