The BA EMU Project

1
(No Transcript)
2
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 Companys 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 Companys
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
Companys SEC filings, including, without
limitation the Companys Report on Form 20-F for
the year ended March 2004.
3

• BRITISH AIRWAYS
• 2nd Quarter Interim Results
• 2004/05

8th November 2004
4
Martin Broughton Chairman
5
(No Transcript)
6
John Rishton Chief Financial Officer
7
Headline numbers
Period ended September 30, 2004
3 MONTHS m
VLY
VLY
6 MONTHS m
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 8
78 24.5 Pre-tax profit 220 nm 335 nm
8
Cost performance offset fuel increase
m
Operating profit increase
Revenue
Cost performance
Fuel spend
32
45
43
(30)
9
Revenue up . slightly

10
Passenger yield p/RPK remains weak
Yield per RPK vly

11
Yield analysis
VLY
Price (1.8) Mix 0.1 Exchange (3.4) (5.1)
12
More seats filled
Passenger seat factor vly
age points
13
Quarter 2 costs

• Capacity up 3.1
• Net costs down 3.2
• Unit costs reduced by 6.1

14
Net costs down 3.2
Employee costs 561 7.7 up Handling,
catering etc 238 4.8 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
m
vly
15
Cost performance
Cost reduction vly

Net costs
Unit costs
16
Fuel prices continue to rise
17
Strong fuel hedging positionthis year
Hedging cover
Average cap (Brent equivalent)
Nov Mar 05 75 32
18
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


19
Fuel surcharges - 160m this year
Effective 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
20
Cashflow before financing
m
868
738
495
367
348
214
54
Half year ended 30 September
21
Liquidity remains strong
Sept 2004
bn

• Cash 1.9 Facilities 0.4
• Total liquidity 2.3

22
Net debt 3.3bn lower
m
3.3bn
Dec 01
Mar 02
Jun 02
Sep 02
Dec 02
Mar 03
Jun 03
Sep 03
Dec 03
Mar 04
Sep 01
Jun 04
Sep 04
23
Early debt repayment
Q2
Half year
Scheduled 138 247 Early 225 366 Total 363 613
24
Debt repayments fall
December 2001 repayment profile
m equivalent
Current repayment profile
Year ended March 31
25
Gearing down from March

26
In summary
Steady progress
27
(No Transcript)
28
Rod Eddington Chief Executive Officer
29
What we have said

• Fix the business
• Fix the balance sheet

30
Steady progress

• Procurement 300 million
• ceBA and other 150 million
• Employee costs 300 million
• Balance sheet Reduce debt

31
Procurement delivering 300m

• Price
• Demand control
• Specification
• . . . . a step change in company behaviour

32
ceBA delivering 100 million

• ba.com
• on line booking
• manage my booking
• up selling
• boarding passes
• Executive Club
• e-ticket
• Self service check-in

33
Achievements ba.com bookings up
80
Weekly online bookings (in '000s)
70
60
50
40
30
20
10
monthly average online bookings are up 26
against last year
0
O-02
J-03
F-03
M-03
A-03
M-03
J-03
J-03
A-03
S-03
O-03
J-04
F-04
M-04
A-04
M-04
J-04
J-04
A-04
S-04
N-02
D-02
D-02
N-03
D-03
D-03
34
Shorthaul leisure distribution
Other direct 6
Other direct 9
contactBA 3
contactBA 17
Trade 38
Trade 54
ba.com 53
ba.com 20
April 2002
September 2004
35
Its clear what you have bought. Buying upgrades
is easy
36
Do it online - save time at the airport
Book seat Book meal FFP number Check-in Itinerary
Book hotel API ALL ON LINE
37
Print your own boarding pass for over 31
european airports
I can travel with my home printed boarding pass
from London City - the first airport in England
38
Executive Club
80
Executive Club Self Service usage
70
70
60
50
actual
40
target
forecast
30
Jun
Jul
Aug
Sep
Oct
Nov
Dec
Jan
Feb
Mar
Apr
May
Jun
Jul
Aug
Sep
Oct
Nov
Dec
Jan
Feb
Mar
03
03
03
03
03
03
03
04
04
04
04
04
04
04
04
04
04
04
04
05
05
05
39
ba.com bookings servicing
30
Bookings
25
APIS
Manage My Booking
20
15
Pax Using ba.com Pre-Departure
10
5
0
Jun 01
Aug 01
Oct 01
Jan 02
Mar 02
May 02
Aug 02
Oct 02
Dec 02
Mar 03
May 03
Jul 03
Sep 03
Dec 03
Feb 04
Apr 04
Jul 04
Sep 04
40
e-ticket take up

41
Self service check-in
20.0
18.9
SSK Check-ins
18.0
OL Check-ins
Total Self Service actual
16.0
14.0
14.5
12.0
of total check-in transactions
10.0
8.0
6.0
4.4
4.0
2.0
0.0
Mar
Apr
May
Jun
Jul 03
Aug
Sep
Oct
Nov
Dec
Jan
Feb
Mar
Apr
May
Jun
Jul 04
Aug
Sep
03
03
03
03
03
03
03
03
03
04
04
04
04
04
04
04
04
42
Transformational 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

43
Employee costsdelivering 300 million

• Some progress
• Delayed by pay deal
• 2 years clear air
• Changes to working practices

44
Balance sheet

• Operating business
• Capital expenditure
• Disposals

45
Balance sheet
In 3 years

• 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

46

• Steady progress
• No quick fixes

47
2004/5 revenue outlook unchanged

• Capacity up 2-3
• Seat factor up
• Yield down
• Revenue up 2-3

48
Cost headwinds remain

• Cost headwinds
• Pensions
• Pay
• Fuel
• Volume related costs
• Landing charges
• Cost initiatives
• Procurement
• ceBA
• Employee costs

49
October traffic statistics

• ASKs 0.1
• RPKs 1.8
• Seat factor 1.2
• Premium 0.8

50
Summary

• Steady progress
• Business initiatives continue
• Outlook challenging
• 10 remains our goal

51
(No Transcript)
52
Questions
53
(No Transcript)
54
(No Transcript)