November 2009 Issue 43 VERVIEW THE MAGAZINE FOR BRITISH AIRWAYS SHAREHOLDERS THE SKY’S THE LIMIT The proposed merger between British Airways and Iberia is great news for customers and shareholders INCORPORATING2009 HALF-YEAR THE FINANCIAL REPORT www.bashareholders.com [[1L]] Welcome to the latest issue of Overview, the magazine for British Airways shareholders. On the following pages you’ll fi nd details of the latest fi nancial results, plus comments from the DIRECTORY chairman, CEO and CFO. Registered Offi ce Waterside, PO Box 365, Harmondsworth In addition, we take a close look at BA’s new leisure strategy, UB7 0GB take a ride on the maiden fl ight of the new service from London Registered Number 1777777 City Airport to New York and check out the thinking behind Shareholder Information UK the current Opportunities advertising campaign. For queries in relation to your shareholding We’d love to hear your views: you can send us an email at or shareholder benefi ts contact: Company Registrars, [email protected]. We’ll be publishing a selection of Computershare Investor Services PLC, letterslet in the next edition of Overview, The Pavilions, anand the writer of the best one will win Bridgwater Road, Bristol BS99 6ZY a four-night holiday in Las Vegas. Tel: 0870 702 0110 SSee the back page for details. Email: [email protected] Tim Hulse, Editor With your shareholder reference number you can check your shareholding online at: Kirsty Gallacher helped British Airways celebrate www-uk.computershare.com/investor its 90th anniversary in August. Another reason for celebration recently was BA’s award for Best Business British Airways Shareholder Services Airline at the Condé Nast Traveller Readers’ Awards. can be contacted at: [email protected] Shareholder Reservations Book online at The British Airways Board www.bashareholders.com CONTENTS (as at November 1, 2009) All other enquiries 03 MARTIN BROUGHTON 0844 493 0787 The chairman’s view CHAIRMAN Open 06:00-20:00, 7 days per week 04 WILLIE WALSH Martin Broughton For callers outside the UK, please dial: The CEO’s view +44 191 490 7901 EXECUTIVE DIRECTORS Or in the US: 0800 247 9297 06 KEITH WILLIAMS The CFO’s view CHIEF EXECUTIVE For fares, availability and new bookings including NEW DIRECTIONS Willie Walsh fl ights, hotels, insurance 07 Why British Airways has launched a CHIEF FINANCIAL OFFICER and car hire: www.ba.com host of new routes around the world Keith Williams For fl ight arrival and THE FIGURES departure information: 10 Key data from the half-year fi nancial report NON-EXECUTIVE DIRECTORS 0844 493 0777 Open 06:00-20:00, 7 days per week 12 FROM LCY TO NYC Maarten van den Bergh Travel Clinics: Allister Heath describes the maiden Baroness Kingsmill 0845 600 2236 fl ight of fl ight BA001 to New York Jim Lawrence 14 OPPORTUNITIES Alison Reed How British Airways’ new advertising Cedar Communications Ltd, Ken Smart 85 Strand, campaign is trying to get people fl ying London WC2R 0DW Baroness Symons +44 (0)20 7550 8000 16 COMPETITION www.cedarcom.co.uk Win a four-night holiday in Las Vegas © 2009 Cedar Communications Limited, London The Summary Financial Statement in this magazine on and fi nancing plans, expected future revenues and Colour origination by Colour Systems pages 10 to 11 does not contain suffi cient information expenditures and divestments. All forward-looking Printed in the UK by RR Donnelley to allow as full an understanding of the results of the statements in this report are based upon information group and state of aff airs of the company or the group known to the company on the date of this report. and of their policies as would be provided by the full The Company undertakes no obligation to publicly Editor | Tim Hulse interim management report. Shareholders who would update or revise any forward-looking statement, Deputy editor | Bryony Coleman like more detailed information may obtain this online whether as a result of new information, future events Editorial consultant | Mark Jones at www.bashares.com. or otherwise. It is not reasonably possible to itemise all Art editor | Belinda Tighe Certain statements included in this edition of of the many factors and specifi c events that could Picture editor | Carl Harrison Overview may be forward-looking and may involve cause the company’s forward-looking statements to Proof reader | Bob Larkins risks and uncertainties that could cause actual results be incorrect or that could otherwise have a material Production manager | Deborah Homden to diff er materially from those expressed or implied adverse eff ect on the future operations or results of Group account director | Karen Huxley by the forward-looking statements. an airline operating in the global economy. For British Airways | Kate Gay, Sarah Billington Forward-looking statements include, without Fuller information on some of the factors that limitation, projections relating to results of operations could result in a material diff erence is available in and fi nancial conditions and the Company’s plans and the Company’s Annual Report and Accounts for the objectives for future operations, including, without year ended March 31, 2009, which is available on limitation, discussions of the Company’s business www.bashares.com. November 2009 OVERVIEW www.bashareholders.com CHAIRMAN’S 3 VIEW MARTIN BROUGHTON CHAIRMAN’S NOTEBOOK MEETING NEW CHALLENGES Views from the chair on the Iberia merger, Copenhagen and the Backing British Business campaign ’m very excited about our merger with Iberia and delighted that they tried to do something similar to Amsterdam and then shelved it Willie is going to lead the group. We are at last participating in because passengers in their droves decided not to go via Schiphol, they consolidation and this is the fi rst step in building an airline group went via Paris or Frankfurt to avoid paying the duty. That’s our fear here. Ithat could include several brands. It is a giant leap forwards We’re encouraged that the shadow chancellor, George Osborne, is alert for British Airways. to the problem. He had lunch with his counterpart in Holland, where they It has involved months of shuttle diplomacy but the arrival of new pulled back from imposing a big APD rise for fear of damaging Schiphol’s management at Iberia earlier this year re-energised the deal. The competitiveness. We don’t have to tell Osborne what the problem is; talks had ground to a halt but the arrival of Antonio Vazquez changed he’s already learned it from the horse’s mouth. all that and it has been a pleasure to work with him. This is a merger of equals that will be good for both British Airways and Iberia. My name was linked to the top job at ITV. From talking to people I We know our institutional shareholders support the merger and get the impression that my name was probably on a shortlist that we know the city supports it. We need to ensure all our shareholders was being circulated internally. But they never approached me and have a voice. So while the AGM will be held in Madrid there will be a I’ve made it clear to a number of headhunters who have approached separate meeting for shareholders in the UK linked by satellite. me that I am chairman of a FTSE 100 company and have no The two airlines’ brands will remain very separate. wish to be chairman of a second. There is no thought whatsoever of creating a single I will continue to be chairman of British Airways brand approach. and deputy chairman of the new merged BA Iberia group. It was obviously disappointing to report our fi rst ever loss at the half year stage, which is “Consolidation Are we coming out of recession? I see no the more profi table half, but there were some green shoots but we are working hard to help signs of encouragement in the results which is a giant stimulate business. It’s not rocket science that clearly showed our ability to reduce cost and leap forwards face-to-face meetings help to do business. increase customer satisfaction and operational Our Backing British Business campaign performance at the same time. Our big challenge for British launched in April has been a great success is to continue to achieve this. helping small businesses and some of the deals Airways” done on the back of our grants have been truly I think we could get a deal done at Copenhagen. inspirational. The next phase of the campaign has But the politicians are really going to struggle to get just been announced. It gives 100 companies the something that everyone can sign up to; so you can see chance to win a year’s worth of fl ights from March 2010. Copenhagen turning in to a staging post for another Copenhagen Small businesses are the backbone of this country and we are 12 or 18 months down the line. proud to be able to help them. There’s a cynical view that a global agreement on including airlines and shipping in the targets is one way of ensuring a “success” — given I was delighted to see off the BA001 London City to New York the failure to get an agreement on those industries at Kyoto. We inaugural service in September. We have a long and distinguished would be all in favour of that compromise. We want a global deal. history of delivering world beating and innovative new services We are heading towards being heavily taxed in this country — it’s and our London City service is no exception.