1st Quarter Results

British Airways PLC
6 August 2001


FIRST QUARTER RESULTS 2001-2002 (unaudited)


                                   Three months ended                Year ended
                                              June 30       Increase/   March 31
                                           2001  2000       (Decrease)      2001


Turnover                               £m 2,297 2,310          (0.6)%      9,278

Operating profit                       £m    50    97         (48.5)%        380

Operating margin                        %   2.2   4.2        (2.0)pts        4.1

Profit/(loss) before tax               £m    40  (50)              nm        150

Retained profit/(loss) for the         £m    26  (42)              nm      (129)
period

Capital and reserves at period end     £m 2,402 2,490          (3.5)%      2,368
                                       

Earnings per share
Basic:                                  p   2.4 (3.9)              nm        6.0
Diluted:                                p    na    na              nm        5.9






    nm: Not meaningful

    na: Not applicable



GROUP PROFIT AND LOSS ACCOUNT (unaudited)
                                          Three months               Year ended
                                                 ended                    March
                                               June 30                       31
                                              Restated Increase/       Restated
                                         2001  2000 £m (Decrease)       2001 £m
                                           £m
Traffic Revenue
Scheduled passenger                     1,947    1,943      0.2%          7,803
Scheduled Cargo                           130      140    (7.1)%            579
Non-scheduled services                     15       16    (6.3)%             50
                                        2,092    2,099    (0.3)%          8,432
Other revenue                             205      211    (2.8)%            846
TOTAL TURNOVER                          2,297    2,310    (0.6)%          9,278
Employee costs                            612      593      3.2%          2,376
Depreciation                              186      170      9.4%            715
Aircraft operating lease costs             56       56                      221
Fuel and oil costs                        283      249     13.7%          1,102
Engineering and other aircraft costs      161      165    (2.4)%            662
Landing fees and en route charges         168      171    (1.8)%            645
Handling charges, catering and other
operating costs                           303      331    (8.5)%          1,303
                                                                          
Selling costs                             253      293   (13.7)%          1,135
Accommodation, ground equipment costs
and currency differences                  225      185     21.6%            739
                                                                            
TOTAL OPERATING EXPENDITURE             2,247    2,213      1.5%          8,898

OPERATING PROFIT                           50       97   (48.5)%            380
Share of operating profits in               1                 nm             64
associates
TOTAL OPERATING PROFIT INCLUDING           51       97   (47.4)%            444
ASSOCIATES
Other income                                1                 nm              1
Profit/(loss) on sale of fixed assets
and investments                            92     (58)        nm           (69)
Interest
                                         
    Net payable                          (81)     (70)     15.7%          (297)


    Retranslation credits/(charges) on   (23)     (19)     21.1%             71
    currency borrowings

PROFIT/(LOSS) BEFORE TAX                   40     (50)        nm            150
Taxation                                 (11)       11        nm           (72)
PROFIT/(LOSS) AFTER TAX                    29     (39)        nm             78
Equity minority interest                                                    (2)
Non equity minority interest*             (3)      (3)                     (12)
PROFIT/(LOSS) FOR THE PERIOD               26     (42)        nm             64
Dividends paid and proposed                                               (193)
RETAINED PROFIT/(LOSS) FOR THE PERIOD      26     (42)        nm          (129)

nm: not meaningful

* Cumulative Preferred Securities


OPERATING AND FINANCIAL STATISTICS (unaudited)                      
                                       Three months ended             Year ended
                                                  June 30   Increase/   March 31
                                         2001        2000  (Decrease)       2001
TOTAL AIRLINE OPERATIONS (Note 1)
(including British Regional Air Lines from May 10th, 2001 and go until June 14th
2001)
TRAFFIC AND CAPACITY
RPK (m)                                28,646       32,295   (11.3)%    123,197
                                                                    
ASK (m)                                40,980       44,826    (8.6)%    172,524
Passenger load factor (%)                69.9         72.0    (2.1)pts     71.4
                                                                  
CTK (m)                                 1,093        1,198    (8.8)%      4,735
RTK (m)                                 3,915        4,407   (11.2)%     16,987
                                                                    
ATK (m)                                 6,124        6,475    (5.4)%     25,196
Overall load factor (%)                  63.9         68.1    (4.2)pts     67.4
                                                                  
Passengers carried (000)               11,293       11,633    (2.9)%     44,462
Tonnes of cargo carried (000)             209          234   (10.7)%        914
                                                                    
FINANCIAL
Passenger revenue per RPK (p)            6.85         6.07     12.9%       6.37
Passenger revenue per ASK (p)            4.79         4.37      9.6%       4.55
Cargo revenue per CTK (p)               11.89        11.69      1.7%      12.23
Total traffic revenue per RTK (p)       53.44        47.63     12.2%      49.64
Total traffic revenue per ATK (p)       34.16        32.42      5.4%      33.47
Average fuel price before
hedging                                 89.23        88.92      0.3%     103.94
(US cents/US gallon)

OPERATIONS
Average Manpower Equivalent            59,839       57,874      3.4%     58,989
(MPE)
ATKs per MPE (000)                      102.3        111.9    (8.5)%      427.1
                                                                   
Aircraft in service at period             374          337        37        338
end

TOTAL GROUP OPERATIONS

FINANCIAL
Net operating expenditure per RTK (p)   52.16        45.43      14.8%     47.40

Net operating expenditure per ATK (p)   33.34        30.92       7.8%     31.96


Note 1 Excludes non airline activity companies, principally, Airmiles Travel

Promotions Ltd, BA Holidays Ltd, BA Travel Shops Ltd, Speedwing International

Group and The London Eye Company Ltd.





CHAIRMAN'S STATEMENT

Group Performance

Group profit before tax for the three months to June 30, was £40 million; this
compares with a loss of £50 million last year. The no-frills subsidiary go was
sold for a profit of £100 million; in the same quarter last year a loss of £54
million was incurred on the disposal of Air Liberte.

Operating profit - - at £50 million - - almost halved from last year's level.
This reflected weak market demand as world economic growth slowed,
particularly in the United States. The impact of the UK foot and mouth
outbreak and computer system problems in March also reduced sales. Partially
offsetting the weaker demand were continued benefits from the new aircraft
fleet and network strategy, successful new products (especially the Club World
flat bed, which increased our share of the premium market), and further cost
efficiency actions.

Current fleet strategy is based on smaller aircraft, flying higher frequencies
and carrying a higher mix of premium traffic. Capacity reductions are targeted
on unprofitable routes, transfer and other marginal business. Non-premium
capacity was 11.5% down on a year ago; premium 1.6%.

Passenger yields increased 12.9%; costs per unit of capacity increased 7.8%.
Operating margin - - at 2.2% - - was down 2 points on last year, primarily
because of lower load factors. Excluding the impact of acquisitions and
disposals, Group manpower fell year-over-year for the fifth successive
quarter.

Turnover

For the three month period, Group turnover - - at £2,297 million - - was down
0.6% on a flying programme 8.6% smaller in available seat kilometres (ASK).

For the three months to June 30, Cargo sales were down 7.1%; reduced demand
more than

offset higher yields.

Unit Costs

For the quarter, Group unit costs (pence per ATK) were 7.8% higher than a year
ago. This reflected the adverse impact of exchange rate changes, fuel price
rises (net of hedging), supplier price and wage increases and capacity
reductions. These were partially offset by further cost efficiency actions,
including lower cost of sales, e-procurement initiatives and productivity and
process improvements.

Non Operating Items

Net interest expense for the quarter was £104 million. This included a book
charge for the revaluation of yen debt (used to fund aircraft acquisitions) of
£23 million. The revaluation - - required by accounting standards - - results
from the strengthening of the yen against sterling.

Profit on disposals of fixed assets and investments for the quarter was £92
million, reflecting primarily the disposal of go for £100 million. This
compares with a loss on disposal last year of £58 million, mainly from the
disposal of Air Liberte.

Taxation

From April 1, 2001, we have accounted for deferred tax on a full liability
basis in accordance with Financial Accounting Standard 19. A potential
liability of £1,051 million has been recognised as at that date, with reserves
reduced accordingly and prior periods restated to reflect its impact on
retained earnings, taxation, earnings per share and provisions. This potential
liability has previously been shown as a note to the accounts; it is not
expected to be paid in the foreseeable future.

Earnings Per Share

The profit attributable to shareholders for the three months was equivalent to
2.4 pence per share, compared with last year's loss of 3.9 pence (restated).

Net Debt / Total Capital Ratio

Borrowings, net of cash and short term loans and deposits, were £6,478 million
at June 30 - - up £255 million since the start of the year, due primarily to
investment in new aircraft and the acquisition of British Regional Air Lines
(BRAL). The net debt/total capital (including deferred tax) ratio increased by
0.6 points to 65.1%.

Aircraft Fleet

During the quarter the Group fleet increased by 36 to 374 aircraft in service.
Changes reflected the continued implementation of the revised fleet strategy,
the sale of go and the acquisition of BRAL.

Additions included 1 Boeing 777, 3 Airbus A319, 3 Boeing 737-300, 1 Avro RJ100
for CityFlyer Express, and a mixture of 48 jets and turbo-props from BRAL.
Disposals included 1 Boeing 747-200, 4 Boeing 757-200, 1 Boeing 737-300
operated by DBA, 1 ATR 72 operated by CityFlyer Express and 13 Boeing 737-300
sold with go.



Concorde services remain suspended following the Air France incident in July
2000. Modifications to the fuel tanks are being made and, following test
flights, we remain confident that the Civil Aviation Authority will re-issue
the certificate of airworthiness. While the modifications are made, £14
million of product improvements, including new cabin interior and seats, are
being installed. Services are expected to resume soon.

Subsidiaries and Associates

In May, we purchased British Regional Air Lines Group plc (BRAL); a further
step in British Airways' plans to coordinate better its shorthaul businesses
and reduce fragmentation among subsidiaries and franchise partners. Goodwill
arising on the acquisition amounts to £52 million, subject to finalisation.

In June we sold our subsidiary go for a profit of £100 million.

Alliance Development

We and American Airlines have announced plans for a new alliance that includes
profit sharing on nine transatlantic routes, codesharing, frequent flyer
interchangeability and joint scheduling, pricing and marketing. If approved,
it will result in many consumer benefits, including easier transfers, improved
check-in and airport facilities, and access to more destinations. We will
apply for anti-trust immunity and clearance with the UK and European
authorities in the next few days. Rival airline alliances already operate
similar commercial arrangements.

Outlook

While capacity reductions, yield improvements and product-led market share
gains are helping our results, the outlook for the rest of the year remains
challenging. Seat factors through the busy summer season should be strong; we
expect the winter months to be more difficult, depending on the economic
performance of our major markets.

Our continued focus on reducing less profitable capacity and taking out costs
will improve the business structurally. We are well placed to take advantage
of any upturn in global demand.




GROUP BALANCE SHEET (unaudited)                                                 
                                                      June 30         March 31
                                                     Restated         Restated
                                   2001 £m            2000 £m          2001 £m

FIXED ASSETS
Intangible assets                      110                 61                60
Tangible assets                     10,969             10,191            10,662
Investments                            451                550               426
                                    11,530             10,802            11,148

CURRENT ASSETS
Stocks                                 201                151               170
Debtors                              1,409              1,420             1,444
Cash, short-term loans and deposits    934              1,433               936
                                     2,544              3,004             2,550

CREDITORS: AMOUNTS FALLING DUE     (3,450)            (3,463)           (3,308)
                                                 
WITHIN ONE YEAR                                                         
NET CURRENT LIABILITIES              (906)              (459)             (758)
TOTAL ASSETS LESS CURRENT           10,624             10,343            10,390
LIABILITIES

CREDITORS: AMOUNTS FALLING DUE
AFTER MORE THAN ONE YEAR

Borrowings and other creditors     (6,970)            (6,680)           (6,788)
Convertible Capital Bonds 2005       (112)              (113)             (113)
                                   (7,082)            (6,793)           (6,901)

PROVISIONS FOR DEFERRED TAX        (1,070)              (984)           (1,051)
PROVISIONS FOR LIABILITIES AND        (70)               (76)              (70)
CHARGES
                                     2,402              2,490             2,368

CAPITAL AND RESERVES
Called up share capital                271                271               271
Reserves                             1,947              2,014             1,893
                                     2,218              2,285             2,164
Minority interest                        6                 17                18
Non equity minority interest           178                188               186
                                     2,402              2,490             2,368

STATEMENT OF TOTAL RECOGNISED GAINS AND LOSSES (unaudited)
                                            Three months ended        Year ended
                                                       June 30          March 31
                                                      Restated          Restated
                                  2001 £m               2000 £m         2001 £m

Profit/(loss) for the period        26              (42)                64
Other recognised gains and
losses relating to the period       28                 6              (30)

Exchange and other movements
Total recognised gains and          54              (36)                34
losses

These summary financial statements were approved by the directors on August 6,
2001.


GROUP CASH FLOW STATEMENT (unaudited)
                                                       Three months  Year ended
                                                              ended
                                                            June 30    March 31
                                                   2001        2000        2001
                                                     £m          £m          £m

      CASH INFLOW FROM OPERATING ACTIVITIES         297         424       1,251

      DIVIDENDS RECEIVED FROM ASSOCIATES              7                      33

      RETURNS ON INVESTMENTS AND SERVICING OF      (75)        (65)       (342)
      FINANCE

      TAXATION                                                               15

      CAPITAL EXPENDITURE AND FINANCIAL           (111)        (21)       (457)
      INVESTMENT

      ACQUISITIONS AND DISPOSALS                   (10)          41          26

      EQUITY DIVIDENDS PAID                                               (194)

      Net cash inflow before management of liquid
      resources and financing                       108         379         332

      MANAGEMENT OF LIQUID RESOURCES                (1)       (295)         159

      FINANCING                                   (111)        (87)       (521)

      Decrease in cash in the period                (4)         (3)        (30)




      GROUP FINANCING REQUIREMENT
      Net cash inflow before management of liquid
      resources and financing                       108         379         332
      Acquisitions under finance leases and hire
      purchase arrangements                       (203)       (134)       (663)
      Total financing (requirement)/surplus for
      the period                                   (95)         245       (331)


      Total tangible fixed asset expenditure,       362         255       1,405
      net of progress payment refunds


NOTES TO THE ACCOUNTS

For the period ended June 30, 2001
  1   ACCOUNTING CONVENTION

      The accounts have been prepared on the basis of the accounting policies
      set out in the Report and Accounts for the year ended March 31, 2001 in
      accordance with all applicable United Kingdom accounting standards and
      the Companies Act 1985 and are consistent with those applied in the
      previous year, with the exception of the implementation of FRS 19 '
      Deferred Tax'. As described in Note 7, the comparative figures have been
      restated as a result of implementing this standard. In addition
      expendable stocks have been reclassified from fixed assets to stocks and
      comparative figures restated resulting in increased stock at June 30,
      2000 of £82 million and at March 31, 2001 of £104 million.

                                             Three months ended    Year ended
                                                        June 30      March 31
                                 2001 £m                2000 £m       2001 £m


  2   RECONCILIATION OF OPERATING
      PROFIT

      TO CASH INFLOW FROM OPERATING
      ACTIVITIES
      Group                           50                     97           380
      operating
      profit

      Depreciation                   186                    170           715
      and
      amortisation

      Other items                                           (6)           (1)
      not involving
      the movement
      of cash

      Increase in                   (69)                  (126)          (38)
      stocks and
      debtors

      Increase in                    130                    289           195
      creditors

      Cash inflow                    297                    424         1,251
      from operating
      activities

  3   RECONCILIATION OF NET CASH
      FLOW TO 

      MOVEMENT IN NET DEBT

      Decrease in                    (4)                    (3)          (30)
      cash during
      the period

      Net cash
      outflow from                   111                     88          524
      decrease in
      debt and lease
      financing

      Cash outflow/                    1                    295        (159)
      (inflow) from
      liquid
      resources

      Change in net                  108                    380         335
      debt resulting
      from cash
      flows

      New finance
      leases taken                 (203)                  (134)       (663)
      out and hire
      purchase
      arrangements
      made

      Divested from                                              
      subsidiary                                             59          69
      undertakings
      sold during
      the period

      Assumed from
      subsidiary                   (117)
      undertakings
      acquired
      during the
      year

      Conversion of                    1
      Convertible
      Capital Bonds

      Exchange                      (44)                   (88)        (48)
      movements

      Movement in                  (255)                    217       (307)
      net debt
      during the
      period

      Net debt at                (6,223)                (5,916)     (5,916)
      April 1

      Net debt at                (6,478)                (5,699)     (6,223)
      period end

                                             Three months ended   Year ended
                                                        June 30     March 31
                                 2001 £m                2000 £m      2001 £m

  4   OTHER INCOME
      AND CHARGES

      Income from                      1                                   1
      trade
      investments
                                       1                                   1

                 Other income and
                 charges
                 represented by:

                 Group                 1                                  1
                 Associates            1                                  1


NOTES TO THE ACCOUNTS (Continued)

For the period ended June 30, 2001

                                              Three months ended     Year ended
                                                         June 30       March 31
                                  2001 £m                2000 £m        2001 £m

  5   PROFIT ON SALE OF
      FIXED ASSETS AND
      INVESTMENTS
      Net profit on                   100
      disposal of go
      (Note 1 below)

      Net loss on                                           (54)           (54)
      disposal of Air
      Liberte
      Share of net
      profit on                                                              22
      disposal of
      Amadeus by Iberia

      Net loss on the
      disposal of other               (8)                    (4)           (37)
      fixed assets and
      investments

                                       92                   (58)           (69)


      Represented by:

      Group                          (92)                   (58)           (96)

      Associates                                                             27
      (including
      disposal of
      Amadeus)

                                     (92)                   (58)           (69)

Note 1 - The loss on disposal of go is subject to final determination of the
costs associated with the transaction.

  6   INTEREST
      Net payable:
      Interest payable                 94                     90            389
      less amount
      capitalised

      Interest                       (13)                   (20)           (92)
      receivable

                                       81                     70            297

      Retranslation
      charges on                       23                     19           (71)
      currency
      borrowings

                                      104                     89            226

      Net interest
      payable
      represented by:

      Group                           104                     89            215

      Associates                                                             11

                                      104                     89            226


  7   TAXATION

      During the period the company has implemented FRS 19 'Deferred Tax',
      which requires full provision for deferred tax. Under the options allowed
      the company has chosen not to discount the resulting provision. The
      comparatives have been restated, resulting in a reduction to the tax
      charge of £17 million for the quarter ended June 30, 2000 and an increase
      to the tax charge of £50 million for the year ended March 31, 2001. The
      deferred tax provision is included on balance sheet within Provisions for
      Liabilities and Charges and amounts to £1,070 million at June 30, 2001
      (March 31, 2001: £1,051 million; June 30, 2000 £984 million). None of the
      deferred tax is expected to become payable in the foreseeable future.

      Included in the tax charge for the period ended June 30, 2001 is a charge
      of £23 million in relation to the sale of go.

  8   EARNINGS PER SHARE

      Basic earnings per share are calculated on a weighted average of
      1,075,946,000 ordinary shares (June 2000: 1,075,079,000; March 2001:
      1,075,496,000)as adjusted for shares held for the purposes of employee
      share ownership plans including the Long Term Incentive Plan. Fully
      diluted earnings per share are calculated on a weighted average of
      1,084,023,000 ordinary shares (June 2000: 1,075,079,000; March 2001:
      1,084,761,000).

      The number of shares in issue at June 30, 2001 was 1,082,691,000 (June
      30, 2000: 1,081,025,000; March 31, 2001: 1,082,552,000) ordinary shares
      of 25 pence each.


NOTES TO THE ACCOUNTS (Continued)

For the period ended June 30, 2001

                                                           June 30        March
                                                                             31
  9   TANGIBLE ASSETS                             2001        2000         2001 
                                                    £m          £m           £m

      Fleet                                      9,056       8,335        8,761

      Property                                   1,379       1,483        1,418

      Equipment                                    534         373          483

                                                10,969      10,191       10,662

 10   INVESTMENTS

      Associated undertakings                      405         517          381

      Trade investments                             21           8           20

      Investment in own shares                      25          25           25

                                                   451         550          426

 11   CREDITORS: AMOUNTS FALLING DUE
      WITHIN ONE YEAR

      Loans                                         50         134           49

      Finance leases                               106          88          106

      Hire purchase arrangements                   395         302          329

                                                   551         524          484

      Overdrafts - unsecured                                                  3

      Corporate taxation                            34          24           31

      Other creditors and accruals               2,865       2,915        2,790

                                                 3,450       3,463        3,308


 12   BORROWINGS AND OTHER CREDITORS

      FALLING DUE AFTER MORE THAN ONE YEAR

      Loans                                        988         894          992

      Finance leases                             2,382       1,865        2,240

      Hire purchase arrangements                 3,379       3,736        3,327

                                                 6,749       6,495        6,559

      Other creditors and accruals                 221         185          229

                                                 6,970       6,680        6,788

 13   RESERVES

      Balance at April 1                          1,893       2,877       2,877

      Prior Year Adjustment*                                (1,001)     (1,001)

      Balance at April 1 as restated (see         1,893       1,876       1,876
      Note 7)

      Retained profit/(loss) for the period          26        (42)       (129)

      Exchange and other adjustments                 28           6        (30)

      Net movement on goodwill re Air                           173         173
      Liberte disposal

      Premium arising from issue of
      ordinary share capital                                      1           3


                                                  1,947       2,014       1,893

*Prior year adjustment relates to the adoption of FRS 19 'Deferred Tax'

14 The figures for the three months ended June 30, 2001 and 2000 are unaudited
   and do not constitute full accounts within the meaning of Section 240 of the
   Companies Act 1985. The figures for the year ended March 31, 2001 have been
   extracted from the full accounts with certain minor presentational changes
   and restatements (see Note 1) for that year, which have been delivered to
   the Registrar of Companies and on which the auditors have issued an
   unqualified audit report.

INDEPENDENT REVIEW REPORT TO BRITISH AIRWAYS Plc

Introduction

We have been instructed by the Company to review the financial information set
out within the Group Profit and Loss Account, Group Balance Sheet, Group Cash
Flow Statement and Notes to the Accounts and we have read the other
information contained in the interim report and considered whether it contains
any apparent misstatements or material inconsistencies with the financial
information.

Directors' responsibilities

The interim report, including the financial information contained therein, is
the responsibility of, and has been approved by, the directors. The Listing
Rules of the Financial Services Authority require that the accounting policies
and presentation applied to the interim figures should be consistent with
those applied in preparing the preceding annual accounts except where any
changes, and the reasons for them, are disclosed.

Review work performed

We conducted our review in accordance with guidance contained in Bulletin 
1999/4

issued by the Auditing Practices Board for use in the United Kingdom. A review
consists principally of making enquiries of Group management and applying
analytical procedures to the financial information and underlying financial
data and based thereon, assessing whether the accounting policies and
presentation have been consistently applied unless otherwise disclosed. A
review excludes audit procedures such as tests of controls and verification of
assets, liabilities and transactions. It is substantially less in scope than
an audit performed in accordance with United Kingdom Auditing Standards and
therefore provides a lower level of assurance than an audit.

Accordingly we do not express an audit opinion on the financial information.

Review conclusion

On the basis of our review we are not aware of any material modifications that
should be made to the financial information as presented for the three months
ended June 30, 2001.

    Ernst & Young LLP

    London

    August 6, 2001



UNITED STATES GENERALLY ACCEPTED ACCOUNTING PRINCIPLES (US GAAP) INFORMATION

The accounts have been prepared in accordance with accounting principles
accepted in the United Kingdom which differ in certain respects from those
generally accepted in the United States. The significant differences are the
same as those set out in the Report and Accounts for the year ended March 31,
2001, with the exception of the implementation of FRS 19 'Deferred Tax'. The
comparatives have been adjusted to reflect this change. In addition the company
has adopted FAS 133 effective from April 1, 2001.

The adjusted net income and shareholders' equity applying US GAAP are set out
below:
                                              Three months ended     Year ended
                                                         June 30       March 31
                                                        Restated       Restated
                                             2001        2000 £m        2001 £m
                                               £m

Profit/(loss) for the period as
reported in                                    26           (42)             64

the Group profit and loss account
US GAAP adjustments                            16           (22)            162

Net income/(loss) as so adjusted to
accord with US GAAP                            42           (64)            226

Net income/(loss) per Ordinary Share
as so adjusted

Basic                                        3.9p         (6.0)p          21.0p

Diluted                                      3.9p         (6.0)p          20.8p

Net income/(loss) per American
Depositary Share

as so adjusted

Basic                                         39p          (60)p           210p

Diluted                                       39p          (60)p           208p

                                                        June 30        March 31
                                                       Restated        Restated
                                               2001        2000         2001 £m
                                                 £m          £m

Shareholders' equity as reported in the
Group                                         2,218       2,285           2,164

balance sheet
US GAAP adjustments                              40       (152)             170

Shareholders' equity as so adjusted to
accord with US GAAP                           2,258       2,133           2,334

AIRCRAFT FLEET

            Number in service with Group companies at June 30,2001

                                                      Changes
                           On  Operating Leases Total   Since
                      balance
                        sheet       off balance  June   March     Future
                                          sheet
                     Aircraft Extendible Other   2001    2001 Deliveries Options

AIRLINE OPERATIONS (Note 1 & 2)

Concorde (Note 3)           7                      7

Boeing 747-200             11          1          12     (1)

Boeing 747-400             56                     56

Boeing 777                 41                     41       1          2      16

Boeing 767-300             21                     21

Boeing 757-200             38          2     1    41     (4)

Airbus A318                                                          12      12

Airbus A319(Note 4)        14         10          24       3         15     117

Airbus A320                10                     10                 20

Boeing 737-300                              27    27    (11)

Boeing 737-400             22          5     7    34

Boeing 737-500                              10    10

Turbo Props (Note 5)        1          5    40    46      25

Embraer RJ145              12          5     9    26      19          4      17

Avro RJ100                  6         10          16       1                  6

British Aerospace 146       3                      3       3

GROUP TOTAL(Note 6)       242         38    94   374      36         53     168


Notes:


        1     Includes those operated by British Airways Plc, British Airways
        (European Operations at Gatwick) Ltd, Brymon Airways Ltd, CityFlyer
        Express, Deutsche BA and British Regional Air Lines.

        2     Excludes 1 Boeing 737-200 and 3 Boeing 757-200s stood down
        pending disposal or return to lessor, 1 Boeing 747 - 400 sub-leased to
        Qantas and 1 Boeing 737-300 and 2 Boeing 777s delivered but not yet in
        service.

        3     7 Concordes are currently stood down as a result of the
        investigation into the Air France incident of July 25, 2000.

             Additional safety modifications have been fitted on one aircraft
        which has been subject to tests both on the ground and in the air. An
        application for the reissue of a certificate of airworthiness by the
        Civil Aviation Authority will be made in the near future with a
        resumption of services planned soon after.

        4     Options include reserved delivery positions and, if taken, may
        be A319, A320, or A321.

        5     Includes 13 Jetstream 41 aircraft, 13 British Aerospace ATP
        aircraft, 5 ATR72 aircraft and 15 De Havilland Canada DHC-8 aircraft.

        6     Includes 13 Jetstream 41 aircraft, 13 British Aerospace ATP
        aircraft, 19 Embraer 145 aircraft (including 4 future deliveries and 3
        options) and 3 British Aerospace 146 aircraft acquired with the
        purchase of British Regional Air Lines.