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Note 3: Segment information

a  Business segments

The Group’s network passenger and cargo operations are managed as a single business unit. The Management Board makes resource allocation decisions based on route profitability, which considers aircraft type and route economics, with only limited reference to the strength of the cargo business. The objective in making resource allocation decisions is to optimise consolidated financial results. While the operations of OpenSkies and CityFlyer are considered to be separate operating segments, their activities are considered to be sufficiently similar in nature to aggregate the two segments and report them together with the network passenger and cargo operations. Therefore, based on the way the Group treats the network passenger and cargo operations, and the manner in which resource allocation decisions are made, the Group has only one reportable operating segment for financial reporting purposes, reported as the ‘airline business’.

Financial results from other operating segments are below the quantitative threshold for determining reportable operating segments and consist primarily of Air Miles Travel Promotions Limited, British Airways Holidays Limited and Speedbird Insurance Company Limited.

For the year ended March 31, 2009

£ million Airline business All other segments Unallocated Total
Revenue        
Sales to external customers 8,840 152   8,992
Inter-segment sales 18     18
Segment revenue 8,858 152   9,010
Segment result (240) 20   (220)
Other non-operating expense (30)     (30)
(Loss)/profit before tax and finance costs (270) 20   (250)
Net finance costs 78 (59) (182) (163)
Profit on sale of assets 8     8
Share of associates’ profit 4     4
Tax     43 43
Loss after tax (180) (39) (139) (358)
Assets and liabilities        
Segment assets 10,164 115   10,279
Investment in associates 209     209
Total assets 10,373 115   10,488
Segment liabilities 3,842 381   4,223
Unallocated liabilities*     4,419 4,419
Total liabilities 3,842 381 4,419 8,642
Other segment information        
Property, plant and equipment – additions (note 15d) 643 2   645
Intangible assets – additions (excluding L’Avion – note 18c) 21     21
Purchase of subsidiary (net of cash acquired – note 6c) 34     34
Depreciation, amortisation and impairment (note 4a) 693 1   694
Impairment of available-for-sale financial asset – Flybe (note 21) 13     13
Exceptional items (note 4b):        
Restructuring 78     78
Unused tickets (note 2) (109)     (109)
Impairment of OpenSkies goodwill 5     5

* Unallocated liabilities primarily include deferred taxes of £652 million and borrowings of £3,763 million which are managed on a Group basis.

For the year ended March 31, 2008, Restated

  Continuing operations    
£ million Airline business All other segments Unallocated Total Discontinued operations* Total
Revenue            
Sales to external customers 8,570 188   8,758   8,758
Inter-segment sales 31     31   31
Segment revenue 8,601 188   8,789   8,789
Segment result 857 21   878 (2) 876
Other non-operating income 9     9   9
Profit/(loss) before tax and finance costs 866 21   887 (2) 885
Net finance income/(costs) 181 (11) (175) (5)   (5)
Profit/(loss) on sale of assets 16 (2)   14   14
Share of associates’ profit 26     26   26
Tax     (194) (194)   (194)
Profit/(loss) after tax 1,089 8 (369) 728 (2) 726
Assets and liabilities            
Segment assets 10,966 99   11,065   11,065
Investment in associates 227     227   227
Total assets 11,193 99   11,292   11,292
Segment liabilities 3,479 298   3,777   3,777
Unallocated liabilities**     4,253 4,253   4,253
Total liabilities 3,479 298 4,253 8,030   8,030
Other segment information            
Property, plant and equipment – additions (note 15d) 636 1   637   637
Intangible assets – additions (note 18c) 40     40   40
Depreciation, amortisation and impairment (note 4a) 690 2   692   692
Impairment of available-for-sale financial asset – Flybe (note 21) 6     6   6
Exceptional items (note 4b):            
Restructuring 1     1   1
Unused tickets (note 2) (36)     (36)   (36)

* As disclosed in note 5, BA Connect, which previously comprised the majority of the ‘Regional airline business’ segment, was disposed of in March 2007.

** Unallocated liabilities primarily include deferred taxes of £1,075 million and borrowings of £3,174 million which are managed on a Group basis.

b  Geographical segments – by area of original sale

  Group
£ million 2009 2008
Restated
Europe: 5,617 5,581
UK 4,197 4,362
Continental Europe 1,420 1,219
The Americas 1,719 1,697
Africa, Middle East and Indian sub-continent 875 821
Far East and Australasia 781 659
Revenue 8,992 8,758

Total of non-current assets excluding available-for-sale financial assets, employee benefit assets, derivative financial instruments and prepayments and accrued income located in the UK is £7,337 million (2008: £7,336 million) and the total of these non-current assets located in other countries is £372 million (2008: £375 million).

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