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Note 29: Provisions for liabilities and charges

  Group
£ million Insurance provisions Onerous lease contracts Restoration and handback provisions Restructuring Litigation Other Total
At 1 April 2009
Current 24 21 137 182
Non-current 32 9 87   115 13 256
32 9 111 21 252 13 438
Arising during the year 3 14 101 18 21 157
Utilised (2) (14) (81) (27) (21) (145)
Release of unused amounts (17) (1) (9) (16) (43)
Exchange (2) (2) (6) (10)
Other movements 3 3
Unwinding of discount     1   18   19
At 31 March 2010 13 9 101 28 255 13 419
Analysis:
Current 10 28 222 260
Non-current 13 9 91   33 13 159
  13 9 101 28 255 13 419
  Company
£ million Onerous lease contracts Restoration and handback provisions Restructuring Litigation Other Total
At 1 April 2009
Current 22 21 137 180
Non-current 4 83   115 13 215
4 105 21 252 13 395
Arising during the year 3 12 101 18 21 155
Utilised (11) (81) (27) (21) (140)
Release of unused amounts (1) (9) (16) (26)
Exchange (2) (6) (8)
Other movements 3 3
Unwinding of discount   1   18   19
At 31 March 2010 6 96 28 255 13 398
Analysis:
Current 7 28 222 257
Non-current 6 89   33 13 141
  6 96 28 255 13 398

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 utilised or such time as further claims are considered unlikely under the respective insurance policies.

The onerous lease provision relates to the sub-lease of 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 2037.

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 2051.

The Group recognised a restructuring provision of £28 million at 31 March 2010 (2009: £21 million) including targeted voluntary severance schemes announced during the year. This provision is expected to be paid during the next financial year.

There are ongoing investigations into the Group’s passenger and 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.

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