29 Provisions for liabilities and charges
| Group | |||||||
|---|---|---|---|---|---|---|---|
| £ million | Insurance provisions | Onerous lease contracts | Restoration and handback provisions | Severance | Litigation | Other | Total |
| At April 1, 2007: | |||||||
| Current | 1 | 16 | 38 | 355 | 410 | ||
| Non-current | 27 | 26 | 91 | 9 | 153 | ||
| 27 | 27 | 107 | 38 | 355 | 9 | 563 | |
| Arising during the year | 8 | 2 | 23 | 6 | 8 | 1 | 48 |
| Utilised | (7) | (11) | (32) | (153) | (203) | ||
| Release of unused amounts | (13) | (11) | (9) | (5) | (38) | ||
| Unwinding of discount | 2 | 8 | 10 | ||||
| At March 31, 2008 | 22 | 11 | 112 | 7 | 218 | 10 | 380 |
| Analysis: | |||||||
| Current | 29 | 7 | 134 | 170 | |||
| Non-current | 22 | 11 | 83 | 84 | 10 | 210 | |
| 22 | 11 | 112 | 7 | 218 | 10 | 380 | |
Company |
|||||||
| £ million | Onerous lease contracts | Restoration and handback provisions | Severance | Litigation | Other | Total | |
| At April 1, 2007: | |||||||
| Current | 16 | 34 | 355 | 405 | |||
| Non-current | 18 | 87 | 9 | 114 | |||
| 18 | 103 | 34 | 355 | 9 | 519 | ||
| Arising during the year | 2 | 23 | 6 | 8 | 1 | 40 | |
| Utilised | (6) | (11) | (30) | (153) | (200) | ||
| Release of unused amounts | (3) | (8) | (5) | (16) | |||
| Unwinding of discount | 2 | 8 | 10 | ||||
| At March 31, 2008 | 11 | 109 | 5 | 218 | 10 | 353 | |
| Analysis: | |||||||
| Current | 29 | 5 | 134 | 168 | |||
| Non-current | 11 | 80 | 84 | 10 | 185 | ||
| 11 | 109 | 5 | 218 | 10 | 353 | ||
Insurance provisions relate to provisions held by the Group’s captive insurer, Speedbird Insurance Company Limited, for incurred but not reported losses. Such provisions are held until such time as further claims are considered unlikely under the respective insurance policies.
The onerous lease provision relates partly to the sub-lease of five Jetstream 41 aircraft to Eastern Airways and six Avro RJ100 aircraft to Swiss International Air Lines. This provision will be fully utilised by October 2011. In addition, the provision includes amounts relating to properties leased by the Group that are either sub-leased to third parties or are vacant with no immediate intention to utilise the property. This provision will be fully utilised by April 2045.
Restoration and handback costs include provision for the costs to meet the contractual return conditions on aircraft held under operating leases. The provision also includes amounts relating to leased land and buildings where restoration costs are contractually required at the end of the lease. Where such costs arise as a result of capital expenditure on the leased asset, the restoration costs are also capitalised. This provision will be utilised by March 2145.
The severance provision at March 31, 2008 relates to committed voluntary severance costs expected to be paid during the next financial year.
The Company has settled $300 million (£149 million) in respect of all investigations into its cargo and passenger business in the US with the Department of Justice. It has agreed a settlement of £121.5 million with the Office of Fair Trading in respect of longhaul passenger fuel surcharges. These amounts are included within the litigation analysis above. There are ongoing investigations into the Company’s cargo surcharges by the European Commission and other jurisdictions. These investigations are likely to continue for some time. The Company is also subject to related class action claims. The final amount required to pay the remaining claims and fines is subject to uncertainty. A detailed breakdown of the remaining provision is not presented as it may seriously prejudice the position of the Company in these regulatory investigations and potential litigation.
Other provisions include staff leaving indemnities relating to amounts due to staff under various overseas contractual arrangements.