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, 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 publicity update or revised any forward-looking statement, whether as a result of new information, future events or otherwise.

It is not reasonably possible to itemize 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 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 2004.

BRITISH AIRWAYS

2nd Quarter & Interim Results

2004/05

BRITISH AIRWAYS

2nd Quarter & Interim Results

2004/05

8th November 20048th November 2004

Martin BroughtonChairman

Martin BroughtonChairman

John RishtonChief Financial Officer

John RishtonChief Financial Officer

Headline numbersHeadline numbers

Turnover 2,026 2.2% 3,951 3.6%

Operating profit 240 23.1% 390 66.0%

Operating margin 11.8 2.0pts 9.9 3.7pts

EBITDAR 506 15.8% 878 24.5%

Pre-tax profit 220 nm 335 nm

Turnover 2,026 2.2% 3,951 3.6%

Operating profit 240 23.1% 390 66.0%

Operating margin 11.8 2.0pts 9.9 3.7pts

EBITDAR 506 15.8% 878 24.5%

Pre-tax profit 220 nm 335 nm

Period ended September 30, 2004Period ended September 30, 2004

3 MONTHS £m

3 MONTHS £m

VLY

VLY

VLY

VLY

6 MONTHS

£m

6 MONTHS

£m

Cost performance offset fuel increase

Cost performance offset fuel increase

(50)

(40)

(30)

(20)

(10)

0

10

20

30

40

50

£m Operating profit

increase

Operating profit

increase

4545

RevenueRevenue

(30)(30)

Cost performa

nce

Cost performa

nce

323243

Fuel spend

Revenue up …. slightlyRevenue up …. slightly

(11)

(7)

1

(14)

(8)

(11)

(6)

2

11

(2)

5

2

-20

-15

-10

-5

0

5

10

15

Q1 Q2 Q3 Q4 FYR Q1 Q2 Q3 Q4 FYR Q1 Q2

%%

2002/032002/03 2003/042003/04 2004/052004/05

Passenger yield p/RPK remains weak

Passenger yield p/RPK remains weak

%% Yield per RPK vlyYield per RPK vly

5.0

1.2

(4.5)

(7.4)

(1.3)

(12.7)

(5.9)

(0.8)

3.9

(4.3) (4.5)(5.1)

-15

-10

-5

0

5

10

Q1 Q2 Q3 Q4 FYR Q1 Q2 Q3 Q4 FYR Q1 Q2

2003/042003/04 2004/052004/052002/032002/03

Yield analysisYield analysis

Price (1.8)

Mix 0.1

Exchange (3.4)

(5.1)

% VLY

More seats filledMore seats filledPassenger seat factor vlyPassenger seat factor vly

0.6

2.8

5.7

(2.6)

1.5 1.3

(0.2)

1.81.3 1.1

3.1

2.0

-5

-3

-1

1

3

5

7

Q1 Q2 Q3 Q4 FYR Q1 Q2 Q3 Q4 FYR Q1 Q2

% age

points

% age

points

2002/032002/03 2003/042003/04 2004/052004/05

Quarter 2 costsQuarter 2 costs

• Capacity up 3.1%

• Net costs down 3.2%

• Unit costs reduced by

6.1%

• Capacity up 3.1%

• Net costs down 3.2%

• Unit costs reduced by

6.1%

Employee costs 5617.7% up

Handling, catering etc 2384.8% down

Selling costs 126 17.6% down

Engineering 118 6.3% down

Fuel & oil 271 12.4% up

Other 269 22.0% down

NET OPERATING COST 1,583 3.2% down

Employee costs 5617.7% up

Handling, catering etc 2384.8% down

Selling costs 126 17.6% down

Engineering 118 6.3% down

Fuel & oil 271 12.4% up

Other 269 22.0% down

NET OPERATING COST 1,583 3.2% down

Net costs down 3.2%Net costs down 3.2%£m£m vlyvly

Cost performanceCost performanceCost reduction vlyCost reduction vly

14.6

2.6

14.3

6.1

10.8

9.4

7.3

4.55.4

4.5

2.8

4.4

2.9

5.4

2.5

8.6

3.4

9.1

3.2

6.1

0

2

4

6

8

10

12

14

16

Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2

%

Net costs Unit costs

2003/042003/042002/032002/03 2004/052004/05

Fuel prices continue to riseFuel prices continue to rise

Strong fuel hedging positionthis year

Strong fuel hedging positionthis year

Nov – Mar ’05 75% $32

Hedging cover Average cap(Brent equivalent)

Strong fuel hedging positionnext year

Strong fuel hedging positionnext year

Hedging cover Average cap (Brent

equivalent)

Apr – Jun 05 50% $34

Jul – Sept 05 45% $35

Oct – Dec 05 45% $35

Fuel surcharges - £160m this year

Fuel surcharges - £160m this yearEffective 13/5/04 £2.50 flat charge per

LH and SH sector

Effective 11/8/04 LH sector charge increased to £6

Effective 14/10/04 LH sector charge increased to £10

SH sector charge increased to £4

Plus Cargo fuel surcharges

£50m

£20m

£20m

£70m

Cashflow before financingCashflow before financing

0

200

400

600

800

1,000

1998 1999 2000 2001 2002 2003 2004

Half year ended 30 SeptemberHalf year ended 30 September

£m£m

214

348

495

54

738

367

868

Liquidity remains strongLiquidity remains strong

Cash 1.9

Facilities 0.4

Total liquidity 2.3

Sept 2004Sept 2004

£bn£bn

Net debt £3.3bn lowerNet debt £3.3bn lower

6,562

3,286

2,000

3,000

4,000

5,000

6,000

7,000

Dec01

Mar02

Jun02

Sep02

Dec02

Mar03

£m£m

£3.3bn

£3.3bn

Jun03

Sep03

Dec03

Mar04

Sep01

Jun04

Sep04

Early debt repaymentEarly debt repayment

Scheduled 138 247

Early 225 366

Total 363 613

Q2 Half year

Debt repayments fallDebt repayments fall

Current repayment profile Current repayment profile

Year ended March 31Year ended March 31

£m equivalent£m equivalent December 2001 repayment profile December 2001 repayment profile

474 511 481 473554

385

200

300

400

500

600

700

2006 2007 2008 2009 2010 2011

%%

Gearing down from MarchGearing down from March

2003/042003/04 2004/052004/05

In summaryIn summary

Steady progress

Rod EddingtonChief Executive Officer

Rod EddingtonChief Executive Officer

What we have saidWhat we have said

• Fix the business

• Fix the balance sheet

• Fix the business

• Fix the balance sheet

Steady progressSteady progress

• Procurement £300 million

• ceBA and other £150 million

• Employee costs £300 million

• Balance sheet Reduce debt

• Procurement £300 million

• ceBA and other £150 million

• Employee costs £300 million

• Balance sheet Reduce debt

Procurement delivering £300mProcurement delivering £300m

• Price

• Demand control

• Specification

. . . . a step change in company behaviour

• Price

• Demand control

• Specification

. . . . a step change in company behaviour

ceBA delivering £100 millionceBA delivering £100 million

• ba.com–on line booking

–manage my booking

–up selling

–boarding passes

–Executive Club

• e-ticket

• Self service check-in

• ba.com–on line booking

–manage my booking

–up selling

–boarding passes

–Executive Club

• e-ticket

• Self service check-in

Achievements: ba.com bookings up

Achievements: ba.com bookings up

Weekly online bookings (in '000s)

0

10

20

30

40

50

60

70

80

O-02

N-02

D-02

D-02

J-03

F-03

M-0

3A-0

3M-0

3J-0

3J-0

3A-0

3S-

03O-0

3N-0

3D-0

3D-0

3J-0

4F-

04M-0

4A-0

4M-0

4J-0

4J-0

4A-0

4S-

04

monthly average online bookings are up 26% against last year

Shorthaul leisure distributionShorthaul leisure distribution

Trade

54%ba.com 20%

contactBA 17%

Other direct 9%

Other direct 9%

April 2002April 2002

Trade

38%ba.co

m 53%

contactBA 3%

contactBA 3%

Other direct 6%

Other direct 6%

September 2004September 2004

It’s clear what you have bought. Buying upgrades is easy

It’s clear what you have bought. Buying upgrades is easy

Do it online - save time at the airport

Do it online - save time at the airport

Book seatBook mealFFP numberCheck-inItineraryBook hotelAPI ALL ON LINE

I can travel with my home printed boarding pass from London City - the first airport in England

Print your own boarding pass for over

31 european airports

Print your own boarding pass for over

31 european airports

Executive ClubExecutive Club

Executive Club Self Service usage

30%

40%

50%

60%

70%

80%

Jun03

Jul03

Aug03

Sep03

Oct03

Nov03

Dec03

Jan04

Feb04

Mar04

Apr04

May04

Jun04

Jul04

Aug04

Sep04

Oct04

Nov04

Dec04

Jan05

Feb05

Mar05

actualtargetforecast

70%

ba.com bookings + servicingba.com bookings + servicing

Jun01

Aug01

Oct01

Jan02

Mar02

May02

Aug02

Oct02

Dec02

Mar03

May03

Jul03

Sep03

Dec03

Feb04

Apr04

Jul04

Sep04

0%

5%

10%

15%

20%

25%

30%

Pax U

sin

g b

a.c

om

Pre

-D

ep

art

ure

Bookings

APIS

Manage My Booking

e-ticket take upe-ticket take up%

Self service check-inSelf service check-in

14.5%

4.4%

18.9%

0.0%

2.0%

4.0%

6.0%

8.0%

10.0%

12.0%

14.0%

16.0%

18.0%

20.0%

Mar03

Apr03

May03

Jun03

Jul03

Aug03

Sep03

Oct03

Nov03

Dec03

Jan04

Feb04

Mar04

Apr04

May04

Jun04

Jul04

Aug04

Sep04

% o

f to

tal ch

eck-i

n t

ran

sacti

on

s SSK Check-ins

OL Check-ins

Total Self Service actual

Transformational targetsTransformational targets

• 100% e-ticket usage

• 50% Self-service check-in (on and off airport)

• 80% core Exec Club interactions self-service

• 35% visit ba.com before they fly

• 45% email address capture

• 60% pre airport APIS data collection

• 100% e-ticket usage

• 50% Self-service check-in (on and off airport)

• 80% core Exec Club interactions self-service

• 35% visit ba.com before they fly

• 45% email address capture

• 60% pre airport APIS data collection

Employee costsdelivering £300 million

Employee costsdelivering £300 million

• Some progress

• Delayed by pay deal

• 2 years clear air

• Changes to working practices

• Some progress

• Delayed by pay deal

• 2 years clear air

• Changes to working practices

Balance sheetBalance sheet

• Operating business

• Capital expenditure

• Disposals

• Operating business

• Capital expenditure

• Disposals

Balance sheetBalance sheet

• Net debt down by £3.3 billion

• Early debt repayment £710 million

• Cash flow up £2.3 billion

• Capital expenditure Reduced

• Disposals £1.4 billion

• Unencumbered aircraft from 13 to 59

In 3 yearsIn 3 years

Steady progress

No quick fixes

Steady progress

No quick fixes

2004/5 revenue outlook unchanged

2004/5 revenue outlook unchanged

• Capacity up 2-3%

• Seat factor up

• Yield down

• Revenue up 2-3%

• Capacity up 2-3%

• Seat factor up

• Yield down

• Revenue up 2-3%

Cost headwinds remainCost headwinds remain

• Cost headwinds– Pensions– Pay– Fuel– Volume related

costs– Landing charges

• Cost initiatives– Procurement– ceBA– Employee costs

• Cost headwinds– Pensions– Pay– Fuel– Volume related

costs– Landing charges

• Cost initiatives– Procurement– ceBA– Employee costs

October traffic statisticsOctober traffic statistics

• ASKs +0.1%

• RPKs +1.8%

• Seat factor +1.2%

• Premium +0.8%

• ASKs +0.1%

• RPKs +1.8%

• Seat factor +1.2%

• Premium +0.8%

SummarySummary

• Steady progress

• Business initiatives

continue

• Outlook challenging

• 10% remains our goal

• Steady progress

• Business initiatives

continue

• Outlook challenging

• 10% remains our goal

Questions