Gatwick Restructuring

British Airways PLC
6 December 2000


PLANS FOR RESTRUCTURING GATWICK ANNOUNCED

London, Wednesday, December 6, 2000: British Airways today
announces the results of its Gatwick review.   The overall aims
are to improve profitability and ensure the group, as Gatwick's
leading operator, has a viable long-term future at the airport,
providing customers, particularly in the Gatwick catchment
area, with services designed more specifically around their
needs.

Today's announcement builds on the company's established
network and fleet strategies.   It follows changes already
announced for introduction next year.  The measures announced
today will be implemented over the next two years.

It marks a shift from previous attempts to build Gatwick as a
transfer hub, competing with Heathrow and other hubs in Europe.
Key elements include:

-    Significantly reducing longhaul operations
   -    The current 43 longhaul destinations will be reduced to
     around 25.  Services to half a dozen destinations with no
     prospect of achieving suitable levels of profitability will be
     suspended, and another ten or so destinations will transfer to
     Heathrow, where there are prospects for substantially improving
     their profitability.
   -    The remaining Gatwick longhaul routes will be served by a
     longhaul fleet rationalised from the current 33 Boeing 747s,
     777s and 767s, to around 20 Boeing 777s.
   
-    Refocussing Gatwick's shorthaul business
   -    The main emphasis will be on serving the needs of London
     and South East England, particularly the Gatwick catchment
     area, but while there will be less emphasis on providing
     transfer passenger feed to longhaul services, connections will
     still remain an important part of the Gatwick business.
   -    A small number of poorly performing shorthaul routes will
     go.
   -    Shorthaul aircraft movements at Gatwick are expected to
     remain substantially similar to today's levels, but improved
     utilisation will lead to some reduction from the current 56
     shorthaul aircraft.  Precise details are still to be finalised.
   
-    Introducing a simplified structure for the group's Gatwick
 activities
   -    To improve the group's operational flexibility and
     financial performance, the group intends to bring the
     operations and management of its two Gatwick shorthaul
     subsidiaries European Operations at Gatwick (EOG) and CityFlyer
     Express more closely together under the overall British Airways
     management structure.
   -    All British Airways services from Gatwick will operate
     under the British Airways brand name.
   
-    Consolidating operations at the North Terminal
   -    Subject to final agreement with Gatwick Airport Ltd,
     CityFlyer Express's activities will move from the South
     Terminal to sit alongside the rest of the group's activities at
     the North Terminal, in spring 2002.
   -    Freight and mail activities will be consolidated at
     British Airways' Gatwick Cargocentre.
                                                               
Added to other route, network, fleet, and product changes
already announced, the measures detailed  today bring the total
group capacity reduction by 2003 to around 20 per cent compared
with last year (1999-2000).

In terms of jobs, the effect of today's changes will be an
overall phased reduction of around a thousand across British
Airways'  63,000 group workforce over the next couple of years.
The group aims to achieve this through natural staff turnover
with, where this is insufficient, voluntary severance, early
retirement and transfer and retraining opportunities.

Announcing the new Gatwick plan today, Rod Eddington, British
Airways' Chief Executive, said: 'When I arrived at British
Airways I said the company had the right overall strategy - but
it did not go far enough fast enough.   We have made a number
of changes since then which are already bearing fruit.  Today
we detail our plans for improving our performance at Gatwick.

'Gatwick is a key airport in our home market, and our
activities there must operate on sound financial footing.
Despite the very best efforts of our team there, this has not
previously been possible to achieve.  The steps we are
announcing today should improve our group profitability and
ensure British Airways has a long-term viable future as
Gatwick's leading airline.

'While the end result will be a smaller British Airways
operation at Gatwick than today - although this will partially
be offset by expansion at Heathrow - Gatwick will remain
strategically crucial to the British Airways group.   The
airline will still be the biggest carrier at Gatwick, and
Gatwick will be by far British Airways' biggest base away from
Heathrow.'

Notes to editors:

The route and fleet changes will be phased in each flying
season.   For commercial reasons, details of what the changes
will mean for individual destinations will be finalised and
announced in line with the airline's usual timetable for
detailing seasonal schedule changes.

Longhaul

The first of the longhaul transfers announced today will be
Nairobi, Dar es Salaam and Seychelles, which will move from
Gatwick to Heathrow in October next year.

The Heathrow-based longhaul fleet will be increased to take
account of the route transfers.

Around two-thirds of the Gatwick 777s will operate in a three-
class configuration, offering Club World, World Traveller Plus
and World Traveller, on routes where First class demand is low.
The rest of this fleet will still offer First class.

Currently arrangements exist under which some of British
Airways' Gatwick longhaul leisure routes are flown by cabin
crews provided by JMC (under the 'AML' arrangement), operating
on three 777s with a higher density seating configuration than
the rest of the fleet.  Negotiations are proceeding with the
objective of allowing these arrangements to expire by summer
2002 after which all British Airways longhaul services will be
flown by crew on British Airways contracts, and these three
aircraft will be reconfigured to the standard British Airways
configuration.

Shorthaul

There are many shorthaul destinations which British Airways
cannot serve from Heathrow because of slot and other
infrastructure constraints.   The airline remains committed to
serving a broad range of shorthaul destinations and Gatwick has
a key role to play in offering customers quality services to
these destinations.

Some shorthaul destinations can support parallel British
Airways services from both Heathrow and Gatwick, but in future
schedules and capacity on these Gatwick-based routes will be
geared towards serving passengers for whom Gatwick is their
most convenient London airport.   The shorthaul network served
by British Airways group from Gatwick will be maintained at
broadly the same number of destinations as today - 53.

The airline has no plans to withdraw or reduce services to any
regional destination in the British Isles currently served from
Gatwick.  Gatwick will still offer great transfer connections
to and from these markets, catering for the vast majority of
the connection needs of these markets.

Although there will be less emphasis on connecting traffic, the
airline still expects to carry significant numbers of
passengers who will transfer at Gatwick, and will continue to
offer high quality services for passengers, particularly from
the UK regions, using the airport to make flight connections.

In line with the airline's previously announced fleet strategy,
capacity will be reduced by using smaller aircraft, with each
offering, on average, around 10 per cent fewer seats.  This
reflects the reduced volume of connecting passengers and should
improve load factors.

Bringing the operations and management of EOG and CityFlyer
Express more closely together is subject to reaching agreement
with the unions on cost levels for the new business.

Gatwick shorthaul services operated under the British Airways
brand by its franchisees BASE, Brymon, British Regional
Airlines, Deutsche BA  and GB Airways are unaffected by today's
announcements.


Capacity

The overall effect of these changes, added to steps already
announced or implemented, will be around a 10 per cent
reduction in shorthaul capacity at Gatwick.   The transfer of
destinations to Heathrow and route suspensions will mean a
large reduction in longhaul capacity at Gatwick, giving an
overall Gatwick network capacity reduction of 40 per cent in
summer 2003 against summer 1999.  With capacity measured in
available seat kilometres, the impact on actual passengers
numbers is expected to be substantially smaller.  Flying hours
will be reduced by around a quarter.  Aircraft movements will
be similar to today.

The move of more longhaul flying to Heathrow will increase
capacity there by a little more than 5 per cent.

Taken together, the result will be a trimming in overall
British Airways group capacity of 2 per cent, in addition to
capacity reductions already announced.


6 December, 2000                                   173/MJB/00