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
18 May 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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foreign private issuer must furnish and make public under the laws of the
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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
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connection with Rule 12g3-2(b):
CONTENTS
1. Strong Full Year 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 18 May 2007
INDEX TO EXHIBITS
Exhibit No. Description
1. Strong Full Year Results
STRONG FULL YEAR RESULTS IN CHALLENGING CONDITIONS
Financial highlights:
* Revenue up 3.4 per cent to GBP8,492 million (2006: GBP8,213 million)
* Operating profit GBP602 million despite fuel up GBP350 million (2006:
GBP694 million)
* Pre-tax profit of GBP611 million (2006: GBP616 million)
* Operating margin 7.1 per cent (2006: 8.5 per cent)
* Provision of GBP350 million for competition investigation
* Earnings per share 25.5 pence (2006: 40.4 pence)
Operational highlights:
* Traffic volumes up 2.9 per cent
* Seat factor flat at 76.1 per cent
* Capacity up 2.9 per cent
* Yield up 2.1 per cent
British Airways today (Friday May 18) reported an operating profit of GBP602
million for the year ending March 31, 2007 (2006: GBP694 million). The operating
margin was 7.1 per cent (2006: 8.5 per cent). For the quarter, the operating
profit was GBP31 million (2006: GBP98 million) giving an operating margin of 1.6
per cent. The pre-tax profit was GBP611 million (2006: GBP616 million) for the
year and GBP27 million (2006: GBP98 million) for the quarter.
Group turnover for the year was GBP8,492 million (2006: GBP8,213 million), up
3.4 per cent on a flying programme up 0.7 per cent, measured in Available Tonne
Kilometres (ATKs). For the quarter, Group turnover was significantly impacted by
the threat of a strike and was down 5.9 per cent to GBP1,932 million, on a
flying programme 1.5 per cent lower in ATKs.
Operating cash flow for the year was GBP756 million (2006: GBP1,339 million).
Including current interest bearing deposits, the cash position at March 31,
2007, was GBP2,355 million, down GBP85 million compared with March 31, 2006.
Net debt was GBP991 million, a reduction of GBP650 million since the start of
the financial year. The second installment of GBP560 million from the company's
GBP800 million cash injection was paid into the New Airways Pensions Scheme
(NAPS) on April 2, 2007. This reduced the cash balances immediately after the
balance sheet date to around GBP1,800 million.
Traffic volumes, measured in Revenue Passenger Kilometres (RPKs), were up 2.9
per cent for the year and down 1.3 per cent for the quarter. Seat factor was
flat for the year at 76.1 per cent on capacity 2.9 per cent higher in Available
Seat Kilometres (ASKs) and down 2.0 percentage points in the quarter to 71.4 per
cent. Yield measured in pence per RPK was up 2.1 per cent for the year and down
3.4 per cent for the quarter. Total costs, excluding one off items, were up 5.5
per cent, driven mainly by a 22 per cent increase in fuel costs to GBP1.93
billion. Non-fuel costs were up 1.1 per cent.
Cargo volumes for the year, measured in Cargo Tonne Kilometres (CTKs) were down
4.7 per cent compared with the prior year, with yields up 1.7 per cent. For the
quarter, cargo volumes were down 12.4 per cent compared to last year. Cargo
performance during the second half was impacted by operational and security
related issues.
The results include a GBP396 million credit as a result of a change to the New
Airways Pension Scheme (NAPS).
The investigations by the US Department of Justice, the European Commission and
the UK Office of Fair Trading and others into anti-competitive activity on long
haul passenger and cargo fuel surcharges are continuing. However, British
Airways has now responded to the subpoenas and other statutory requests for
information from these authorities.
British Airways has a long-standing, clear and comprehensive competition
compliance policy. This policy requires all staff to comply with the law at all
times. It has become apparent that there have been breaches of this policy in
relation to discussions about these surcharges with competitors. As a result, it
is now appropriate for the company to make a provision, under IAS 37, of GBP350
million in its full year accounts. The provision represents the best estimate of
the amount to settle all competition authority and civil claims at the Balance
Sheet date, but recognises that the final amount is subject to uncertainty.
Willie Walsh, British Airways' chief executive, said:
"These are strong results despite a challenging year. We know at times it has
been a frustrating year for our customers, caused by disruption and overly
restrictive UK government security measures on hand baggage.
"We have taken steps to ensure the fundamentals of our business are strong,
laying the foundations to deliver our 10 per cent operating margin target by
March 2008. We have addressed the GBP2.1 billion pension deficit and disposed of
the loss-making regional business, BA Connect. Our total cost control has been
good, with non-fuel costs up just 1.1 per cent.
"We are on the threshold of a new era for our customers. Terminal 5 is only 313
days away and tickets for flights from T5 are now available for sale. Our new
Club World cabin is now on 96 services to New York's JFK airport and we will be
investing in a fantastic new First cabin. We have made progress on Gatwick,
particularly on costs, which has given us the confidence to renew our commitment
to Gatwick and upgrade its fleet. This is a step towards a single shorthaul
fleet.
"Earlier this year we ordered four new widebodied aircraft for delivery in 2009,
and we anticipate making a further major order for 34 replacement and additional
growth aircraft in the coming months. Today we have announced an order for
eight Airbus A320 family aircraft for the shorthaul fleet.
"The 'open skies' air treaty agreed recently between the EU and the US has given
us some new and exciting opportunities. We have filed an application with the
US DoT for permission to operate services between any point in the US and any
point in the EU to enable us to grow the most profitable part of our business."
Martin Broughton, British Airways' chairman, said:
"We are pleased with the progress that Willie and his team have made on many
fronts this year despite all the challenges.
"In terms of current performance, we have seen some weakness in non-premium
segments notably on the North Atlantic. To some degree, complete visibility is
hampered by the ongoing baggage restrictions which impact all cabins but
particularly premium. Our revenue guidance of 5-6 per cent increase is unchanged
but we now expect to be at the lower of end of this range.
"Cost control remains a key focus and full year costs, excluding fuel, are still
expected to be some GBP50 million higher than the year just reported.
"Our goal to achieve a 10 per cent operating margin by March 2008 remains on
track, although year over year improvements are likely to be delivered
predominantly in the second half as we cycle against record results in the
period to August 10 last year."
The Board has recommended that no final dividend be paid.
ends
May 18, 2007
111/KG/07
Note to Editors:
* The provision in respect of competition investigations relates to potential
Government fines in the following jurisdictions in relation to cargo fuel
surcharges: USA, Europe, Australia, Canada, New Zealand and South Africa
and, in relation to long haul passenger fuel surcharges: USA and the UK. It
also relates to civil claims in the USA, Australia and Canada. Under IAS 37
the provision represents the estimate of the amount to settle competition
authority and civil claims at the Balance Sheet date, but recognises that
the final amount required to pay all claims and fines is subject to
uncertainty.
* Under IAS 19 accounting rules a change to the New Airways Pension Scheme
(NAPS), capping pensionable pay at RPI, resulted in a one-off credit to
the P&L account.
* See separate RNS statement on short haul aircraft order.
* The current year and prior year results have been restated to reflect the
agreement 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.
British Airways' presentation to city analysts can be accessed via the internet
www.bashares.com at 9am. A webcast of British Airways' conference call to city
analysts can also be accessed via the internet www.bashares.com at 2pm.
This document is the summary financial statement for the year ended March 31,
2007 of British Airways Plc, whose details are above. Certain statements
included in this edition of Investor may be forward-looking and may involve
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 and financing plans, expected future revenues and
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. Fuller
information on some of the factors which could result in a material difference
is available in the company's Annual Report and Accounts for the year ended
March 31, 2007, which is available on www.bashareholders.com.