1st Quarter Results

British Airways PLC
09 August 2004


REASONABLE Q1 RESULTS



•         Pre-tax profit of £115 million

•         Operating profit of £150 million

•         Revenue up 5.1 per cent to £1.9 billion

•         Total costs down 0.9 per cent and unit costs improve 9.1 per cent

•         Net debt down by £334 million to £3.8 billion



British Airways today posted a pre-tax profit of £115 million (2003: £45 million
loss reflecting the full impact of the war in Iraq and SARS) for the first
quarter to June 30, 2004.



The operating profit for the first quarter was £150 million (2003: £40 million
profit) delivering an operating margin of 7.8 per cent.



Rod Eddington, British Airways' chief executive, said: 'These are reasonable
results but currently fuel and employee costs remain our biggest challenges.
The price of crude oil has soared and we now expect our fuel bill to be £225
million higher than last year.  As a result we will increase our fuel surcharge
on all longhaul sectors.



'In addition, the higher pension contributions of £133 million a year continue
to drive a significant increase in employee costs.



'We continue to improve our products for customers.  More than 100,000 customers
a month now check-in on ba.com and many can also print their own boarding passes
at home.  We have installed new wireless technology in our airport lounges at
Heathrow and Gatwick.'



Martin Broughton, British Airways' chairman, said: 'Market conditions remain
unchanged since our last report. Longhaul premium volumes are recovering
steadily, while short-haul premium travel remains at lower levels.  The
non-premium markets are very price sensitive.



'We continue to forecast a revenue improvement of 2-3 per cent in the current
year.  Yield declines over the full year are expected to be more than offset by
increased volume. Strategies to curb controllable costs remain the key to
achieving long-term, sustainable profitability.'



Passenger capacity, measured in available seat kilometres (ASKs), increased by
3.4 per cent for the quarter and revenue passenger kilometres (RPKs) were up 7.9
per cent.  Seat factor was up 3.1 points at 74.9 per cent in the quarter.



Yield measured as pence per RPK deteriorated by 4.5 per cent - driven largely by
foreign exchange movements.



Cargo volumes, measured in cargo tonne kilometers (CTKs), were up 15.1 per cent
compared with last year, with yields down 9.3 per cent.  Overall load factor was
up 2.3 points at

69.2 per cent.



Total costs were down by 0.9 per cent.  Selling costs, down 14.2 per cent due to
travel agents' commission restructuring and renegotiations in distribution
contracts.  Unit costs improved by 9.1 per cent in the same period driven
largely by foreign exchange movements and capacity increases.



Fuel costs were up 12.7 per cent to £258 million due to increases in fuel price
net of hedging, and employee costs rose 4.4 per cent.



Revenue in the quarter, at £1,925 million, was up 5.1 per cent.



Net debt was £3,824 million, down £334 million since the start of the financial
year.

                                         ends



 August 9, 2004                                                    071/KG/04






A webcast of British Airways' conference call to city analysts can be accessed
via the internet  www.bashares.com - on Monday, August 9 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 2004.




                      This information is provided by RNS
            The company news service from the London Stock Exchange