Final results press release

British Airways PLC
17 May 2004



GOOD RESULTS IN A DIFFICULT YEAR


•         Pre-tax profit of £230m for the full year

•         Operating profit of £405m for the full year

•         Net debt at £4.1bn - lowest level since 1997

•         Pre-tax profit for the quarter of £45m

•         Operating profit for the quarter of £32m

•         Net costs down 2.5 per cent and unit costs improve 8.6 per cent for
          the quarter


British Airways today posted a pre-tax profit of £230 million for the full year
to March 31, 2004 (2003: £135 million profit).  There was a pre-tax profit for
the fourth quarter of  £45 million (2003: £200 million loss).

The operating profit for the full year was £405 million (2003: £295 million
profit).  The operating profit for the fourth quarter was £32 million, £196
million better than last year.

Rod Eddington, British Airways chief executive, said: 'We ended the year a
stronger business despite the challenges faced by our industry.

'We have exceeded our two year Future Size and Shape targets.  We achieved £869
million in cost savings against a target of £650 million and our manpower
reduction at March 2004 was 13,082 against a target of 13,000.

'We have made significant progress in the restructuring of our shorthaul
business and this is reflected in the improved results.  There is more to do.

'We continue to improve the customer experience with new products and greater
use of technology.   We have launched a new Club World sleeper service on
selected longhaul routes and recently opened a new lounge and check-in area at
Heathrow's Terminal 1.  Our stylish new uniform, designed by Julien Macdonald,
has been well received by staff and customers alike.  The first Airbus A321s
join the British Airways fleet later this year.

'In the UK, two out of every three BA customers are travelling with an e-ticket.
This year, we have installed 191 new self-service kiosks around the network
and more than 50 per cent of our shorthaul leisure fares are now sold via ba.com
in the UK.

'Our people have done a wonderful job in challenging circumstances.  I thank
them all.'

Lord Marshall, British Airways chairman, said: 'Market conditions remain
unchanged since our quarter three announcement.  Longhaul premium volumes are
recovering steadily, while shorthaul premium remains at lower levels.
Non-premium volumes are very price sensitive.

'We are forecasting a 2-3 per cent revenue improvement in the current year.  We
expect small yield declines in the full year will be more than offset by volume.
Fuel costs are now expected to be £150 million higher this year than last.
The continuing focus on controllable costs remains key to long-term
profitability.'

The Board has recommended that no final dividend be paid.

Group turnover for the full year was £7,560 million, down 1.7 per cent on a
flying programme 1.5 per cent bigger in available seat kilometers (ASKs).  For
the quarter, group turnover was up 10.7 per cent on a flying programme 4.5 per
cent higher in ASKs.

Revenue passenger kilometres (RPKs) were up 3 per cent for the full year and up
by 6.4 per cent for the quarter.  Seat factor was up 1.1 points for the full
year at 73 per cent - its highest since 1997 and up 1.3 points in the quarter to
70.8 per cent.

In the quarter, capacity was up 6.7 per cent in available tonne kilometers
(ATKs), net costs were down 2.5 per cent, resulting in a unit costs improvement
of 8.6 per cent.  Excluding the exceptional Concorde write-off costs in last
year's results, net costs increased by 2.5 per cent but unit costs still
improved by 3.9 per cent.

Operating cashflow for the full year was £1,093 million, down £92 million on
last year.  Cash inflow, before financing, was £874 million.  Net debt at £4,158
million, fell by £991million from March 2003 and by £2.4 billion from the
December 2001 peak to its lowest level since December 31, 1997.  Gearing is at
its lowest level since 1992 at 53.9 per cent.

                                      ends

17  May, 2003                     KG/042/04





Notes to Editors:

Future Size and Shape achievements:



  • Achieved £869 million of annualised cost savings to March 2004 against
    £650 million target including:
  • Manpower cost savings of £481 million.  Achieved manpower equivalent
    reduction of 13,082 since August 2001 - against 13,000 target.
  • £257 million savings on sales and distribution costs against £100 million
    target.
  • £130 million savings on procurement against £100 million target.
  • Disposals of £939 million against a £900 million March 2004 target.
  • 50 per cent of shorthaul leisure fares sold via ba.com in the UK.
  • Capital expenditure at £572 million against £850 million ceiling.
  • Operating margin of 5.4 per cent for the year - 1.6 points better than
    last year.
  • Reduced the number of aircraft in service by 39 from 330 to 291.
  • Achieved 11 per cent improvement in aircraft utilisation on shorthaul
    against a 10 per cent target.

Others:

•   At March 2004, the FRS17 accounting valuation of the airline's group
    pension schemes shows a £1.183 million net deficit, up £8 million on the
    previous year.

A webcast of British Airways' presentation to city analysts can be accessed via
the internet on www.bashares on Monday, May 17 at 9am followed by the conference
call to city analysts 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, 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.


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