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
02 February, 2007
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
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permitted by Regulation S-T Rule101(b)(1)
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Indicate by check mark if the registrant is submitting the Form 6-K in paper as
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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
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report or other document is not a press release, is not required to be and has
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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
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connection with Rule 12g3-2(b):
CONTENTS
1. Mixed results
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 02 February, 2007
INDEX TO EXHIBITS
Exhibit No. Description
1. Mixed results
MIXED RESULTS
- Operating profit of GBP129 million (down GBP47 million)
- Pre-tax profit of GBP113 million (down GBP53 million)
- Operating margin at 6.2 per cent
- Revenue from continuing operations up 0.5 per cent
British Airways today reported an operating profit of GBP129 million for the
three months to December 31, 2006 (2005: GBP176 million). For the nine months,
the operating profit was GBP571 million (2005: GBP596 million). The operating
margin for the quarter was 6.2 per cent, 2.4 points lower than last year.
Pre-tax profit for the quarter was GBP113 million (2005: GBP166 million). For
the nine months, pre-tax profit was GBP584 million (2005: GBP518 million). These
results have been restated to show the business on a continuing basis, excluding
BA Connect, following the decision to dispose of the regional business to Flybe.
Willie Walsh, British Airways' chief executive, said: "These are mixed results
with costs up 3 per cent reflecting higher fuel costs and revenue up 0.5 per
cent to GBP2.1billion.
"Our drive on costs continues ahead of our move to Terminal 5. Fuel remains a
significant burden with costs in the quarter up 11.2 per cent. We remain
committed to achieving our cost reduction target of GBP450 million and a 10 per
cent operating margin by March 2008.
"Revenue has been hit by a raft of external factors. These include the
continued impact of the August security measures. Common EU baggage standards on
liquids were not agreed until mid-way through the quarter and more restrictive
rules on hand baggage continue to apply in the UK. As a result, transfer
volumes at Heathrow are still down. The baggage system operated by the BAA at
Heathrow's Terminal 4, failed twice in December and severe fog led to the
cancellation of 800 flights in the pre-Christmas peak period. The impact of all
these external factors in the quarter is estimated at GBP40 million.
"The patience and loyalty of our customers has been tested and I want to
apologise for the inconvenience they have suffered during this period. The
uncertainty caused by the threat of recent industrial action has added to this
but we have reached an agreement with the cabin crew branch of the T&G over a
range of issues which I am confident forms the basis of a good relationship in
the future. We are now re-focusing on customer service to win back the
confidence and trust of our customers.
"On pensions, we are delighted that the BA Forum, which represents British
Airways' unions, recently issued a statement recommending acceptance of the
changes in benefits to tackle the GBP2.1 billion deficit in the New Airways
Pension Scheme (NAPS). This is a major milestone and we can now move forward on
our plans for fleet renewal and replacement.
"We are now flying our new Club World on four aircraft and the embodiment
programme is on schedule for completion by summer 2008. Feedback from our
customers has been fantastic. They love the extra comfort, space and
flexibility of the new flat bed and our greatly enhanced in-flight entertainment
system."
Martin Broughton, British Airways' chairman, said: "The market continues to show
good demand in premium cabins. The weakness in some non-premium segments is also
still a feature. The revenue outlook for the fourth quarter has been impacted by
the threat of industrial action. While the strike was averted, the estimated
revenue loss is still some GBP80 million. Revenue guidance for the full year is
now 3.25 - 3.75% growth.
"While cost control remains strong, full year costs excluding fuel are expected
to be some GBP50 million higher than last year. This reflects higher costs in
the first quarter. Our full year fuel guidance has been revised down by GBP40
million reflecting the reduction in fuel prices. The fuel bill will now be
accounted for on a continuing operations basis, and is expected to be some
GBP1.95 billion."
Group turnover for the third quarter at GBP2,068 million was up 0.5 per cent on
a flying programme 1.8 per cent smaller measured in available tonne kilometres
(ATKs). Passenger yields were up 1.9 per cent, measured in pence per revenue
passenger kilometres (RPKs). Seat factor was down 0.5 points at 74 per cent on
capacity 0.8 per cent higher measured in available seat kilometres (ASKs).
For the nine month period, turnover improved by 6.5 per cent to GBP6,560 million
on a flying programme 1.5 per cent higher in ATKs. Passenger yields were up 3.7
per cent with seat factor up 0.6 points at 77.6 per cent on capacity 3.3 per
cent higher in ASKs.
For the quarter, unit costs were up 4.9 per cent on the same period as last year
reflecting total costs up 3 per cent and capacity 1.8 per cent lower in ATKs.
Excluding fuel, unit costs were up 2.6 per cent.
Total costs were up, driven mainly by higher fuel and employee costs. Fuel costs
rose by 11.2 per cent due to the increase in fuel price net of hedging. Employee
costs were up by 2.0 per cent due mainly due to increased pension costs.
Operating cashflow for the nine months was GBP608 million. Including current
interest bearing deposits, the cash position at December 31, 2006 was GBP2,643
million, up GBP203 million compared with March 31, 2006. Net debt was GBP866
million, down by GBP775 million since the start of the year.
ends
February 2, 2007 010/KG/2007
Note to Editors
- The current year and prior year results have been restated to reflect the
agreement in principle 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.
- Full year restated comparisons for the year ended March 2006 are as follows:
Revenue GBP8,213 million against GBP8,515 million, fuel GBP1,581 million
against GBP1,632 million and total costs GBP7,518 million against
GBP7,810 million.
- The British Airways Forum represents the airline's four unions: Amicus,
BALPA, GMB and T&G whose national officers consult with the company on
airline-wide policies. On 5th January after nine months consultation, the
BA Forum issued a statement recommending acceptance of changes to future
benefits in the New Airways Pension Scheme.
A webcast of British Airways' conference call to city analysts can be accessed
via the internet www.bashares.com - on Friday, February 2 at 2pm.
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 programmes, 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 2006.
The estimated impacts of the disruption in Quarter 3 and the averted strikes in
Quarter 4 reflect the direct costs of the measures and the estimated revenue
impacts, both direct and indirect. The estimates of GBP40 million and GBP80
million respectively, are based on assumptions the company considers reasonable,
but are judgemental.