Mixed results

British Airways PLC
02 February 2007



MIXED RESULTS

•   Operating profit of £129 million (down £47 million)
•   Pre-tax profit of £113 million (down £53 million)
•   Operating margin at 6.2 per cent
•   Revenue from continuing operations up 0.5 per cent

British Airways today reported an operating profit of £129 million for the three
months to December 31, 2006 (2005: £176 million). For the nine months, the
operating profit was £571 million (2005: £596 million). The operating margin for
the quarter was 6.2 per cent, 2.4 points lower than last year.

Pre-tax profit for the quarter was £113 million (2005: £166 million).  For the
nine months, pre-tax profit was £584 million (2005: £518 million).  These
results have been restated to show the business on a continuing basis, excluding
BA Connect, following the decision to dispose of the regional business to Flybe.

Willie Walsh, British Airways' chief executive, said: 'These are mixed results
with costs up 3 per cent reflecting higher fuel costs and revenue up 0.5 per
cent to £2.1billion.

'Our drive on costs continues ahead of our move to Terminal 5.  Fuel remains a
significant burden with costs in the quarter up 11.2 per cent.  We remain
committed to achieving our cost reduction target of £450 million and a 10 per
cent operating margin by March 2008.

'Revenue has been hit by a raft of external factors.  These include the
continued impact of the August security measures. Common EU baggage standards on
liquids were not agreed until mid-way through the quarter and more restrictive
rules on hand baggage continue to apply in the UK.  As a result, transfer
volumes at Heathrow are still down.  The baggage system operated by the BAA at
Heathrow's Terminal 4, failed twice in December and severe fog led to the
cancellation of 800 flights in the pre-Christmas peak period.  The impact of all
these external factors in the quarter is estimated at £40 million.

'The patience and loyalty of our customers has been tested and I want to
apologise for the inconvenience they have suffered during this period.  The
uncertainty caused by the threat of recent industrial action has added to this
but we have reached an agreement with the cabin crew branch of the T&G over a
range of issues which I am confident forms the basis of a good relationship in
the future.  We are now re-focusing on customer service to win back the
confidence and trust of our customers.

'On pensions, we are delighted that the BA Forum, which represents British
Airways' unions, recently issued a statement recommending acceptance of the
changes in benefits to tackle the £2.1 billion deficit in the New Airways
Pension Scheme (NAPS).  This is a major milestone and we can now move forward on
our plans for fleet renewal and replacement.

'We are now flying our new Club World on four aircraft and the embodiment
programme is on schedule for completion by summer 2008.  Feedback from our
customers has been fantastic.  They love the extra comfort, space and
flexibility of the new flat bed and our greatly enhanced in-flight entertainment
system.'

Martin Broughton, British Airways' chairman, said: 'The market continues to show
good demand in premium cabins. The weakness in some non-premium segments is also
still a feature. The revenue outlook for the fourth quarter has been impacted by
the threat of industrial action. While the strike was averted, the estimated
revenue loss is still some £80 million. Revenue guidance for the full year is
now 3.25 - 3.75% growth.

'While cost control remains strong, full year costs excluding fuel are expected
to be some £50 million higher than last year.  This reflects higher costs in the
first quarter. Our full year fuel guidance has been revised down by £40 million
reflecting the reduction in fuel prices. The fuel bill will now be accounted for
on a continuing operations basis, and is expected to be some £1.95 billion.'

Group turnover for the third quarter at £2,068 million was up 0.5 per cent on a
flying programme 1.8 per cent smaller measured in available tonne kilometres
(ATKs).  Passenger yields were up 1.9 per cent, measured in pence per revenue
passenger kilometres (RPKs). Seat factor was down 0.5 points at 74 per cent on
capacity 0.8 per cent higher measured in available seat kilometres (ASKs).

For the nine month period, turnover improved by 6.5 per cent to £6,560 million
on a flying programme 1.5 per cent higher in ATKs.  Passenger yields were up 3.7
per cent with seat factor up 0.6 points at 77.6 per cent on capacity 3.3 per
cent higher in ASKs.

For the quarter, unit costs were up 4.9 per cent on the same period as last year
reflecting total costs up 3 per cent and capacity 1.8 per cent lower in ATKs.
Excluding fuel, unit costs were up 2.6 per cent.

Total costs were up, driven mainly by higher fuel and employee costs. Fuel costs
rose by 11.2 per cent due to the increase in fuel price net of hedging. Employee
costs were up by 2.0 per cent due mainly due to increased pension costs.

Operating cashflow for the nine months was £608 million.  Including current
interest bearing deposits, the cash position at December 31, 2006 was £2,643
million, up £203 million compared with March 31, 2006.  Net debt was £866
million, down by £775 million since the start of the year.

                                      ends

February 2, 2007                                                    010/KG/2007


Note to Editors

•   The current year and prior year results have been restated to reflect the 
    agreement in principle to dispose of the regional business of BA Connect to
    Flybe. There is an accounting requirement under IFRS 5 to reclassify the
    financial results between continuing and discontinued operations.

•   Full year restated comparisons for the year ended March 2006 are as follows:
    Revenue £8,213 million against £8,515 million, fuel £1,581 million against 
    £1,632 million and total costs £7,518 million against £7,810 million.

•   The British Airways Forum represents the airline's four unions: Amicus, 
    BALPA, GMB and T&G whose national officers consult with the company on
    airline-wide policies.  On 5th January after nine months consultation, the 
    BA Forum issued a statement  recommending acceptance of changes to future 
    benefits in the New Airways Pension Scheme.


A webcast of British Airways' conference call to city analysts can be accessed
via the internet www.bashares.com - on Friday, February 2 at 2pm.

Certain information included in these statements 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, discussions of
the company's Business Plan programmes, 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 2006.

The estimated impacts of the disruption in Quarter 3 and the averted strikes in
Quarter 4 reflect the direct costs of the measures and the estimated revenue
impacts, both direct and indirect. The estimates of £40 million and £80 million
respectively, are based on assumptions the company considers reasonable, but are
judgemental.


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