FORM 6-K

FORM 6-K

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

REPORT OF FOREIGN PRIVATE ISSUER

FURNISHED PURSUANT TO RULE 13a-16 OR 15d-16 UNDER

THE SECURITIES EXCHANGE ACT OF 1934

13 May 2005

BRITISH AIRWAYS Plc

(Registrant's Name)

Waterside HBA3,

PO Box 365

Harmondsworth UB7 0GB

United Kingdom

Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F.

Form 20-F X Form 40-F

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule101(b)(1)

Note: Regulation S-T Rule 101(b)(1) only permits the submission in paper of a Form 6-K if submitted solely to provide an attached annual report to security holders.

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7)

Note: Regulation S-T Rule 101(b)(7) only permits the submission in paper of a Form 6-K if submitted to furnish a report or other document that the registrant foreign private issuer must furnish and make public under the laws of the jurisdiction in which the registrant is incorporated, domiciled or legally organised (the registrant's "home country"), or under the rules of the home country exchange on which the registrant's securities are traded, as long as the report or other document is not a press release, is not required to be and has not been distributed to the registrant's security holders, and, if discussing a material event, has already been the subject of a Form 6-K submission or other Commission filing on EDGAR.

Indicate by check mark whether by furnishing the information contained in this Form, the registrant is also thereby furnishing the information to the Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934.

Yes No X

If "Yes" is marked, indicate below the file number assigned to the registrant in connection with Rule 12g3-2(b):


CONTENTS

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorised.

BRITISH AIRWAYS Plc

By: /s/_______________________________

Name: Alan Buchanan

Title: Company Secretary

Date 13 May 2005

INDEX TO EXHIBITS

Exhibit No.

Description

1.

PRELIMINARY FINANCIAL RESULTS 2004-2005


PRELIMINARY FINANCIAL RESULTS 2004-2005

Three months ended

Twelve months ended

March 31

Better/

March 31

Better/

2005

2004

(Worse)

2005

2004

(Worse)

Turnover

£m

1,889

1,854

1.9%

7,813

7,560

3.3%

Operating profit

£m

40

32

25.0%

540

405

33.3%

Operating margin

%

2.1

1.7

0.4pts

6.9

5.4

1.5pts

Profit before tax

£m

5

45

(88.9)%

415

230

80.4%

Retained profit for

the period

£m

9

12

(25.0)%

251

130

93.1%

Net assets at period end

£m

2,684

2,397

12.0%

2,684

2,397

12.0%

Earnings per share

Basic

p

0.9

1.1

(18.2)%

23.4

12.1

93.4%

Diluted

p

0.9

1.1

(18.2)%

23.0

12.1

90.1%

GROUP PROFIT AND LOSS ACCOUNT

Three months ended

Twelve months ended

March 31

Better/

March 31

Better/

2005 £m

2004 £m

(Worse)

2005 £m

2004 £m

(Worse)

Traffic Revenue*

Passenger

1,557

1,580

(1.5)%

6,500

6,490

0.2%

Cargo

112

113

(0.9)%

482

463

4.1%

1,669

1,693

(1.4)%

6,982

6,953

0.4%

Other revenue

220

161

36.6%

831

607

36.9%

TOTAL TURNOVER

1,889

1,854

1.9%

7,813

7,560

3.3%

Employee costs

608

595

(2.2)%

2,273

2,180

(4.3)%

Depreciation, amortisation and impairment

187

171

(9.4)%

687

679

(1.2)%
Aircraft operating lease

costs

25

43

41.9%

106

135

21.5%

Fuel and oil costs

269

228

(18.0)%

1,128

922

(22.3)%

Engineering and other

aircraft costs

149

134

(11.2)%

502

511

1.8%

Landing fees and en route

charges

130

129

(0.8)%

556

549

(1.3)%
Handling charges, catering and

other operating costs

227

215

(5.6)%

930

934

0.4%

Selling costs

114

118

3.4%

488

554

11.9%
Accommodation, ground equipment

costs and currency differences

140

189

25.9%

603

691

12.7%

TOTAL OPERATING EXPENDITURE

1,849

1,822

(1.5)%

7,273

7,155

(1.6)%

OPERATING PROFIT

40

32

25.0%

540

405

33.3%

Share of operating profits in associates

11

58

(81.0)%

41

58

(29.3)%

TOTAL OPERATING PROFIT

51

90

(43.3)%

581

463

25.5%

INCLUDING ASSOCIATES

Income and charges relating to

fixed asset investments

2

nm

3

nm

Profit/(loss) on sale of

fixed assets and investments

(13)

6

nm

(26)

(46)

43.5%

Interest

Net payable

(48)

(52)

7.7%

(190)

(216)

12.0%
Retranslation credits on currency

borrowings

7

1

nm

33

16

nm

Other finance income and related fees

6

nm

14

13

7.7%

PROFIT BEFORE TAX

5

45

(88.9)%

415

230

80.4%

Tax

9

(29)

nm

(149)

(85)

(75.3)%

PROFIT AFTER TAX

14

16

(12.5)%

266

145

83.4%

Equity minority interest

(1)

(1)

(1)

(1)

Non equity minority interest**

(4)

(3)

(33.3)%

(14)

(14)

PROFIT FOR THE PERIOD

9

12

(25.0)%

251

130

93.1%

RETAINED PROFIT FOR THE PERIOD

9

12

(25.0)%

251

130

93.1%

nm: Not meaningful

* Revenue in the prior year included £35 million relating to the release of prior year provisions.

** Cumulative Preferred Securities


OPERATING AND FINANCIAL STATISTICS

Three months ended

Twelve months ended

March 31

Increase/

March 31

Increase/

2005

2004

(Decrease)

2005

2004

(Decrease)

TOTAL AIRLINE OPERATIONS (Note 1)

TRAFFIC AND CAPACITY

RPK (m)

26,062

24,932

4.5%

107,892

103,092

4.7%

ASK (m)

35,677

35,232

1.3%

144,189

141,273

2.1%

Passenger load factor (%)

73.0

70.8

2.2pts

74.8

73.0

1.8pts

CTK (m)

1,214

1,148

5.7%

4,954

4,461

11.1%

RTK (m)

3,820

3,644

4.8%

15,731

14,771

6.5%

ATK (m)

5,598

5,510

1.6%

22,565

21,859

3.2%

Overall load factor (%)

68.2

66.1

2.1pts

69.7

67.6

2.1pts

Passengers carried (000)

8,178

8,142

0.4%

35,717

36,103

(1.1)%

Tonnes of cargo carried (000)

216

209

3.3%

877

796

10.2%

FINANCIAL

Passenger revenue per RPK (p)

5.97

6.34

(5.8)%

6.02

6.30

(4.4)%

Passenger revenue per ASK (p)

4.36

4.48

(2.7)%

4.51

4.59

(1.7)%

Cargo revenue per CTK (p)

9.23

9.84

(6.2)%

9.73

10.38

(6.3)%

Total traffic revenue per RTK (p)

43.69

46.46

(6.0)%

44.38

47.07

(5.7)%

Total traffic revenue per ATK (p)

29.81

30.73

(3.0)%

30.94

31.81

(2.7)%

Average fuel price before hedging

(US cents/US gallon)

143.88

105.30

36.6%

136.44

94.49

44.4%

OPERATIONS

Average Manpower Equivalent (MPE)

45,914

46,551

(1.4)%

46,065

47,605

(3.2)%

ATKs per MPE (000)

121.9

118.4

3.0%

489.9

459.2

6.7%

Aircraft in service at

period end

290

291

(1)

290

291

(1)

TOTAL GROUP OPERATIONS

FINANCIAL

Net operating expenditure

per RTK (p)

42.64

45.58

(6.5)%

40.95

44.33

(7.6)%

Net operating expenditure

per ATK (p)

29.10

30.15

(3.5)%

28.55

29.96

(4.7)%

Note 1: Excludes fuel surcharges and non airline activity companies, principally, Airmiles Travel Promotions Ltd, BA Holidays Ltd, BA Travel Shops Ltd, Speedbird Insurance Company Ltd and The London Eye Company Ltd.


Chairman's Statement

Group performance

Group profit before tax for the year was £415 million compared with £230 million in the previous year.

Operating profit in the year, at £540 million, was £135 million better than last year. The operating margin of 6.9% was 1.5 points better than last year. The improvement in operating profit primarily reflects improvements in turnover - up 3.3% - partially offset by increased operating costs, in particular fuel. Passenger yields (pence/RPK) for the year were down 4.4%; seat factor was up 1.8 points at 74.8% on capacity 2.1% higher in ASKs.

Cargo volumes (CTKs) for the full year were up 11.1% compared with last year, with yields down 6.3%. Overall load factor for the full year was up 2.1 points at 69.7%.

Cash inflow before financing was £1,181 million for the twelve months. The closing cash balance of £1,682 million was up £12 million versus last year. Net debt fell by £1,236 million during the year to £2,922 million. This is the lowest level since March 31, 1993, and is down £3.7 billion from the December 2001 peak.

Profit before tax for the fourth quarter was £5 million, £40 million lower than last year primarily due to the reduction in associate profits following the sale of the Qantas shareholding in September 2004. The operating profit for the quarter was £40 million, £8 million better than last year (which included £35 million of one-off revenue credits relating to systems and process improvements).

Group turnover for the quarter was up 1.9% compared with last year - at £1,889 million - on capacity 1.6% higher in ATKs. Yield (pence/RPK) was down by 5.8% and seat factor was up 2.2 points to 73.0%, a record for the fourth quarter.

For the quarter, cargo volumes were up 5.7% compared with last year, with overall load factor up 2.1 points at 68.2%, but yields (pence/CTK) down 6.2%.

Costs

For the twelve months, unit costs (pence/ATK) improved by 4.7% on the same period last year. This reflects a net cost reduction of 1.6% on capacity 3.2% higher in ATKs.

For the quarter, unit costs improved by 3.5% on the same period last year. This reflects a net cost reduction of 1.9% on capacity 1.6% higher in ATKs.

Operating expenditure increased in the quarter, primarily reflecting increases in employment costs (up 2.2% including the impact of the Employee Reward Plan, which triggered based on a full year operating margin target of 6%, including the cost of the scheme), fuel costs (up 18.0% due to increases in the fuel price net of hedging) and fleet depreciation (up 9.4% due to the write off associated with the planned retirement of the BAe 146 fleet). The cost increases were partially offset by reductions in aircraft operating lease costs (down 41.9% due to the non-repetition of costs incurred in the prior year relating to the British Airways CitiExpress ATP fleet withdrawal), accommodation and ground equipment costs (down 25.9% due to savings in rent, rates and utilities, as well as reduced IT spend and favourable exchange impacts) and favourable selling costs (down 3.4%).

Non-operating items

Net interest expense for the year was £190 million, £26 million lower than the previous year due to the impact of higher interest income and reduced debt. Retranslation of currency borrowings generated a credit of £33 million, including a £31 million credit due to the yen debt, compared to a credit the previous year of £16 million. The revaluation -- a non cash item required by standard accounting practice -- resulted from the weakening of the yen against sterling.

For the three month period net interest expense was £48 million, down £4 million on last year.

Losses on disposals of fixed assets and investments for the year were £26 million, primarily due to the sale of Qantas. This compares to losses of £46 million last year (which included the loss on disposal of dba of £83 million).

Losses on disposal for the quarter were £13 million, compared with profits of £6 million last year.

Other finance income and related fees were £14 million (compared with £13 million last year).

Earnings per share

For the twelve month period, profits attributable to shareholders were £251 million, equivalent to earnings of 23.4 pence per share, compared with earnings of 12.1 pence per share last year. The profit attributable to shareholders for the fourth quarter was equivalent to 0.9 pence per share, compared with earnings of 1.1 pence last year.

The Board has recommended that no dividend be paid.

Geographical analysis

Operating results improved in each area. For longhaul this reflected increased turnover partially offset by rising costs, in particular fuel. In Europe, losses continued to fall due to continued focus on cost reductions - the total loss of £26 million (£60 million last year) includes an impairment charge of £16 million due to the planned retirement of the BAe 146 fleet.

Net Debt / Total Capital ratio

The year-end net debt/total capital ratio was 42.7 per cent, an 11.4 point reduction from last year. The net debt/total capital ratio including operating leases was 48.2 per cent, a 10.2 point reduction from last year.

Pension Deficit

Under FRS 17, the pension deficit after deferred tax increased by £205 million to £1.4 billion (due mainly to lower long term interest rates), despite the doubling of company contributions to £250 million. The deficit is not consolidated into the accounts as we continue to report under SSAP 24. Next year, under International Financial Reporting Standards (IAS 19), the pension deficit will be included in the balance sheet - this will have a significant adverse impact on reserves (in particular distributable reserves).

Cash flow

Net cash inflow from operating activities totalled £1,192 million, up £99 million from last year. The net cash flow before management of liquid resources and financing was £1,181 million, an increase of £307 million from last year, primarily due to the sale proceeds of £427 million from Qantas.

Performance improvement programmes

Against a target of £450 million of savings announced in the 2003/5 Business Plan (including the £300 million of external spend savings) £457 million was realised. The £300 million employee cost savings announced in the 2004/6 Business Plan will be delivered by March 2007 through efficiencies, including working practice changes.

Aircraft fleet changes

The number of aircraft in service at March 31, 2005 was 290, a reduction of 1 on the prior year. Aircraft returns to lessors comprised two Boeing 737-400 aircraft and one de Havilland Canada DHC-8. In addition, a Boeing 737-400 aircraft was stood-down pending return to the lessor. An Airbus A320 was sub-leased to GB Airways and two Boeing 737-400 aircraft were sub-leased to Air One, an Italian carrier operating Italian domestic routes. Deliveries comprised six Airbus A321 aircraft.

British Airways CitiExpress

British Airways is continuing to simplify and strengthen its UK regional operation. During 2004/05 British Airways CitiExpress benefited from steps taken during the latter part of 2003/04 to reduce the number of aircraft, aircraft types and bases. In March 2005, British Airways CitiExpress announced that it would exit its fleet of five ageing BAe 146 aircraft during 2005/06. As a result of these changes, British Airways CitiExpress will operate a fleet of 52 aircraft and three types by March 2006, down from 92 aircraft and nine types in 2001. As a consequence of simplification, operational performance is more robust, costs have fallen and financial results have improved. Further cost reductions are targeted in 2005/06.


Alliance developments

The British Airways / Iberia Joint Business Agreement, covering flights between Heathrow and Madrid and Barcelona, was signed in December 2004. British Airways and Iberia began benefit sharing on these routes on January 1, 2005 and have announced improvements to the 2005 summer schedules.

On February 8, 2005, the Australian Competition and Consumer Commission (ACCC) issued a final determination re-authorising the British Airways and Qantas Joint Services Agreement for a further five year period from March 1, 2005.

International Financial Reporting Standards

British Airways will report consolidated financial statements for the year ending March 31, 2006, under International Financial Reporting Standards (IFRS). An IFRS convergence project team was established in 2003 and reports to the Audit Committee quarterly. Progress continues in accordance with the project plan, and the project is on track. IFRS-compliant information for the 2004/05 accounts will be communicated during July.

Outlook

Market conditions remain broadly unchanged. For the year to March 2006, total revenue is expected to improve by 4 - 5%, up from 3 - 4% due to the impact of the latest fuel surcharges. Capacity and volumes are expected to increase by about 3% with total yield flat.

Fuel costs, net of hedging, are now expected to be about £400 million more than last year (up from £300 million due to recent price rises).

As announced in our latest Business Plan, our focus is on preparing for the move to Terminal 5 in 2008, investing in products for our customers and continuing to drive simplification to deliver a competitive cost base.

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, discussions of the company's Business Plan programs, 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 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 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 2004.


GROUP BALANCE SHEET

March 31

2005 £m

2004 £m

Restated

FIXED ASSETS

Intangible assets

190

168

Tangible assets

8,152

8,637

Investments

150

531

8,492

9,336

CURRENT ASSETS

Stocks

84

76

Debtors

1,078

1,019

Cash, short-term loans and deposits

1,682

1,670

2,844

2,765

CREDITORS: AMOUNTS FALLING DUE

WITHIN ONE YEAR

Borrowings and other creditors

(2,868)

(2,996)

Convertible Capital Bonds 2005

(112)

(2,980)

(2,996)

NET CURRENT LIABILITIES

(136)

(231)

TOTAL ASSETS LESS CURRENT LIABILITIES

8,356

9,105

CREDITORS: AMOUNTS FALLING DUE AFTER MORE

THAN ONE YEAR

Borrowings and other creditors

(4,346)

(5,374)

Convertible Capital Bonds 2005

(112)

(4,346)

(5,486)

PROVISION FOR DEFERRED TAX

(1,243)

(1,137)

PROVISIONS FOR LIABILITIES AND CHARGES

(83)

(85)

2,684

2,397

CAPITAL AND RESERVES

Called up share capital

271

271

Reserves

2,194

1,916

2,465

2,187

MINORITY INTEREST

Equity minority interest

12

10

Non equity minority interest

207

200

219

210

2,684

2,397

STATEMENT OF TOTAL RECOGNISED GAINS AND LOSSES

Twelve months ended

March 31

2005 £m

2004 £m

Profit for the period

251

130

Other recognised gains and losses

relating to the period:
Exchange and other movements

(37)

16

Total recognised gains and losses

214

146

These summary financial statements were approved by the Directors on May 12, 2005.


GROUP CASH FLOW STATEMENT

Twelve months ended

March 31

2005 £m

2004 £m

CASH INFLOW FROM OPERATING ACTIVITIES

1,192

1,093

DIVIDENDS RECEIVED FROM ASSOCIATES

20

25

RETURNS ON INVESTMENTS AND SERVICING OF FINANCE

(170)

(209)

TAX

(4)

CAPITAL EXPENDITURE AND FINANCIAL INVESTMENT

(276)

42

ACQUISITIONS AND DISPOSALS

415

(73)

Cash inflow before management of liquid

1,181

874

resources and financing

MANAGEMENT OF LIQUID RESOURCES

(16)

(198)

FINANCING

(1,151)

(834)

Increase/(decrease) in cash in the period

14

(158)

NOTES TO THE ACCOUNTS

For the period ended March 31, 2005

1 ACCOUNTING CONVENTION

The accounts have been prepared on the basis of the accounting policies set out in the Report and Accounts for the year ended March 31, 2005 in accordance with all applicable United Kingdom accounting standards and the Companies Act 1985.

Effective from April 1, 2004 the group applied the provisions of 'UITF Abstract 38 - Accounting for ESOP Trusts' and, as a result, the group's investment in own shares held for the purpose of employee share ownership plans has been reclassified from fixed asset investments and is now recorded as a reduction in shareholders' equity. Comparative periods have been restated to reflect the adoption of UITF 38.

Twelve months ended

March 31

2005 £m

2004 £m

2 RECONCILIATION OF OPERATING PROFIT TO

CASH INFLOW FROM OPERATING ACTIVITIES

Group operating profit

540

405

Depreciation, amortisation and impairment

687

679

Other items not involving the movement of cash

11

(Increase)/decrease in stocks

(5)

8

Increase in debtors

(68)

(31)

Increase in creditors

40

43

Decrease in provisions for liabilities and charges

(2)

(22)

Cash inflow from operating activities

1,192

1,093

3 RECONCILIATION OF NET CASH FLOW TO

MOVEMENT IN NET DEBT

Increase/(decrease) in cash during the period

14

(158)

Net cash outflow from decrease in debt and

lease financing

1,155

834

Cash outflow from liquid resources

16

198

Change in net debt resulting from cash flows

1,185

874

New finance leases taken out and hire

purchase arrangements made

(12)

(97)

Non cash refinancing

9

32

Exchange

54

182

Movement in net debt during the period

1,236

991

Net debt at April 1

(4,158)

(5,149)

Net debt at period end

(2,922)

(4,158)

Three months ended

Twelve months ended

March 31

March 31

2005 £m

2004 £m

2005 £m

2004 £m

4 INCOME AND CHARGES RELATING TO FIXED ASSET INVESTMENTS

Other

2

3

2

3

Income and charges represented by:

Group

2

3

2

3

NOTES TO THE ACCOUNTS (Continued)

For the period ended March 31, 2005

Three months ended

Twelve months ended

March 31

March 31

2005 £m

2004 £m

2005 £m

2004 £m

5 (LOSS)/PROFIT ON SALE OF FIXED ASSETS AND INVESTMENTS

Net loss on disposal of dba

(83)

Net loss on sale of investment in Qantas (note 1)

(11)

Net (loss)/profit on disposal of other

fixed assets and investments

(13)

6

(15)

37

(13)

6

(26)

(46)

Represented by:

Group

(14)

6

(32)

(47)

Associates

1

6

1

(13)

6

(26)

(46)

Note 1:

On September 9, 2004, the group completed the sale of its 18.25% holding in Qantas Airways Limited through a book build sale of the shares. The sale realised gross proceeds of £427 million (A$1.1 billion) before tax. The loss on disposal of £11 million includes the write-back of goodwill of £59 million previously set off against reserves.

6 INTEREST

Net payable:

Interest payable less amount capitalised

70

69

273

279

Interest receivable

(22)

(17)

(83)

(63)

48

52

190

216

Retranslation credits on currency

borrowings

(7)

(1)

(33)

(16)

Other finance income and related fees

(6)

(14)

(13)

35

51

143

187

Net interest payable represented by:

Group

32

46

135

179

Associates

3

5

8

8

35

51

143

187

7 TAX

The tax charge for the year is £149 million made up of a current tax charge of £43 million representing share of associates tax of £13 million, overseas tax of £29 million and a prior year tax charge of £1 million; and £106 million by way of deferred taxes in the UK. The overseas tax includes £14 million in respect of the sale of Qantas. The deferred tax provision is included on balance sheet and amounts to £1,243 million at March 31, 2005 (March 31, 2004: £1,137 million)

8 EARNINGS PER SHARE

Basic earnings per share for the quarter ended March 31, 2005 are calculated on a weighted average of 1,072,055,000 ordinary shares (March 31, 2004: 1,070,099,000) and for the twelve months ended March 31, 2005, on a weighted average of 1,071,126,000 ordinary shares (March 31, 2004: 1,070,077,000) as adjusted for shares held for the purposes of employee share ownership plans including the Long Term Incentive Plan. Diluted earnings per share for the quarter ended March 31, 2005 are calculated on a weighted average of 1,072,055,000 ordinary shares (March 31, 2004: 1,070,117,000) and for the twelve months ended March 31, 2005 on a weighted average of 1,126,485,000 ordinary shares (March 31, 2004: 1,070,077,000).

The number of shares in issue at March 31, 2005 was 1,082,903,000 (March 31, 2004: 1,082,845,000) ordinary shares of 25 pence each.


NOTES TO THE ACCOUNTS (Continued)

For the period ended March 31, 2005

March 31

2005 £m

2004 £m

Restated

9 INTANGIBLE ASSETS

Goodwill

88

93

Landing rights

102

75

190

168

10 TANGIBLE ASSETS

Fleet

6,748

7,104

Property

959

1,042

Equipment

445

491

8,152

8,637

11 INVESTMENTS

Associated undertakings

120

501

Trade investments

30

30

150

531

12 CREDITORS: AMOUNTS FALLING DUE WITHIN ONE YEAR

Loans

63

102

Finance Leases

96

119

Hire Purchase Arrangements

288

461

447

682

Corporate tax

36

6

Other creditors and accruals

2,385

2,308

2,868

2,996

13 BORROWINGS AND OTHER CREDITORS FALLING DUE AFTER

MORE THAN ONE YEAR

Loans

1,105

1,123

Finance Leases

1,493

1,978

Hire Purchase Arrangements

1,447

1,933

4,045

5,034

Other creditors and accruals

301

340

4,346

5,374

14 RESERVES

Balance at April 1

1,916

1,756

Retained profit for the period

251

130

Exchange and other movements

(37)

16

Goodwill written back on disposals

59

14

Employee share option exercise through investment in own shares

5

2,194

1,916

15 The figures for the three months ended March 31, 2005 are unaudited and do not constitute full accounts within the meaning of Section 240 of the Companies Act 1985. The figures for the twelve months ended March 31, 2005 form part of the Annual Report and Accounts and were approved by the Board of Directors today but have not been delivered to the Registrar of Companies; the report of the auditors on the accounts is unqualified.

The figures for the year ended March 31, 2004 have been extracted with certain minor presentational changes from the full accounts for that year, which have been delivered to the Registrar of Companies and on which the auditors have issued an unqualified audit report.


AIRCRAFT FLEET

Number in service with Group companies at March 31, 2005

On Balance

Sheet

Off Balance Sheet

Total

Changes

Since

Aircraft

Operating Leases

Mar 2005

Mar 2004

Future

deliveries

Options

AIRLINE OPERATIONS (Note 1)

Boeing 747-400

57

57

Boeing 777

40

3

43

Boeing 767-300

21

21

Boeing 757-200

13

13

Airbus A319 (Note 2)

21

12

33

3

47

Airbus A320 (Note 3)

9

17

26

(1)

3

Airbus A321

6

6

6

1

Boeing 737-300

5

5

Boeing 737-400 (Note 4)

18

18

(5)

Boeing 737-500

10

10

Turboprops (Note 5)

9

9

(1)

Embraer RJ145

16

12

28

17

Avro RJ100

16

16

British Aerospace 146 (Note 6)

5

5

GROUP TOTAL

206

84

290

(1)

7

64

Notes:

1. Includes those operated by British Airways Plc and British Airways CitiExpress Ltd.

2. Certain future deliveries and options include reserved delivery positions, and may be taken as any A320 family aircraft.

3. Excludes 1 Airbus A320 sub-leased to GB Airways.

4. Excludes 2 Boeing 737-400s sub-leased to Air One and 1 Boeing 737-400 stood down pending return to lessor.

5. Comprises 9 de Havilland Canada DHC-8s. Excludes 2 British Aerospace ATPs stood down pending return to lessor, 3 British Aerospace ATPs sub-leased to Loganair and 12 Jetstream 41s sub-leased to Eastern Airways.

6. The British Aerospace 146 fleet will be retired from service during 2005/06.


COST PERFORMANCE DELIVERS GOOD RESULTS

Pre-tax profit of £415 million

Operating profit of £540 million

Net debt at £2.9b - lowest level since 1993

Rod Eddington, British Airways chief executive, said: "These are good results driven by continued cost control and strong demand for our products. Seat factors are at record levels, but yield, down 4.4 per cent, continues to be under pressure and is down for the third year running.

"We have exceeded our 2003 -2005 business plan savings of £450 million by £7 million.

This included reducing external spend by £300 million and improving our use of technology. During the year we have substantially improved our online capability to improve customer service and increase the airline's efficiency."

more

COST PERFORMANCE DELIVERS..2

Mr Eddington added: "Self-service check-in has reached an all time high with nearly 600,000 passengers a month using our kiosks at airports. Online printed boarding passes are now accepted at 41 airports across our network and more than 40,000 customers a month choose to print their boarding passes from their home or office.

"British Airways has won an innovation award for its online "manage my booking" facility. This allows customers to select a seat, choose a special meal, add their Executive Club details to their booking and email their itinerary to friends. Usage of e-tickets has grown from 41 per cent to 76 per cent - the highest usage of any network airline outside of the United States."

"We have achieved a 6.9 per cent operating margin which is up 1.5 points and the best margin since 1997. As a result this has triggered our employee reward programme. All our staff will receive a bonus for their efforts, the first time such a payment has been made since 1998."

Martin Broughton, British Airways chairman, said: "Market conditions remain broadly unchanged. For the year to March 2006, total revenue is expected to improve by 4-5 per cent, up from 3-4 per cent due to the impact of the latest fuel surcharges. Capacity and volumes are expected to increase by about 3 per cent with total yield flat.

"Fuel costs, net of hedging, are now expected to be about £400 million more than last year, up from £300 million due to recent price rises.

"As announced in our latest business plan, our focus is on preparing for the move to Terminal 5 at London Heathrow in 2008, investing in products for our customers and continuing to drive simplification to deliver a competitive cost base."

COST PERFORMANCE DELIVERS..3

For the year, cargo volumes measured in cargo tonne kilometers (CTKs) were up 11.1 per cent compared with last year, with yields down 6.3 per cent. Overall load factor was up 2.1 points at 69.7 per cent. For the quarter, cargo volumes were up 5.7 per cent compared with last year, with overall load factor up 2.1 points at 68.2 per cent, but yields were down 6.2 per cent.

At March 2005, the FRS17 accounting valuation of the airline's group pension schemes showed a deficit of £1.4 billion (2004: £1.2 billion net deficit).

A webcast of British Airways' presentation to city analysts can be accessed via the internet on www.bashares on Friday, May 13 at 9am followed by a conference call to city analysts at 2pm.

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, 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 2004.