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BRITISH AIRWAYS SHOWS THIRD QUARTER PROFIT, GROWTH CONTINUES DESPITE TOUGH ECONOMIES

 NEW YORK, Feb. 16 /PRNewswire/ -- British Airways (NYSE: BAB) today announced a net profit of 40 million pounds sterling ($60 million) for the third quarter ended Dec. 31, 1992, down from last year due to a significant depreciation in the value of sterling and ongoing recession.
 Net profit for the nine months was 222 million pounds ($335 million) compared with 234 million pounds for the same period in the prior year, equivalent to 30.1 pence per share.
 Earnings per American Depositary Share (ADS), for the nine-months, were 2.65 pounds ($4) on a fully diluted basis.
 Sir Colin Marshall, Chairman of British Airways, said: "Trading conditions remain difficult. British Airways continues to achieve traffic growth despite the general lack of positive features in the main economies we serve.
 "Traffic growth, focused on the lower yielding main cabin of the aircraft, is falling short of capacity increases, and premium demand remains below levels of a year ago," he added.
 "The resultant dilution in traffic mix coupled with aggressive industry market pricing policies continues to place significant downward pressure on passenger yield. Partly offsetting these factors, the benefits of the weak pound are beginning to show through, and sound progress continues in the cost reduction program. The fourth quarter is invariably the weakest of the year."
 At the operating level, the result for the quarter was a profit of 70 million pounds ($106 million), down from 111 million pounds in the same quarter in 1991.
 The operating profit for nine months improved five per cent to 335 million pounds ($506 million) on the previous year's figure of 319 million pounds.
 After funding capital expenditure, net cash outflow in the nine months to December 1992, was 183 million pounds. In the same period the prior year, the


net cash inflow of 399 million pounds included 274 million pounds from the sale of the Group's engine overhaul business.
 After making provisional adjustments to the net assets acquired to reflect their fair value and to align accounting policies to those of British Airways, the 48 million pounds of goodwill arising on the acquisition of Dan-Air, has been written off against Group reserves.
 Group revenue for the quarter increased by 4.5 percent to 1.37 billion pounds ($2.06 billion), despite a 5.1 percent drop in yield, reflecting the 8.6 percent rise in total passenger numbers. Cargo ton miles increased by 6 percent.
 Expenditure for the quarter rose by 8.3 percent to 1.3 billion pounds ($1.96 billion). The average number of employees was down 1.7 percent to 48,870 and productivity up by 13 percent.
 -0- 02/16/93
 /EDITORS NOTES: American dollar equivalent amounts are translated at the exchange rate at Dec. 31, 1992, of $1.51 to one against the pound sterling. One American Depositary Share equals 10 UK ordinary shares.
 /CONTACT: Sandy Gardiner, public affairs, 718-397-4725, John Lampl, 718-397-4729 or Mark Dunkerley, investor relations, 202-331-9068, all for British Airways/
 (BAB)


CO: British Airways ST: New York IN: AIR SU: ERN

JP -- NY012 -- 6653 02/16/93 02:30 EST
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Date:Feb 16, 1993
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