Internet Strategy Unveiled

British Airways PLC
23 February 2000

   BRITISH AIRWAYS UNVEILS INTERNET STRATEGY

   The World's Favourite eAirline to invest £100m in
   major on-line ventures
   
   British Airways is to invest £100 million over the
   next two years in three major new on-line ventures, as
   part of its comprehensive internet strategy unveiled
   today.
   
   The new businesses, grouped together as the airline's
   eVentures, will include an on-line travel agency
   offering customers a one-stop-shop for flights,
   hotels, car hire and other travel services. The site
   will be owned by a group of European airlines and will
   enable them to offer Europe's best consumer travel
   site while cutting the cost of selling and
   distributing tickets.
   
   In the second venture, the leading loyalty programme
   Air Miles, which is wholly owned by British Airways,
   will significantly expand its on-line activities. Air
   Miles will seek to become the UK's leading e-currency
   and its 6.5 million members will benefit from earning
   Air Miles on-line as well as new redemption
   opportunities.
   
   British Airways will also invest in a new 'lifestyle
   portal' designed to meet the broad e-commerce needs of
   the airline's core customers. The portal will be run
   as a joint venture with a major online media company
   and a technology partner, and will be operational by
   the summer.
   
   Bob Ayling, British Airways Chief Executive, said:
   'British Airways' huge customer base, its Air Miles
   loyalty programme and its resources make it an
   attractive strategic partner for a wide range of
   companies. Through these eVentures, we will look to
   exploit the best of British Airways with the best
   outside partnerships to add value for our
   shareholders.'
   
   eVentures is one of four key areas in the airline's
   internet strategy designed to exploit to the full the
   new ways of business made possible by the internet, to
   cut costs by hundreds of millions of pounds a year,
   while improving service standards and consumer choice.

  The second area, eCommerce, will continue to move on-
  line the core commercial activities of sales,
  marketing and customer service. This will
  significantly reduce distribution costs, give
  consumers more choice in how they book and pay for
  flights, and eradicate much of the 'on-the-ground'
  hassle involved in air travel.
                 
Currently fewer than two per cent of the airline's
tickets are sold on-line. The aim is to increase this
to 50 per cent by the end of 2003.  Revenue generated
on-line is expected to rise from the current £45
million a year to £700 million within two years. Latest
technology will enable customers to find out through
the internet or even the latest generation mobile
phones whether their flight is departing on time, check-
in on-line or book car rental and hotel in a single on-
line transaction.

The revolutionary products and services will be delivered
to market by a new eCommerce unit, announced today,
which pulls together skills from across British Airways
into a single dedicated entity.

The team, based at the company's Waterside headquarters
near Heathrow, will act as high-speed incubators,
developing new on-line products and relationships.

eProcurement will take full advantage of the latest,
internet-based buying techniques, including auction-
style tendering.  The target is to increase the level
of on-line purchasing in the UK from the current 25 per
cent to 80 per cent by March 2002, saving more than
£175 million on the airline's current £3.7 billion a
year purchasing spend.

eWorking will transform the way the company carries out
its business internally.  By March 2001, every employee
will have access to the intranet at work, a quarter of
all training will be carried out on-line and 50 per
cent of recruitment will be carried out through the
web.

Bob Ayling said: 'Our internet strategy is all about
making it easier for our customers to do business with
us, freeing our own people to add most value where they
can really make a difference, and generating
substantial extra benefits for our shareholders.
British Airways has a great tradition of innovation. We
are now going to break the mould again, by establishing
British Airways firmly as the world's favourite
eAirline.'

February 23, 2000
19/SLJ/00

 Notes to editors:

1 British Airways already sells tickets on-line in 92
countries, with its website - www.britishairways.com -
attracting more than 2.7 million visitors per month.

2   The core eCommerce team will be appointed during
March with full operation starting from the new
financial year on 5 April 2000.