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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, based primarily by reference to passenger economics with limited reference to cargo demand. The objective in making resource allocation decisions is to optimise consolidated financial results. While the operations of OpenSkies SASU (OpenSkies) and BA Cityflyer Limited (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 The Mileage Company Limited, British Airways Holidays Limited and Speedbird Insurance Company Limited.

For the year ended 31 March 2010

£ million Airline business All other segments Unallocated Total
Revenue
Sales to external customers 7,802 192 7,994
Inter-segment sales 52     52
Segment revenue 7,854 192   8,046
Segment result (252) 21 (231)
Other non-operating income 15     15
(Loss)/profit before tax and finance costs (237) 21 (216)
Net finance costs (96) (171) (267)
Loss on sale of assets (16) (16)
Share of associates’ losses (32) (32)
Tax     106 106
(Loss)/profit after tax (381) 21 (65) (425)
Assets and liabilities
Segment assets 10,364 116 10,480
Investment in associates 197     197
Total assets 10,561 116   10,677
Segment liabilities 3,413 373 3,786
Unallocated liabilities*     4,778 4,778
Total liabilities 3,413 373 4,778 8,564
Other segment information
Property, plant and equipment – additions (note 14d) 553 1 554
Non-current assets held for sale 30 30
Intangible assets – additions (note 17c) 13 13
Depreciation, amortisation and impairment (note 4a) 731 1 732
Exceptional items (note 4b):
Restructuring 85     85

*Unallocated liabilities consist of current taxes of £2 million, deferred taxes of £774 million and borrowings of £4,002 million which are managed on a Group basis.

For the year ended 31 March 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 income/(costs)* 78 (241) (163)
Profit on sale of assets 8
Share of associates’ profit 4
Tax     43 43 
(Loss)/profit after tax (180) 20 (198) (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 14d) 643 2 645 
Intangible assets – additions (excluding L’Avion – note 17c) 21 21 
Purchase of subsidiary (net of cash acquired – note 5c) 34 34 
Depreciation, amortisation and impairment (note 4a) 693 1 694 
Impairment of available-for-sale financial asset – Flybe (note 20) 13 13 
Exceptional items (note 4b):
Restructuring 78 78 
Unused tickets (note 2) (109) (109)
Impairment of OpenSkies goodwill 5    

*Reclassified to more accurately reflect the nature of the expense.

**Unallocated liabilities consist of current taxes of £4 million, deferred taxes of £652 million and borrowings of £3,763 million which are managed on a Group basis.

b  Geographical segments – by area of original sale

  Group
£ million 2010 2009
Europe: 4,891 5,617
UK 3,636 4,197
Continental Europe 1,255 1,420
The Americas: 1,651 1,719
USA 1,473 1,532
The rest of the Americas 178 187
Africa, Middle East and Indian sub-continent 731 875
Far East and Australasia 721 781
Revenue 7,994 8,992

Total of non-current assets excluding available-for-sale financial assets, employee benefit assets, prepayments and accrued income and derivative financial instruments located in the UK is £7,060 million (2009: £7,337 million) and the total of these non-current assets located in other countries is £340 million (2009: £372 million).

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