3rd Quarter Results - Part 1

British Airways PLC
5 February 2001

PART 1

£125M IMPROVEMENT IN Q3 PROFITS

  * Q3 pre-tax profits of £65m compared with a loss a year ago
  * Operating result advances £82m in quarter and £232m in nine months
  * Yield continues to improve, up 8.3 per cent
  * Overall capacity reduced by 3.9 per cent
  * Excluding a 46 per cent rise in fuel costs and the impact of exchange
    rate changes, unit costs fell 3.1 per cent
  * Earnings per share were 5.4p, compared with a loss of 6.6p last year

London, Monday February 5, 2001: British Airways today reported pre-tax
profits for the nine months to December 31, 2000 of £215 million. Operating
profits for the nine months were £441 million, up 111 per cent on last year.
Group profits before tax for the three months to December 31 were £65 million,
£125m up on a year ago.

Passenger yield in the quarter continued to improve with an 8.3 per cent
year-on-year increase. Excluding a 46 per cent rise in fuel costs and exchange
rate movements, unit costs fell by 3.1 per cent despite the upward pressure of
a 3.9 per cent reduction in overall capacity. Operating profit in the quarter
rose to £80m.

These results reflect the reduction of unprofitable capacity and continued
cost efficiencies. Smaller aircraft, higher frequencies and a more profitable
mix of passengers have all contributed to the current performance. Continued
implementation of the fleet and network strategy will further cut capacity by
around 9 per cent next year. Key achievements in the quarter include:

  * Product: The new Club World and World Traveller Plus products are now
    available on many of the airline's longhaul routes. The First embodiment
    programme began in December. Full embodiment of all the new products on
    the longhaul fleet is due to be completed during 2002. The embodiment of
    Club Europe in the shorthaul fleet was completed early in the quarter.

  * Fleet: Delivery of more new, smaller aircraft for both the longhaul and
    shorthaul fleets continues. Deliveries of the longhaul aircraft are due to
    be completed in 2002 and the shorthaul aircraft in 2005.



  * Shorthaul: The review of operations at Gatwick has led to a shift from
    previous attempts to build Gatwick as a transfer hub and a refocusing of
    the operation over the next two years. The rationalisation of our
    shorthaul operations continues, with the integration of the management at
    CityFlyer Express and British Airways' European Operations at Gatwick.
    Discussions on the sale of Go, the no-frills shorthaul airline, have
    reached an advanced stage.

Rod Eddington, Chief Executive of British Airways, said: 'These numbers are
encouraging and reflect the continuing improvements in the business. In a
competitive marketplace, they show that we can continue to improve
profitability by focusing on our core activities and the right network.'

Lord Marshall, Chairman of British Airways, said: 'We are now two years into
refocusing the airline and the benefits are now beginning to come through to
the bottom line. The programme still has several years to run and will
continue to evolve. But the basic principle remains the same: we will maximise
shareholder value by focusing on profitable market sectors where our people
will continue to deliver the best customer service.'



For more information, please contact:

Nick Claydon     British Airways             0208 738 5176

James Hogan      Brunswick                   0207 404 5959

Louise Evans     British Airways             0208 738 5100

Sarah James      British Airways             0208 738 5100


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