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
19 May 2006
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
Indicate by check mark if the registrant is submitting the Form 6-K in paper as
permitted by Regulation S-T Rule101(b)(1)
Note: Regulation S-T Rule 101(b)(1) only permits the submission in paper of a
Form 6-K if submitted solely to provide an attached annual report to security
holders.
Indicate by check mark if the registrant is submitting the Form 6-K in paper as
permitted by Regulation S-T Rule 101(b)(7)
Note: Regulation S-T Rule 101(b)(7) only permits the submission in paper of a
Form 6-K if submitted to furnish a report or other document that the registrant
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
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
If "Yes" is marked, indicate below the file number assigned to the registrant in
connection with Rule 12g3-2(b):
CONTENTS
1. Pensions deficit
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 19 May 2006
INDEX TO EXHIBITS
Exhibit No.1 Description
Pensions deficit
PENSION DEFICIT TOPS GBP2 BILLION
British Airways' accounting valuation of its main pension scheme, the New
Airways Pension Scheme (NAPS), showed a deficit of GBP2,070 million at March 31
2006, up GBP101 million on the previous year.
Keith Williams, the airline's chief financial officer, said, "The accounting
deficit reflects low long-term interest rates and has gone up despite the
company's increased contributions and strong equity markets."
ends
Notes to editors
- British Airways adopted International Financial Reporting Standards
(IFRS) on April 1, 2005. The deficit is now accounted for under IAS19, rather
than FRS17.
- In the company's accounts, of the GBP2,070 million, GBP1,587 million is
recognised on the balance sheet and GBP483 million is unrecognised. The
unrecognised amount occurs as a result of a smoothing mechanism allowed under
IAS19 ("the corridor") in respect of changes in estimates in both scheme assets
and liability benefits earned. The variations in estimates for asset returns
and discount rates are the principal factors impacting the deficit.
- The company's pre-tax pension liability for all schemes in
deficit increased from GBP2,191 million to GBP2,290 million. Of the GBP2,290
million GBP1,791 million is recognised on the balance sheet (GBP1,587 million
for NAPS and GBP204 million for other schemes in deficit) and GBP499 million is
unrecognised (GBP483 million for NAPS and GBP16 million for other schemes in
deficit).
- At March 31, 2005 the total NAPS IAS19 pre-tax deficit (recognised and
unrecognised) was GBP1,969 million.
- The NAPS actuarial deficit at March 2003 was GBP928 million.
- The airline's cash contribution to NAPS in 2005/6 was GBP246 million.
The airline's proposal on pensions announced on March 23, 2006 includes:
- Keeping a final salary pension scheme with no changes to past service
pension benefits, no increase in staff contribution rates but changes to
members' future benefits.
- Changes include raising the normal retirement age, a slower accrual
rate, pensionable pay increases capped at no more than inflation and pension
increases on retirement capped at 2.5 per cent each year, with the company and
staff to share impact of changes in life expectancy.
- In return, the airline will make a payment of GBP500 million into NAPS
after the changes are accepted.
Certain information included in this statement 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, 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 2005.