a Group

Ł million	Fleet	Property	Equipment	Group total
Cost
Balance at April 1, 2006	11,318	1,427	780	13,525
Additions (note 14d)	258	62	19	339
Disposals	(344)	(63)	(66)	(473)
Reclassifications	10		20	30
Reclassifications to assets held for sale (note 16)	(19)	(28)		(47)
Balance at March 31, 2007	11,223	1,398	753	13,374
Additions (note 14d)	428	122	87	637
Disposals	(262)	(12)	(36)	(310)
Balance at March 31, 2008	11,389	1,508	804	13,701
Depreciation and impairment
Balance at April 1, 2006	4,712	453	478	5,643
Charge for the year	640	87	47	774
Disposals	(267)	(55)	(64)	(386)
Impairment		3		3
Reclassifications	1	1	20	22
Reclassifications to assets held for sale (note 16)	(16)	(23)		(39)
Balance at March 31, 2007	5,070	466	481	6,017
Charge for the year	542	72	47	661
Disposals	(199)	(7)	(34)	(240)
Balance at March 31, 2008	5,413	531	494	6,438
Net book amounts
March 31, 2008	5,976	977	310	7,263
March 31, 2007	6,153	932	272	7,357
Analysis at March 31, 2008
Owned	2,572	952	300	3,824
Finance leased	1,728			1,728
Hire purchase arrangements	1,549			1,549
Progress payments	127	25	10	162
	5,976	977	310	7,263
Analysis at March 31, 2007
Owned	2,533	836	250	3,619
Finance leased	1,699			1,699
Hire purchase arrangements	1,819			1,819
Progress payments	102	96	22	220
	6,153	932	272	7,357

The net book amount of property comprises:

	2008	2007
	Group total
Freehold	274	282
Long leasehold improvements	256	261
Short leasehold improvements*	447	389
	977	932

* Short leasehold improvements relates to leasehold interests with a duration of less than 50 years.

As at March 31, 2008 bank and other loans of the Group are secured on fleet assets with a cost of £477 million (2007: £477 million), and letters of credit of £330 million in favour of the British Airways Pension Trustees are secured on certain aircraft (2007: £380 million).

Included in the cost of tangible assets for the Group is £345 million (2007: £330 million) of capitalised interest.

b Company

Ł million	Fleet	Property	Equipment	Company total
Cost
Balance at April 1, 2006	10,749	1,337	705	12,791
Additions	255	62	19	336
Disposals	(120)	(61)	(55)	(236)
Transfers to subsidiary companies			(1)	(1)
Reclassifications	10		20	30
Reclassifications to assets held for sale (note 16)	(19)	(28)		(47)
Balance at March 31, 2007	10,875	1,310	688	12,873
Additions	427	121	81	629
Disposals	(260)	(10)	(33)	(303)
Balance at March 31, 2008	11,042	1,421	736	13,199
Depreciation and impairment
Balance at April 1, 2006	4,517	423	413	5,353
Charge for the year	536	84	43	663
Disposals	(120)	(54)	(53)	(227)
Transfers to subsidiary companies			(1)	(1)
Impairment		3		3
Reclassifications	1	1	20	22
Reclassifications to assets held for sale (note 16)	(16)	(23)		(39)
Balance at March 31, 2007	4,918	434	422	5,774
Charge for the year	527	70	45	642
Disposals	(197)	(7)	(32)	(236)
Balance at March 31, 2008	5,248	497	435	6,180
Net book amounts
March 31, 2008	5,794	924	301	7,019
March 31, 2007	5,957	876	266	7,099
Analysis at March 31, 2008
Owned	2,394	899	292	3,585
Finance leased	1,728			1,728
Hire purchase arrangements	1,549			1,549
Progress payments	123	25	9	157
	5,794	924	301	7,019
Analysis at March 31, 2007
Owned	2,338	780	244	3,362
Finance leased	1,698			1,698
Hire purchase arrangements	1,819			1,819
Progress payments	102	96	22	220
	5,957	876	266	7,099

The net book amount of property comprises:

	2008	2007
	Company total
Freehold	226	232
Long leasehold improvements	256	261
Short leasehold improvements*	442	383
	924	876

* Short leasehold improvements relate to leasehold interests with a duration of less than 50 years.

As at March 31, 2008 bank and other loans of the Company are secured on fleet assets with a cost of £404 million (2007: £404 million).

Included in the cost of tangible assets for the Company is £343 million (2007: £327 million) of capitalised interest.

c Depreciation

Fleets are generally depreciated over periods ranging from 18 to 25 years after making allowance for estimated residual values. Effective annual depreciation rates resulting from those methods are shown in the following table:

Per cent	2008	2007
	Group
Boeing 747-400 and 777-200	3.7	3.7
Boeing 767-300	4.8	4.9
Boeing 757-200	4.4	4.4
Airbus A321, A320, A319, Boeing 737-400	4.9	4.9

For engines maintained under ‘Power-by-the-hour’ contracts, the depreciation lives and residuals are the same as for the aircraft fleets to which the engines relate. For all other engines, the engine core is depreciated to residual value over the average remaining life of the related fleet.

Major overhaul expenditure is depreciated over periods ranging from 54 to 78 months, according to engine type. During the year, the Group changed the depreciation period for the RB211 engine, used on Boeing 747 and 767 fleets, from 54 months to 78 months. The change resulted in a £32.5 million decrease in annual depreciation charge for this engine type.

Property, apart from freehold land, is depreciated over its expected useful life subject to a maximum of 50 years. Equipment is depreciated over periods ranging from four to 20 years, according to the type of equipment.

d Analysis of Group tangible asset additions

Ł million	Fleet	Property	Equipment	2008	2007
				Group total
Cash paid	434	106	56	596	331
Capitalised interest	4	11		15	5
Accrual movements	(10)	5	31	26	3
	428	122	87	637	339

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