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Note 5: Discontinued operations

On November 3, 2006, the Group announced that it had reached an agreement in principle to sell the regional operation of its subsidiary airline BA Connect to the Flybe Group Limited (Flybe). The acquisition of BA Connect by Flybe excluded the London City airport routes and the BA Connect-operated service from Manchester to New York. The disposal was completed on March 5, 2007. The business sold comprised the majority of the ‘Regional airline business’ segment as disclosed in the financial statements for the year ended March 31, 2006.

The £2 million loss from discontinued operations for the year ended March 31, 2008, is attributed to the resolution of uncertainties that arose from the terms of the disposal transaction, primarily adjustments to the restructuring provision previously reported within discontinued operations.

Reconciliation of the tax charge relating to discontinued operations

The tax credit for the year on the loss from discontinued operations is less than the notional tax credit on those losses calculated at the UK corporation tax rate of 28 per cent (2008: 30 per cent). The differences are explained below:

  Group
£ million 2009 2008
Accounting loss before income tax from discontinued operations (2)
Accounting loss multiplied by standard rate of corporation tax in the UK of 28 per cent (2008: 30 per cent)   (1)
Effects of:    
Non-deductible expenses   1
Total tax credit on discontinued operations for the year