Strong Full Year Results

British Airways PLC
18 May 2007



STRONG FULL YEAR RESULTS IN CHALLENGING CONDITIONS


Financial highlights:
     
•    Revenue up 3.4 per cent to £8,492 million (2006: £8,213 million)

•    Operating profit £602 million despite fuel up £350 million (2006: £694
     million)

•    Pre-tax profit of £611 million (2006: £616 million)

•    Operating margin 7.1 per cent (2006: 8.5 per cent)

•    Provision of £350 million for competition investigation

•    Earnings per share 25.5 pence (2006: 40.4 pence)


Operational highlights:

•    Traffic volumes up 2.9 per cent

•    Seat factor flat at 76.1 per cent

•    Capacity up 2.9 per cent

•    Yield up 2.1 per cent

British Airways today (Friday May 18) reported an operating profit of £602
million for the year ending March 31, 2007 (2006: £694 million). The operating
margin was 7.1 per cent (2006: 8.5 per cent).  For the quarter, the operating
profit was £31 million (2006: £98 million) giving an operating margin of 1.6 per
cent.  The pre-tax profit was £611 million (2006: £616 million) for the year and
£27 million (2006: £98 million) for the quarter.

Group turnover for the year was £8,492 million (2006: £8,213 million), up 3.4
per cent on a flying programme up 0.7 per cent, measured in Available Tonne
Kilometres (ATKs). For the quarter, Group turnover was significantly impacted by
the threat of a strike and was down 5.9 per cent to £1,932 million, on a flying
programme 1.5 per cent lower in ATKs.

Operating cash flow for the year was £756 million (2006: £1,339 million).
Including current interest bearing deposits, the cash position at March 31,
2007, was £2,355 million, down £85 million compared with March 31, 2006.

Net debt was £991 million, a reduction of £650 million since the start of the
financial year. The second installment of £560 million from the company's £800
million cash injection was paid into the New Airways Pensions Scheme (NAPS) on
April 2, 2007. This reduced the cash balances immediately after the balance
sheet date to around £1,800 million.

Traffic volumes, measured in Revenue Passenger Kilometres (RPKs), were up 2.9
per cent for the year and down 1.3 per cent for the quarter. Seat factor was
flat for the year at 76.1 per cent on capacity 2.9 per cent higher in Available
Seat Kilometres (ASKs) and down 2.0 percentage points in the quarter to 71.4 per
cent. Yield measured in pence per RPK was up 2.1 per cent for the year and down
3.4 per cent for the quarter. Total costs, excluding one off items, were up 5.5
per cent, driven mainly by a 22 per cent increase in fuel costs to £1.93
billion. Non-fuel costs were up 1.1 per cent.

Cargo volumes for the year, measured in Cargo Tonne Kilometres (CTKs) were down
4.7 per cent compared with the prior year, with yields up 1.7 per cent. For the
quarter, cargo volumes were down 12.4 per cent compared to last year. Cargo
performance during the second half was impacted by operational and security
related issues.

The results include a £396 million credit as a result of a change to the New
Airways Pension Scheme (NAPS).

The investigations by the US Department of Justice, the European Commission and
the UK Office of Fair Trading and others into anti-competitive activity on long
haul passenger and cargo fuel surcharges are continuing. However, British
Airways has now responded to the subpoenas and other statutory requests for
information from these authorities.

British Airways has a long-standing, clear and comprehensive competition
compliance policy. This policy requires all staff to comply with the law at all
times. It has become apparent that there have been breaches of this policy in
relation to discussions about these surcharges with competitors. As a result, it
is now appropriate for the company to make a provision, under IAS 37, of £350
million in its full year accounts. The provision represents the best estimate of
the amount to settle all competition authority and civil claims at the Balance
Sheet date, but recognises that the final amount is subject to uncertainty.


Willie Walsh, British Airways' chief executive, said:

'These are strong results despite a challenging year.  We know at times it has
been a frustrating year for our customers, caused by disruption and overly
restrictive UK government security measures on hand baggage.

'We have taken steps to ensure the fundamentals of our business are strong,
laying the foundations to deliver our 10 per cent operating margin target by
March 2008. We have addressed the £2.1 billion pension deficit and disposed of
the loss-making regional business, BA Connect. Our total cost control has been
good, with non-fuel costs up just 1.1 per cent.

'We are on the threshold of a new era for our customers. Terminal 5 is only 313
days away and tickets for flights from T5 are now available for sale. Our new
Club World cabin is now on 96 services to New York's JFK airport and we will be
investing in a fantastic new First cabin. We have made progress on Gatwick,
particularly on costs, which has given us the confidence to renew our commitment
to Gatwick and upgrade its fleet. This is a step towards a single shorthaul
fleet.

'Earlier this year we ordered four new widebodied aircraft for delivery in 2009,
and we anticipate making a further major order for 34 replacement and additional
growth aircraft in the coming months.  Today we have announced an order for
eight Airbus A320 family aircraft for the shorthaul fleet.

'The 'open skies' air treaty agreed recently between the EU and the US has given
us some new and exciting opportunities.  We have filed an application with the
US DoT for permission to operate services between any point in the US and any
point in the EU to enable us to grow the most profitable part of our business.'

Martin Broughton, British Airways' chairman, said:

'We are pleased with the progress that Willie and his team have made on many
fronts this year despite all the challenges.

'In terms of current performance, we have seen some weakness in non-premium
segments notably on the North Atlantic. To some degree, complete visibility is
hampered by the ongoing baggage restrictions which impact all cabins but
particularly premium. Our revenue guidance of 5-6 per cent increase is unchanged
but we now expect to be at the lower of end of this range.
'Cost control remains a key focus and full year costs, excluding fuel, are still
expected to be some £50 million higher than the year just reported.

'Our goal to achieve a 10 per cent operating margin by March 2008 remains on
track, although year over year improvements are likely to be delivered
predominantly in the second half as we cycle against record results in the
period to August 10 last year.'

The Board has recommended that no final dividend be paid.


                                      ends

May 18, 2007
                                 111/KG/07


Note to Editors:
     
•    The provision in respect of competition investigations relates to potential 
     Government fines in the following jurisdictions in relation to cargo fuel 
     surcharges: USA, Europe, Australia, Canada, New Zealand and South Africa
     and, in relation to long haul passenger fuel surcharges: USA and the UK. It 
     also relates to civil claims in the USA, Australia and Canada. Under IAS 37 
     the provision represents the estimate of the amount to settle competition 
     authority and civil claims at the Balance Sheet date, but recognises that 
     the final amount required to pay all claims and fines is subject to 
     uncertainty.

•    Under IAS 19 accounting rules a change to the New Airways Pension Scheme 
     (NAPS), capping pensionable pay at RPI, resulted in a one-off credit to
     the P&L account.

•    See separate RNS statement on short haul aircraft order.

•    The current year and prior year results have been restated to reflect the 
     agreement 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.

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.

This document is the summary financial statement for the year ended March 31,
2007 of British Airways Plc, whose details are above. Certain statements
included in this edition of Investor 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, 2007, which is available on www.bashareholders.com.



                      This information is provided by RNS
            The company news service from the London Stock Exchange