Interim Results - Part 1

British Airways PLC
04 November 2005



REASONABLE RESULTS IN Q2

     
•    Pre-tax profit of £241 million

•    Operating profit of £261 million

•    Revenue up 8.2 per cent

•    Unit costs up 2.2 per cent

•    Fuel costs up 51.3 per cent

•    Net debt down at £2.4 billion


British Airways today announced a pre-tax profit of £241 million (2004: £293
million) for the three months ended September 30, 2005.  The 2004 result
benefited by £86 million from the sale of shares in Qantas.  The three month
pre-tax figures took the result for the half-year to £365 million profit (2004:
£368 million).

Operating profit for the quarter was £261 million (2004: £245 million).  The
operating margin was 11.8 per cent (2004: 12 per cent).  Yields in the second
quarter were up 1.3 per cent (2004: 5.1 per cent down).  The operating profit
for the half-year was £437 million (2004: £374 million) giving an operating
margin of 10.2 per cent (0.7 points up).

The cost of the Gate Gourmet dispute and the associated unlawful industrial
action is estimated at between £35-£45 million. This does not have a material
impact on the quarterly financial comparisons as the airline also suffered
operational disruption in the same period of last year.

The board has decided that no interim dividend should be paid.

Willie Walsh, British Airways' chief executive, said: 'This is a reasonable set
of results driven by improvements in revenue, seat factor and yield.  It is
clear, however, that we need to re-energise our drive on controllable costs.  We
have demonstrated time and again that it is possible to offer world-class
service while improving unit costs.'

'Costs are up in most areas.  Fuel was the biggest single contributor, up a
staggering 51.3 per cent.

'We must ensure a successful move to Heathrow Terminal 5 in 2008 and redouble
our efforts to make British Airways more focused and better able to serve all of
our customers.'

Martin Broughton, British Airways' chairman, said: 'Continued capacity restraint
by the industry is resulting in a more stable price environment.  This, coupled
with good demand for premium traffic, in particular the growth in leisure
premium, has delivered a small yield improvement.  Assuming continued stable
economies and a rational capacity environment, some yield improvement is now
expected for this financial year.  Consequently, revenue is now expected to grow
by between 6 - 7 per cent, up 0.5 points from our previous guidance.'


                                      more
                                                       Reasonable results Q2../2


Mr Broughton added: 'Despite the improved revenue outlook, market conditions
remain broadly unchanged as significant promotional activity is required to
maintain seat factors.

'Fuel costs continue to be a challenge for the industry, but our guidance is
unchanged with total fuel costs expected to be up by £525 million this year.'

Group turnover for the second quarter was £2,205 million (2004: £2,038 million),
8.2 per cent up on a flying programme 2.4 per cent up, measured in available
tonne kilometres (ATKs).  Traffic volumes, measured in revenue passenger
kilometres (RPKs), were up 3.7 per cent.  Seat factor was up 1.1 points at 79.6
per cent on capacity 2.2 per cent higher in available seat kilometres (ASKs).

Unit costs increased by 2.2 per cent on the same period last year.  This
reflects a net cost increase of 4.7 per cent on capacity 2.4 per cent higher in
ATKs.

Fuel costs increased by 51.3 per cent due to the increase in fuel prices, net of
hedging.  Employee costs were up 3.3 per cent.  The increases were partially
offset by continued reductions in selling costs.

Operating cashflow for the six months was £530 million (2004: £484 million).
Including current interest bearing deposits, the cash position at September 30,
2005 was £1,925 million, up £243 million compared with March 31, 2005.  Net debt
was £2,417 million, down by £505 million since the start of the year.


                                      ends


November 4, 2005                                                       122/KG/05


Note to Editors
     
•    For all periods up to and including March 2005, British Airways has
     previously prepared its Group financial statements under UK Generally 
     Accepted Accounting Practice (UK GAAP).

•    British Airways restated its 2004/05 accounts to International Financial 
     Reporting Standards (IFRS).  The restated accounts were published on July 
     4, 2005. All comparators referred to are based on these restated accounts.

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, 2005 which
is available on www.bashareholders.com.

The estimated disruption cost reflects the direct cost of the disruption and the
estimated revenue impacts, both direct and indirect.  The estimate of £35 - £45
million is based on assumptions the company considers reasonable, but are
judgemental.



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