Response to Iraq conflict

British Airways PLC
26 March 2003



RESPONSE TO IRAQ CONFLICT



London, Wednesday, March 26, 2003: British Airways today announced a package of
measures in response to the impact on its business of the conflict in Iraq.

Following the actual and anticipated downturn in passenger traffic, the airline
will implement a reduced flying programme and an acceleration of its Future Size
and Shape restructuring programme.

The measures include:

  • An overall capacity reduction of four per cent in April and May, involving
    reduced frequencies and the use of smaller aircraft.

  • The Future Size and Shape programme's overall manpower reduction target of
    13,000 by March 2004 will be accelerated to September this year.

  • An extension of the company's unpaid leave scheme for staff.

  • A review of all capital expenditure and external spend.

Chief executive Rod Eddington said today: 'There are clearly tough times ahead
and experience has shown us that conserving cash is critical at these times.

'We have had the opportunity to plan our response on this occasion and go into
this downturn a leaner, fitter company. Before today's adjustments to our flying
programme, we had already reduced our capacity by 20 per cent in the last two
years and reduced our manpower by 10,000.

'We are still assessing the impact on passenger demand but the industry has been
feeling the effects of war for some weeks now. However, we are in good shape
with more than £2 billion in cash and committed facilities available and we will
survive this conflict.

'We will continue to review our capacity and forward bookings on a regular
basis.'



March 26, 2003









Notes to editors:

  • The reduced flying programme on the North Atlantic will include the
    suspension until the end of May of one of seven London Heathrow-JFK New York
    daily return services; the cancellation of one of two daily London
    Heathrow-Chicago return services until April 8 and the delayed introduction
    of extra services to London Heathrow-Newark New York, London
    Heathrow-Toronto and London Gatwick-Houston. The changes represent a
    reduction of capacity on the North Atlantic of 6 per cent.

  • The reduced flying programme in the Middle East foresees the continued
    suspension of services to Kuwait in the short term and 10 services a week to
    Dubai reduced from a double-daily service. A daily service to Tel Aviv will
    recommence from Friday, March 28, following a temporary suspension of the
    double-daily service. The changes represent a 26 per cent reduction in
    capacity to the Middle East.

  • Manpower reductions since August 2001 totalled 9,740 as of February 28
    ,2003. The previous stated target of a 10,000 reduction by the end of this
    month will be achieved. The remaining 3,000 of the overall 13,000 target,
    originally to be achieved by March 2004, will be achieved by the end of
    September.



Certain information included in this statement 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 'Future Size and Shape' programme, 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 2002.




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