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Our Key Performance Indicators

KPI

Financial

How is it measured?

Operating margin

What does this mean and why is it key to our strategy?

We must achieve a consistently strong financial performance if we are to continue investing in the future success of the business and provide adequate shareholder returns. Operating margin is the main way we measure our financial performance. In 2002 we set ourselves the goal of achieving a 10 per cent operating margin through the economic cycle and in 2007/08 we delivered this for the first time in our history.

Achievements in 2008/09

2008/09 was expected to be a tough year financially, given record fuel prices, and we expected a reduction in operating margin. The rapid decline in the global economic situation led us to revise our forecasts through the year. The economic recession that has followed has been severe, far more so than most had predicted. It has hit demand for air travel significantly, particularly premium business. That, coupled with record fuel prices in the early part of the year, has meant that we posted an operating loss of £220 million for the year, down £1,098 million from the previous year.

Performance over time

KPI financial

KPI

Customers

How is it measured?

Customer recommendation

What does this mean and why is it key to our strategy?

Customer recommendation is a key measure of our success. Our Global Performance Monitor (GPM) survey, an onboard customer survey, together with a follow-up online survey on the arrivals process, provides monthly insights into customers’ views. The survey is carried out by an independent market research company and involves more than 57,000 customers each month. The customer recommendation measure is based on the percentage of customers who, when surveyed, were very, or extremely likely to recommend British Airways to friends, family or colleagues. Apart from being extremely important in its own right, we believe that this measure indicates how the customer experience will affect future profitability.

Achievements in 2008/09

For 2008/09 we targeted a level of customer recommendation (the proportion of customers very or extremely likely to recommend British Airways) of 62 per cent. The move to Terminal 5 and the brilliant operational performance that we have delivered across our network as a result of this, drove a recommendation score of 65 per cent. This is the result of an increasing trend through the year and in March 2009 we achieved our highest monthly recommendation score (70 per cent) since we began tracking this in April 2002.

Performance over time

KPI customers

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