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BA pilot illness - 12 hr delay but refuse compensation claim

Advice please. BA flight from New York to Heathrow was 12 hours delayed (overnight) as pilot was ill and a replacement had to be flown out from UK. BA have refused my compensation claim stating:

"If a flight is operating from London Gatwick or London Heathrow, our base airports, then it would be expected that we would have standby crew available. However, this flight operated from New York, and we are not able to have standby crew available at every outstation that we operate from. A replacement was flown out from London, and so all reasonable measures were taken"

and,

"Article 5.3 of the EU Regulation 261/2004 states that a carrier is not obliged to pay compensation if it can prove that the delay or cancellation is caused by extraordinary circumstances that could not have been avoided even if all reasonable measures had been taken. I regret, therefore you are not entitled to compensation under the EU Regulation for your delayed flight"

Are they trying to squirm out of paying and what should my next step be?

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