Document:

Martin Broughton
 Chairman

  

  Ms Denise Kingsmill CBE 

  British Airways Plc 

  Waterside HBA3 

  Harmondsworth 

  UB7 0GB

  

  Dear Denise

  	
  

  

  Waterside (HBB3)

  PO Box 365 Harmondsworth UB7 0GB 

  Tel +44 (0)20 8738 5107 

  Fax +44 (0)20 8738 9801

  

  1 November, 2004

  

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

Your
appointment will be for a co-opted period commencing on 1 November, 2004 until
the close of the Annual General Meeting on 19 July, 2005 followed by 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. 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.

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 AGM, one annual Board away
day, the meetings of the two Board Committee 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

	
   

  	
   

  
	   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, Baroness O’Cathain OBE, 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

www.ba.com

	
   

  	
   

  
	   Ms Denise Kingsmill
1 November, 2004

  Page 2 of 4

  	

  

haul networks. The Secretary will forward to you a schedule of meetings
for 2005. 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.

  

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.

	
   

  	
   

  
	   Ms Denise Kingsmill 

  1 November, 2004 
Page 3 of 4

  	

  

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

Indemnity and
Insurance

The 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 Secretary
will provide you with fuller details as part of your induction programme.

	
   

  	
   

  
	   Ms Denise Kingsmill 

  1 November, 2004 
Page 4 of 4

  	

  

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 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 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.

[Signature Illegible]

I confirm my agreement to the foregoing.

	
   

  	
   

  
	
  Signed:
  /s/ Denise Kingsmill 

  	
  Date: 1
  November, 2004Lord Marshall of Knightsbridge

  	
   

  
	
  Chairman

  	
  Waterside (HBB3)

  
	
   

  	
  PO Box 365 Harmondsworth UB7 0GB

  
	
   

  	
  United Kingdom Tel 0870 850 9850

  
	
   

  	
  Outside United Kingdom Tel +44 (0)191 490 7901

  

Dr M P
Read

British
Airways Plc

Waterside
HBA3

Harmondsworth

UB7 0GB

5 March, 2004

Dear Martin

NON-EXECUTIVE
DIRECTOR APPOINTMENT

As part
of our preparations to secure compliance with The Combined Code on Corporate Governance
(July 2003) (the “Combined Code”), I am writing to formally set out the terms on
which serve on 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

Your appointment as a
Non-Executive Director of the Company began on 12 May, 2000 and you were last re-elected by shareholders for a three year term
which will end at the close of the
Annual General Meeting on 18 July, 2006, 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). 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. You
have served as chairman of the Company’s Remuneration Committee since 11 July, 2000.

Time commitment

Overall
we anticipate a time commitment of fifteen days per year from our Non-Executive Directors
after an initial induction phase. This includes attendance at ten Board meetings, the AGM,
one annual Board away day and at least one site visit per year. Currently, three of
the Board meetings are held away from the Company’s head office, one each at
destinations on the domestic, short haul and long haul

	
   

  	
   

  
	
  Directors:  

  	
  Lord
  Marshall of Knightsbridge (Chairman), M F Broughton
  (Deputy Chairman), R I Eddington (Chief Executive), J F
  Rishton (Chief Financial Officer), M A Street (Director of Customer Service
  & Operations), M A van den Bergh, Dr A S
  Ganguly, Capt M D Jeffery, Baroness O’Cathain OBE, 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

  
	
   

  	
   

  
	
   

  	
  www.ba.com

  

networks.
The Secretary will shortly forward to you a schedule of meetings for 2005. 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.

  

Fees

As a
Non-Executive Director, you are paid a basic fee of £27,500 gross per annum,* to
include your membership of Board Committees, plus an additional £600 for each major Board Committee
meeting separately attended. These amounts are paid quarterly in arrears, and
will be subject to review from time to time. The level of fees

* w.e.f.
1.Ï.04 £35,000plus  committee
chairman, fee of £7,500 gross per annum.

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
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 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 the
Secretary.

Regulation

As you know, as a result of your
appointment, you became 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.

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

Insurance

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
Secretary will provide you with fuller details on request.

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 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 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: 5 March, 2004

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