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Jim Mason · Guest

BA Traffic and capacity statistics - October 2006

Summary of the headline figures

In October 2006, passenger capacity, measured in Available Seat Kilometres,
was 0.8 per cent above October 2005. Traffic, measured in Revenue
Passenger Kilometres, was higher by 1.1 per cent. This resulted in a
passenger load factor up 0.2 points versus last year, to 74.9 per cent.
The increase in traffic comprised a 2.1 per cent increase in premium
traffic and a 1.1 per cent increase in non-premium traffic. Cargo,
measured in Cargo Tonne Kilometres, decreased by 7.2 per cent. Overall
load factor increased by 0.5 points to 70.4 per cent.

Market conditions

Overall market conditions are broadly unchanged. Longhaul premium transfer
and shorthaul premium traffic, although recovering, continue to be affected
by the tighter security arrangements currently in place. As a result,
total revenue is now expected to be 4.5 per cent to 5 per cent higher than
last year, down half a per cent from our previous guidance. We welcome the
government's announcement yesterday on the re-introduction of liquids in
cabin baggage which brings the UK into line with the rest of the EU. We
will continue to support the BAA as they work to improve the customer
experience across London's airports.

Costs

We expect that total costs, excluding fuel, will be flat compared to last
year. Total fuel costs net of hedging for the year are expected to be some
£400 million higher than last year, based on current prices and sterling
dollar exchange rates.

Strategic Developments

British Airways launched a competition for new longhaul aircraft by issuing
tender documents to aircraft and engine manufacturers. Airbus, Boeing as
well as engine manufacturers Engine Alliance, General Electric and Rolls
Royce plus other key component suppliers have been invited to bid. The
competition is the first step in a lengthy process before the airline makes
a decision on fleet growth and replacement for the next decade. Launching
the competition highlights the need to tackle the airline's £2.1 billion
pension deficit in the New Airways Pension Scheme (NAPS).

Martin George, commercial director, and Iain Burns, British Airways' head
of communications resigned their positions with the airline on October 9.
They had been on leave of absence since June 2006 when the Office of Fair
Trading and the US Department of Justice began an investigation focused on
long-haul passenger fuel surcharges. Robert Boyle, British Airways'
director of planning was appointed commercial director and Thomas Coops,
former communications director at Abbey National, was appointed interim
head of corporate and media relations.

The airline launched a promotion offering savings of up to £1,455 on Club
World return fares to 36 longhaul destinations this winter including New
York, Shanghai and Tokyo.

The airline also launched a promotion offering savings of up to £185 to US
and Canadian ski destinations this winter including Denver, Vancouver and
Calgary.

Ends

November 3, 2006
109/CW/06

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