Martin Broughton

  Chairman

  	
  

  
	
   

  	
   

  
	
   

  	
  Waterside
  (HBB3)

  
	
   

  	
  PO Box
  365 Harmondsworth UB7 0GB 

  
	
   

  	
  Tel +44
  (0)20 8738 5107

  
	
  The Rt
  Hon the Baroness Symons of Vernham Dean

  	
  Fax +44
  (0)20 8738 9801

  
	
   

  	
   

  
	

  	
 13 May,
  2005

  
	
   
  

  	
   

  
	
  Dear Liz

  	
   

  



NON-EXECUTIVE
DIRECTOR APPOINTMENT


As
discussed, I am writing formally to confirm the terms of our offer to you to
join the
Board of British Airways Plc (‘the Company’) as a Non-Executive Director. This letter sets out the terms
of your appointment and it is agreed that this is a contract for services and is not a contract of
employment.


Appointment


Subject
only to your having obtained all relevant clearances after your service as
Minister, you will be recommended by the Board for election by shareholders at
the Annual General Meeting on 19 July, 2005 for an initial term of three years
ending at the close of the Annual General Meeting in 2008, unless otherwise
terminated earlier
by and at the discretion of either party upon one month’s written notice but
subject always to the provisions of the Company’s Articles. Should you be
required to
wait longer than 19 July, your appointment will take place on the earliest date
permitted, however, the initial term will, subject as mentioned above, still
end at the close
of the Annual General Meeting in 2008. Continuation of your contract of appointment is contingent
on satisfactory performance and re-election at forthcoming Annual General Meetings. Non-Executive
Directors are typically expected to serve two three-year terms, although the
Board may invite you to serve for an additional period. It is unlikely that the
contract would be extended beyond a third term.


Board Committees


It is
normal practice for all of the Company’s Non-Executive Directors to also serve on Board Committees. On
appointment, we would like you to serve on the Safety Review Committee and the
Audit Committee. The Company Secretary will provide you with the current
terms of reference of the Board Committees separately.


	
   

  	
   

  	
   

  
	
   

  	
  Directors: 

  	
  M F
  Broughton (Chairman), R I Eddington (Chief Executive), J F Rishton
  (Chief Financial Officer),  
 M A Street OBE (Director of Customer Service & Operations), M A
  van den Bergh, Dr A S Ganguly,  
 Capt
  M D Jeffery, D P B Kingsmill CBE, Dr M P Read, A C Reed, Lord Renwick of
  Clifton  

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  British
  Airways Plc    

  Registered Office: Waterside PO Box 365
  Harmondsworth UB7 0GB    

  Registered in England No. 1777777    

  


 








	
   

  	
   

  
	
  The
  Rt Hon the Baroness Symons of Vernham Dean 

  13
  May, 2005
Page 2 of 4

  	
  

  



Time commitment


Overall
we anticipate a time commitment of fifteen days per year after the induction
phase. This will include attendance at eight Board meetings, the Annual General
Meeting,
one annual Board away day, the meetings of the two Board Committees and at least one site visit per year. In
recent years, up to three of the Board meetings have been held away from the Company’s head office, one each at
destinations on the domestic, short
haul and long haul networks. The Company Secretary will forward to you a schedule of meetings for 2005 and
2006. In addition, you will be expected
to devote appropriate preparation time ahead of each meeting. By accepting this appointment, you have confirmed that
you are able to allocate sufficient
time to meet the expectations of your role. The agreement of the Chairman should be sought before accepting
additional commitments that might affect the time you are able to devote to
your role as a Non-Executive Director of the Company.


Role


Non-Executive
Directors have the same general legal responsibilities to the Company as any other Director. The Board as a
whole is collectively responsible for promoting the success of the Company by
directing and supervising the Company’s affairs. All Directors must take
decisions objectively in the interests of the Company. The Board:


	
   

  	
   

  	
   

  
	
   

  	
  •

  	
  provides
  entrepreneurial leadership of the Company within a framework of prudent and
  effective controls which enable risk to be assessed and managed;

  
	
   

  	
  •

  	
  sets the Company’s strategic aims, ensures that the necessary financial and
  human resources are in place for the Company to meet its objectives,
  and reviews management performance; and

  
	
   

  	
  •

  	
  sets the Company’s values and standards and ensures
  that its obligations to its shareholders and others are understood and met. 

  



In
addition to these requirements of all Directors, the role of the non-executive
has the following key
elements:


	
   

  	
   

  	
   

  
	
   

  	
  •

  	
  Strategy: 
  Non-Executive Directors should constructively challenge and contribute to the
  development of strategy;

  
	
   

  	
  •

  	
  Performance: 
  Non-Executive Directors should scrutinise the performance of
  management in meeting agreed goals and objectives and monitor the reporting
  of performance;

  
	
   

  	
  •

  	
  Risk: 
  Non-Executive Directors should satisfy themselves as to the integrity of financial
  information, that financial controls are sound and that the systems of risk management are
  robust and defensible; and

  
	
   

  	
  •

  	
  People:  Non-Executive
  Directors, through the Remuneration Committee, are responsible for determining appropriate levels of remuneration of Executive
Directors and have a prime role in
  appointing, and where necessary
  removing, senior management and in succession planning.

  












	
   

  	
   

  
	
  The Rt
  Hon the Baroness Symons of Vernham
  Dean 

  13
  May, 2005

Page 3 of 4

  	
  

  



Fees


You will
be paid a fee of £35,000 gross per annum, to include your membership of Board Committees. This
will be paid quarterly in arrears, and will be subject to review from time to time.
The level of fees for our Non-Executive Directors (other than the Chairman) is
determined by the Executive Directors on the recommendation of the Chairman. The Company will
reimburse you for all reasonable
and properly documented expenses you incur in performing the duties of your office.


Outside interests


It is
accepted and acknowledged that you have business interests other than those of the Company and have
declared any conflicts that are apparent at present. In the event that you become aware of any potential
conflicts of interest, these should be disclosed
to the Chairman and Company Secretary as soon as apparent.


The
Board of the Company has determined you to be independent (i) according to provision A.3.1 of The
Combined Code on Corporate Governance (July 2003) and (ii) for the purposes of
the Corporate Governance Rules proposed by the New York Stock Exchange (October 2003).


Confidentiality


All
information acquired during your appointment is confidential to the Company and should not be
released, either during your appointment or following termination (by whatever
means), to third parties without prior clearance from the Chairman.


Your
attention is also drawn to the requirements under both legislation and regulation as to the
disclosure of price sensitive information. Consequently you should avoid making any statements that might
risk a breach of these requirements without
prior clearance from the Chairman or Company Secretary.


Induction


As a
result of your appointment, you will become subject to the Company’s policies
on Insider Dealing, Business Conduct and Price Sensitive Information as well as
to the provisions of the City Code on Takeovers, the Listing Rules and the
regulations of the two
stock exchanges. Immediately after appointment, therefore, the Company Secretary will arrange for a comprehensive, formal
and tailored induction covering these
and other areas. He will also arrange for site visits and meetings with senior and middle management and the Company’s auditors.
Should it be deemed appropriate, he
will also arrange for you to meet some of our major investors in the first
twelve months of your appointment.


Review process


The
performance of individual Directors and the whole Board and its Committees is evaluated annually. If, in the interim, there
are any matters which cause you concern










	
   

  	
   

  
	
  The Rt Hon the Baroness
  Symons of Vernham Dean 

  13 May, 2005
Page 4 of 4

  	
  

  



about
your role you should discuss them with the Chairman as soon as is appropriate.


Indemnity and Insurance


The Company Secretary will
arrange for the execution of a deed of indemnity in your favour in relation to this appointment. The Company
has Directors’ and Officers’ liability
insurance and it is intended to maintain such cover for the full term of your appointment. The current indemnity limit is £100
million in aggregate. The Company
Secretary will provide you with fuller details as part of your induction programme.


Independent professional advice


Occasions
may arise when you consider that you need professional advice in the furtherance of your duties as a Director.
Circumstances may occur when it will be appropriate
for you to seek advice from independent advisors at the Company’s expense.
This should be obtained in accordance with the Board’s agreed procedure details of which the Company Secretary will
provide as part of your induction. The Company will reimburse the full cost of expenditure
incurred in accordance with the policy.


Further information


The
Company Secretary will write to you separately with the additional information referred to in this letter and he will also
cover the other formal matters which have to be
dealt with in connection with your appointment.


I trust
this letter sets out the agreed basis of your appointment and I should be grateful if you formally
confirm your acceptance of the appointment and agreement to the terms as soon as convenient by signing
and returning the enclosed duplicate letter.


Yours
sincerely,


[Signature Illegible]


I confirm my agreement to the foregoing.


Signed:  [Signature Illegible]                                                            Date: 13
May, 2005