1st Quarter Results

British Airways PLC
31 July 2003


FIRST QUARTER LOSS
     
•    Pre-tax loss of £45m

•    Operating profit of £40m

•    Revenue down 10.7 per cent versus last year to £1.8bn

•    Net costs down 5.4 per cent and unit costs improve 4.5 per cent versus
     last year
     
•    Net debt down by £226m in the quarter

British Airways today posted a pre-tax loss of £45 million (2002: £65 million
profit) for the first quarter to June 30, 2003.  The operating profit for the
first quarter was £40 million (2002: £158 million profit).

The deterioration in operating profit reflects the significant reduction in
revenue due to continuing economic weakness, the war in Iraq and the impact of
SARS.  This was partially offset by cost savings delivered through the airline's
Future Size and Shape recovery programme.

Passenger capacity, measured in available seat kilometres (ASKs), reduced  by
0.2 per cent for the quarter.  Revenue passenger kilometres (RPKs) were up 1.7
per cent for the quarter.  Yield measured as pence per RPK deteriorated by 12.7
per cent.  Seat factor was up 1.3 points at 71.8 per cent in the quarter.

Net debt was £4,923 million, down £226 million since the start of the financial
year and £1.6 billion from the December 2001 peak.

Net costs were down 5.4 per cent for the quarter at £1,649 million, and unit
costs improved by 4.5 per cent in the same period.  Revenue in the quarter, at 
£1,832 million, was down 10.7 per cent.

Reductions were achieved in most areas of operating cost; aircraft operating
lease costs, selling and distribution costs, landing fees, en route charges and
engineering costs.  Employee and handling costs were flat.  Fuel costs increased
by 7 per cent to £229 million.

Rod Eddington, British Airways' Chief Executive, said: 'This is the most testing
period in aviation history.  It continues to be an extremely challenging revenue
environment due to the effect of SARS, the war in Iraq plus the ongoing economic
weakness.  Future Size and Shape cost efficiencies have partially offset the
weak revenue in the first quarter.

'We must continue to modernise our business.

'The direct cost of the unofficial industrial disruption in July will be in the
range of £30 million to £40 million reflecting costs incurred and lost revenue.
The uncertainty has also impacted forward bookings and will reduce revenue.

'We will work hard to restore British Airways' reputation with our customers.'

Lord Marshall, British Airways' Chairman, said: 'The demand for air travel,
while improving, remains unpredictable. Seat factors are expected to continue at
close to last year's levels but yield improvements will be difficult to achieve.
We expect that revenue in our second quarter will be lower than last year.

'The implementation of our Future Size and Shape programme and other cost
initiatives continues to deliver larger than expected cost savings.'


                                     -ends-

31 July, 2003                                                          KG/097/03


Notes to Editors Attached:

Q1 Future Size and Shape achievements:
     
•    Achieved £632 million of annualised cost savings against March 2004 £650
     million target which includes:
•    Manpower cost savings of £402 million. Manpower equivalent reduction of
     11,227 since August 2001 - on track to achieve 13,000.
•    £125m savings on sales and distribution costs against £100 million
     target.
•    £105 million savings on procurement against £100m target
•    Disposals of £651million against March 2004 £900 million target.
•    Capital Expenditure limited to £400 million for the year.
•    42 per cent of the lowest shorthaul leisure fares introduced on 180 routes 
     sold on line against 50% target.
•    Online check in usage increasing with 53,000 in June, best month recorded.
•    Launched booking online in four new languages in May.
•    Executive Club  relaunched on July 1, 2003 combining five regional schemes 
     into one global scheme with more benefits for members.

A webcast of British Airways' conference call to city analysts can be accessed
via the internet  www.bashares.com - on Thursday, July 31 at 2pm.

Certain information included in this statement is forward-looking and involves
risks and uncertainties that could cause actual results to differ materially
from those expressed or implied by the forward looking statements.

Forward-looking statements include, without limitation, projections relating to
results of operations and financial conditions and the Company's plans and
objectives for future operations, including, without limitation, discussions of
the Company's 'Future Size and Shape' programme, expected future revenues,
financing plans and expected expenditures and divestments.  All forward-looking
statements in this report are based upon information known to the Company on the
date of this report.  The Company undertakes no obligation to publicly update or
revise any forward-looking statement, whether as a result of new information,
future events or otherwise.

It is not reasonably possible to itemise all of the many factors and specific
events that could cause the Company's forward looking statements to be incorrect
or that could otherwise have a material adverse effect on the future operations
or results of an airline operating in the global economy.  Information on some
factors which could result in material difference to the results is available in
the Company's SEC filings, including, without limitation the Company's Report on
Form 20-F for the year ended March 2003.


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