FURTHER PROGRESS IN Q2

British Airways PLC
08 November 2004


FURTHER PROGRESS IN Q2


     •    Pre-tax profit of £220 million

     •    Operating profit of £240 million

     •    Net costs down 3.2 per cent
   
     •    Unit costs down 6.1 per cent
          
     •    Net debt at £3.3 billion

British Airways today announced a pre-tax profit of £220 million (2003: £105
million) for the three months ended September 30, 2004.

The three-month pre-tax figures took the result for the half-year to £335
million profit (2003: £60  million).

Operating profit for the quarter was £240 million (2003: £195 million).  The
operating margin was 11.8 per cent.  Yields in the second quarter were down 5.1
per cent (2003: 5.9 per cent down).  The operating profit for the half-year was
£390 million (2003: £235 million).  There will be no interim dividend.

Rod Eddington, British Airways' chief executive, said: 'We are making steady
progress in building a more robust  airline.  Unit costs continue to improve and
our debt is at its lowest level since 1993.  Rising fuel costs, however, are
expected to continue and remain a challenge along with employee costs.

'We continue to invest in our product and have welcomed the first A321 aircraft
into our fleet.  We will have five more by the end of December.

'To make the travel experience quicker and easier we have added more features to
our ba.com website.  It has become so popular that a quarter of all our
customers now visit ba.com before they fly.  Booked revenue on ba.com has risen
by 42 per cent since last year.

'Online printed flight boarding cards are now accepted at 31 airports in the UK
and Europe.  We have also introduced upselling which enables customers to
upgrade their travel package online and see what they are paying for.  They will
also, by Christmas, be able to change or refund their bookings online.'

Martin Broughton, British Airways' chairman, said: 'Market conditions have
remained broadly unchanged since our last report.  All market segments remain
price sensitive and yield declines are expected to continue.  The total revenue
outlook for the year to March 2005 is unchanged with a 2-3 per cent improvement
driven by volume increases.

'Fuel costs net of hedging are now expected to be some £245 million more than
last year (up £20 million from our last estimate).  Passenger and cargo fuel
surcharges forecast at £160 million for this year partially offset this
increase.  Consequently, our focus will remain on reducing both controllable
costs and debt.'

Group turnover for the second quarter was £2,026 million (2003: £1,983 million),
2.2 per cent up on a flying programme 3.1 per cent up, measured in available
tonne kilometres (ATKs).  Traffic volumes, measured in revenue passenger
kilometres (RPKs), were up 4.4 per cent. Seat factor was up 2.0 points at 78.5
per cent on capacity 1.8 per cent higher in available seat kilometres (ASKs).

Operating cashflow for the six months was £598 million (2003: £520 million).
After disposal proceeds, capital expenditure and interest, cash inflow was £868
million (2003: £367 million).  Net debt was £3,286 million, down by £872 million
since the start of the year, its lowest level since 1993.

Unit costs improved by 6.1 per cent on the same period last year.  This reflects
a net cost reduction of 3.2 per cent on capacity 3.1 per cent higher in ATKs.

Fuel costs increased by 12.4 per cent (2003: up 21.1 per cent) and employee
costs increased by 7.7 per cent (2003: up 1.0 per cent) as wage awards and
increased pension contributions were only partially offset by manpower
reductions.  All other categories of operating costs were down, with selling
costs, in particular, down 17.6 per cent (2003: down 22.3 per cent).

November 8, 2004

                                  KG/111/04

British Airways' presentation to city analysts can be accessed via the internet
www.bashares.com at 9am.  A webcast of British Airways' conference call to city
analysts can also be accessed via the internet www.bashares.com at 2pm.

Certain statements included in this statement may be forward-looking and may
involve 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 business and financing plans, expected future revenues and
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. Fuller information on
some of the factors which could result in a material difference is available in
the company's Annual Report and Accounts for the year ended March 31, 2004 which
is available on www.bashareholders.com.


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            The company news service from the London Stock Exchange