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Corporate governance statement

The directors may, in the case of shares held in certificated form, in their absolute discretion refuse to register a transfer of shares (not being fully paid shares) provided that, where any such shares are admitted to the Official List of the UK Listing Authority, such discretion may not be exercised in such a way as to prevent dealings in the shares of that class from taking place on an open and proper basis. The directors may also refuse to register a transfer of shares (whether fully paid or not) in favour of more than four persons jointly. Full details of restrictions on the transfer of shares are set out in the Company’s Articles of Association.

The directors may, in their absolute discretion, refuse to register any transfer of the special voting share whatsoever.

The shares of a person subjected to an Affected Share Notice may, subject to the specific terms of that notice, no longer confer on the holder any entitlement to exercise rights conferred by membership in relation to general meetings. This includes the rights to attend or vote, either personally or by proxy, at any general meeting of the Company, or any meeting of the holders of any class of shares. In addition, the rights to attend, speak and demand a poll which would have attached to the shares, but for the restrictions set out in the Affected Share Notice, shall vest in the Chairman of the relevant meeting.

The person on whom an Affected Share Notice has been served may also be required to dispose of the shares which are the subject of such notice, in accordance with the provisions of the Articles of Association.

Where, under the Articles of Association, a person has been served with a direction notice as a result of default for the prescribed period in providing the Company with the required information concerning interests in shares held by them, those shares shall no longer confer on the holder any right to vote, either personally or by proxy, at a general meeting of the Company, or exercise any other rights conferred by membership in relation to general meetings of the Company or meetings of the holders of any class of shares.

Additionally, if that person holds at least a 0.25 per cent interest in number or nominal value of the issued shares of that class in the Company, then the Board may also withhold payment of all or part of any dividends payable to them in respect of the shares which are the subject of the direction notice and refuse to register any transfer of such shares until such time as the default is remedied and the Board determines that the direction notice shall cease to have effect.

There may also be restrictions on the transfer of ordinary shares or on the exercise of voting rights attached to them where: (i) the Company has exercised its right to suspend their voting rights or to prohibit their transfer following the omission of their holder or any person interested in them to provide the Company with information requested by it in accordance with Part 22 of the Companies Act 1985; or (ii) their holder is precluded from exercising voting rights by the Financial Services Authority’s (FSA) listing rules or the City Code on Takeovers and Mergers.

Following its delisting from the New York Stock Exchange, the Company maintains an American Depositary Receipts (ADR) programme in the US as a Level I programme. This means that the Company’s ADRs are traded on the over-the-counter market. Each ADR is the equivalent of 10 ordinary shares and each ADR holder is entitled to the financial rights attaching to such shares, although the ADR depositary is the registered holder of the shares. As at March 31, 2009, the equivalent of 21.3 million shares were held in ADR form (March 31, 2008: 26.2 million).

Shareholders can appoint a proxy to vote on their behalf on a poll at shareholder meetings (or any adjournment thereof), either by posting the proxy form to the address set out in the notice of meeting or online via the Company’s investor relations website. Proxy appointments must be received by 11.00 am on Sunday July 12, 2009, in order to be eligible for the 2009 annual general meeting. If the shares are held in British Airways Investor Services, the Company Nominee, voting instructions must be received by 11.00 am on Saturday July 11, 2009.

In order to protect the air service operating rights of the Company, the number of ordinary shares held by non-UK nationals is monitored, as is the number of ordinary shares held by persons who are not nationals of states comprising the European Economic Area (EEA). At March 31, 2009, 34 per cent of the ordinary shares of the Company were held by non-UK nationals (March 31, 2008: 31 per cent) and 20 per cent of the ordinary shares were held by persons who were not nationals of states comprising the EEA (March 31, 2008: 19 per cent). Although there are no large interests of single or associated non-UK nationals, the directors cannot rule out the possibility that the directors may be required to exercise their powers to restrict non-UK or non-EEA share ownership in order to protect the Company’s operating rights.

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