The way we run our business (564kb pdf) - British Airways
The way we run our business (564kb pdf) - British Airways
The way we run our business (564kb pdf) - British Airways
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36 / <strong>British</strong> Air<strong>way</strong>s 2008/09 Annual Report and Accounts<strong>The</strong> <strong>way</strong> <strong>we</strong> <strong>run</strong> <strong>our</strong> <strong>business</strong><strong>The</strong> workplace continued“Change must start atthe top and during theyear <strong>we</strong> reorganised<strong>our</strong> top managementteam, comprising ninedirectorate heads, ledby the Chief Executive.”mobility, <strong>we</strong> have clarified individual andcollective roles and responsibilities andnow publish accountabilities for all of <strong>our</strong>top managers on <strong>our</strong> intranet.Leadership developmentWe need great leaders to help us contendwith current trading conditions and achieve<strong>our</strong> long-term vision. A leading globalpremium airline must be bold and highlyeffective in developing present andpotential leaders.This is why <strong>we</strong> introduced <strong>our</strong> HighPerformance Leadership (HPL) systemduring the year. This is an integratedsystem, linking <strong>business</strong> strategy, objectivesetting, performance assessment,development and reward. Focused initiallyon the senior leaders, HPL has rigorousassessment mechanisms to identifytalented leaders and to provide themwith the right tools and support tocontinue developing.We have also defined, communicated andbegun to measure individual performanceagainst three capabilities <strong>we</strong> think <strong>we</strong>need in <strong>our</strong> leaders, in addition tooperational excellence:• Communicating a common vision;• Agreeing accountabilities; and• Motivating and inspiring others.For each capability, specific behavi<strong>our</strong>shave been developed so that leadersunderstand exactly what is expected ofthem and <strong>we</strong> are supporting them witha range of development programmes,including executive coaching, networks,forums and external c<strong>our</strong>ses. We arealso using new techniques to measureperformance. <strong>The</strong>se will allow us tomonitor individual progress and track <strong>our</strong>own overall success at managing talent.Among the other leadership initiatives<strong>we</strong> launched <strong>we</strong>re:• Behavi<strong>our</strong>s for Success – a leadershipdevelopment programme for the HPLcommunity, focusing on understandingand developing personal leadershipperformance;• Leadership Matters – a scheme toidentify and develop leaders who havepivotal roles in the Customer andOperations areas of <strong>our</strong> <strong>business</strong>; and• A Leadership Development Portfoliothat will be introduced this year with theaim of supporting current and potentialleaders at every level of the <strong>business</strong>,including emerging leaders, those on afast track to senior positions and thosewith strategic roles at the very top of<strong>our</strong> organisation.<strong>The</strong> management of <strong>our</strong> <strong>business</strong>Change must start at the top and duringthe year <strong>we</strong> reorganised <strong>our</strong> topmanagement team, comprising ninedirectorate heads, led by the ChiefExecutive. It is now split into two groups –the Management Board and the Customerand Operations Executive.<strong>The</strong> Management Board, which meets<strong>we</strong>ekly, is responsible for the vision andstrategic direction of the Company.<strong>The</strong> Customer and Operations Executiveis accountable for day-to-day customerservice, operational performance andensuring the highest standards of safety.This group also meets <strong>we</strong>ekly.Legal, director of safety and security anddirector of investments also report to theChief Executive.
<strong>British</strong> Air<strong>way</strong>s 2008/09 Annual Report and Accounts / 37Overview Our <strong>business</strong>Our restructuring effort has made us more efficient. It has alsohelped us identify and draw on new talent in the <strong>business</strong>, helpedby the fact that <strong>we</strong> are now enc<strong>our</strong>aging more people to movebet<strong>we</strong>en functions to gain wider experience and find new outletsfor their skills. To support greater mobility, <strong>we</strong> have clarifiedindividual and collective roles and responsibilities and now publishaccountabilities for all of <strong>our</strong> top managers on <strong>our</strong> intranet.Corporate governance Financial statements
<strong>British</strong> Air<strong>way</strong>s 2008/09 Annual Report and Accounts / 39Overview Our <strong>business</strong>We are proud to be a <strong>business</strong> that <strong>we</strong>lcomes and nurtures difference.Diversity and inclusion are a <strong>way</strong> of life for us.Our diversity initiatives are all about dignity and respect. <strong>The</strong>y are designedto promote good relationships bet<strong>we</strong>en colleagues, irrespective of theirbackground, religion or culture. As part of <strong>our</strong> annual diversity <strong>we</strong>ek, a seriesof events <strong>we</strong>re held to raise awareness and promote a more positive andproductive work environment.Corporate governance Financial statements
<strong>British</strong> Air<strong>way</strong>s 2008/09 Annual Report and Accounts / 41We carried out consultations with anumber of groups within the <strong>business</strong> tosee where <strong>we</strong> could improve efficiencyand this has led to some beneficialchanges in work practices and roles. <strong>The</strong>areas affected by restructuring included:• Customer relations;• Gatwick ramp and customer services;• <strong>British</strong> Air<strong>way</strong>s World Cargo;• Glasgow cabin crew base; and• Manchester engineering base.During the year <strong>we</strong> fundamentally changedthe <strong>way</strong> <strong>we</strong> organise <strong>our</strong> human res<strong>our</strong>ces(HR) management. We introduced HRBusiness Partners who now focus on goodpeople management and employeerelations and are responsible for day-todayindustrial relations matters. <strong>The</strong> centralindustrial relations team was consequentlyscaled back and given a more strategicrole. To support this change <strong>we</strong> ran anumber of bespoke industrial relationstraining c<strong>our</strong>ses to improve understandingand practice.Engaging <strong>our</strong> colleaguesWe ensure that colleagues are kept <strong>we</strong>llinformed about <strong>our</strong> Company, customersand industry by using comprehensiveinternal communications. Face-to-facecommunication is <strong>our</strong> priority and <strong>we</strong> <strong>run</strong>regular briefings across the Company sothat as many people as possible can meet,question and share ideas with senior andline managers. We <strong>run</strong> workshops tosupport managers in communicating keyannouncements and also online forumsand an online Ideas Exchange toenc<strong>our</strong>age wider dialogue. Othercommunication channels include apersonalised intranet, mobile SMSmessaging, video and a range ofCompany-wide and local newsletters.In 2008/09 <strong>we</strong> saw a sea change in the<strong>way</strong> people within <strong>our</strong> <strong>business</strong> think aboutworking here. Our Speak Up! attitudesurvey in the autumn of 2008 recordedsignificant improvements in scores forpride, service and product advocacy,and satisfaction with basic conditions.<strong>The</strong> results reflect the positive <strong>way</strong>colleagues feel about <strong>our</strong> move toTerminal 5 and <strong>our</strong> improved performance.Enc<strong>our</strong>agingly, the number of peopleresponding to the survey rose too,indicating that more employees regardthis as an important means of expressingtheir opinions.To make the survey more effective, <strong>we</strong> wantto ensure that changes are implemented asa result. All managers are now being given aclear responsibility to plan actions basedon survey findings in an open andtransparent <strong>way</strong>. Next year <strong>we</strong> will <strong>run</strong> thesurvey more frequently during the year,so that managers get regular feedback onchanges in colleague opinion.2009/10 will also see the launch of anEngagement Index. Building on Speak Up!results, this will help identify howmanagers can increase levels ofengagement within their teams.Employment tribunalsDuring 2008/09, the Group was servedwith 74 new proceedings in employmenttribunals. <strong>British</strong> Air<strong>way</strong>s Plc was therespondent in all but three of theproceedings. <strong>The</strong> other three are againstBA Avionic Engineering, CityFlyer andBA Maintenance Cardiff. This remains alow figure given <strong>our</strong> relative size. Of the74 proceedings:• We lost no tribunal claims in the year;• We did lose a preliminary hearing,currently being appealed, concerning therights of staff employed and resident inHong Kong to pursue discriminationclaims in the UK;• Six claims involved multiple claimants,including two, on how holiday pay shouldbe calculated under Civil Aviation(Working Time) Regulations, brought onbehalf of some 13,000 pilots and cabincrew members;• Claims including a discrimination elementoutnumbered those for unfair dismissalfor the second year. <strong>The</strong>re <strong>we</strong>re 19 unfairdismissal claims, about the same as in2007/08; and• A total of 47 claims for discrimination ordiscrimination and other matters <strong>we</strong>relodged, a 60 per cent increase on theyear before. Of these, 31 are ongoing,12 <strong>we</strong>re settled and f<strong>our</strong> withdrawn,won by <strong>British</strong> Air<strong>way</strong>s or struck out.“We negotiate with atotal of three tradeunions representingcolleagues across the<strong>business</strong>. We seek towork constructivelywith colleagues andtheir representativesto improve productivityand performance.”Overview Our <strong>business</strong> Corporate governance Financial statements
42 / <strong>British</strong> Air<strong>way</strong>s 2008/09 Annual Report and Accounts<strong>The</strong> <strong>way</strong> <strong>we</strong> <strong>run</strong> <strong>our</strong> <strong>business</strong><strong>The</strong> marketplace“Later this year <strong>we</strong> willintroduce a new Firstcabin and the new aircraft<strong>we</strong> have on order will allowus to introduce furtherinnovations including newseating in World TravellerPlus and World Traveller.”CustomersOur customers are at the heart ofeverything <strong>we</strong> do. Our overriding aim isto make sure <strong>we</strong> offer an upgraded serviceto everyone who chooses to fly with us.We talk constantly to large numbers ofcustomers to get a real understandingof their needs, each month surveyingaround 57,000 of them through <strong>our</strong>global performance feedback survey.By doing this <strong>we</strong> get a close and accuratereading of how <strong>our</strong> customers’ needs arechanging and <strong>we</strong> are able to constantlyimprove their travelling experience. This isvital for us to to secure <strong>our</strong> position as theworld’s leading global premium airline.Service and trainingOur people play a crucial role in providingthe upgraded travel experience. We arecommitted to excellent service and areinvesting heavily in training customerfacingcolleagues. Putting the customerat the heart of everything <strong>we</strong> do is also akey priority of <strong>our</strong> Compete 2012 changeprogramme, described in detail on page 28.<strong>The</strong>se training programmes will continuein 2009, supplemented by service styletraining for <strong>our</strong> ground team at Heathrowand coaching for people in <strong>our</strong> contactcentres in how to provide a more attentiveand personal service.Following the introduction of new corporatevalues last year, all training programmeshave been redesigned. <strong>The</strong> behavi<strong>our</strong>sare woven into all <strong>our</strong> c<strong>our</strong>ses to ensurecolleagues, particularly those in customerfacingroles, meet <strong>our</strong> high standards.During the year <strong>we</strong> delivered over215,000 days of training. This includedtraining days for cabin crew to enable themto deliver the highest level of premiumservice to <strong>our</strong> customers, and for groundstaff to support the continued phasedmoves to Terminals 5 and 3 at Heathrow.Ground experienceTerminal 5 continues to impress <strong>our</strong>customers. <strong>The</strong>y are enjoying improvedpunctuality, shorter check-in times and analtogether smoother travelling experience.Around 21 million customers used theterminal during the year and customersatisfaction has increased noticeably sinceopening. In direct response to customerfeedback, <strong>we</strong> have further improved theexperience since opening, for instanceby introducing a dedicated premiumcheck-in zone.<strong>The</strong> luxurious lounge complex at Terminal 5has also been exceptionally <strong>we</strong>ll received,with an increase of over 20 percentagepoints in customer satisfaction. <strong>The</strong> newlounges offer greatly improved facilities,including wine bars, spa treatments, deliciousfood and upgraded communication links.We are now introducing similarly themedlounges across <strong>our</strong> network.Onboard experience<strong>The</strong> new Club World cabin layout wasintroduced on <strong>our</strong> Boeing 747 aircraft in2007/08 and the roll-out was completedlast year. Combining new levels of comfort,greater privacy and choice, the layouthas achieved an increase in customersatisfaction, of over 20 percentage points.We are now rolling out the new cabinon <strong>our</strong> Boeing 777 aircraft.Later this year <strong>we</strong> will introduce a newFirst cabin and the new aircraft <strong>we</strong> haveon order will allow us to introduce furtherinnovations including new seating in WorldTraveller Plus and World Traveller. Our newLondon City to New York JFK service willuse Airbus A318 aircraft in an all-premium,32-seat layout. This service is the firstnorth Atlantic service from London Cityairport, and it will offer customers fullmobile text and data services.<strong>The</strong> new on-demand in-flight entertainmentsystem has also been <strong>we</strong>ll received.Customers like the increased flexibilityand the wider choice of movies, TVprogrammes, audio and interactive games.We have improved the onboardexperience for <strong>our</strong> premium shorthaulcustomers, offering them greater space
<strong>British</strong> Air<strong>way</strong>s 2008/09 Annual Report and Accounts / 43Overview Our <strong>business</strong>Terminal 5 continues to impress <strong>our</strong> customers. <strong>The</strong>y areenjoying improved punctuality, shorter check-in times andan altogether smoother travelling experience.Around 21 million customers used the terminal during theyear and customer satisfaction has increased noticeably sinceopening. In direct response to customer feedback, <strong>we</strong> havefurther improved the experience since opening, for instanceby introducing a dedicated premium check-in zone.Corporate governance Financial statements
44 / <strong>British</strong> Air<strong>way</strong>s 2008/09 Annual Report and Accounts<strong>The</strong> <strong>way</strong> <strong>we</strong> <strong>run</strong> <strong>our</strong> <strong>business</strong><strong>The</strong> marketplace continued“During a recent survey,two thirds of respondentsrated ba.com as Excellentor Very Good – proof that<strong>our</strong> creative development ofthe <strong>we</strong>bsite is providing realvalue to <strong>our</strong> customers.”Average paymentperformance91%of payments <strong>we</strong>re on time inthe UK.and privacy by keeping the middle seatfree. Also, <strong>we</strong> have not forgotten <strong>our</strong>youngest passengers who can now enjoyan entertainment pack on longhaul flightsfeaturing that much-loved character,Paddington Bear.ba.comba.com – <strong>our</strong> online portal – is not onlybecoming more popular with customers,it is also helping us to drive down costsand increase revenues.Almost a third of all <strong>our</strong> bookings are nowmade on ba.com, with almost half of allEuropean leisure fares sold via the UK site.This year <strong>we</strong> introduced a new featureallowing customers to upgrade theirbooking at any time bet<strong>we</strong>en buying aticket and checking-in online.A large number of <strong>our</strong> passengers nowcheck-in online. <strong>The</strong>y clearly enjoy theconvenience of this service. For thatreason <strong>we</strong> have now launched a popularnew service, allowing customers tocheck-in or access real time arrivalsand departures information throughtheir mobiles.During a recent survey, two thirds ofrespondents rated ba.com as Excellentor Very Good – which is proof that <strong>our</strong>creative development of the <strong>we</strong>bsite isproviding real value to <strong>our</strong> customers.CargoBA World Cargo continues to focuson providing premium products. Wehave improved the ‘Prioritise’ (express)service through advancements in thenew ‘cool chain’ technology. New servicessuch as scanning for airmail and directairport-to-door deliveries are just someof the improved solutions <strong>we</strong> are nowoffering shippers.BA World Cargo also continues to play aleading role in simplifying the internationalsupply chain. We are fully committed tothe IATA coordinated e-freight initiative.Not only have <strong>we</strong> played an important rolein formulating guidance for participatingairlines, <strong>we</strong> <strong>we</strong>re also the first Europeancarrier to use e-freight bet<strong>we</strong>en Heathrowand New York.Overseas branchesWe fly to a number of destinations aroundthe world (see inside front cover). Inaddition to the overseas branches <strong>we</strong> haveestablished in many of these countries,<strong>we</strong> have branches in countries to which<strong>we</strong> do not fly.Suppliers, partners andalliancesSuppliersOverall supplier costs, excluding fuel,<strong>we</strong>re up nearly 7 per cent year on year,reflecting significant inflationary pressureson suppliers’ own costs. In continuing tocontrol <strong>our</strong> costs, <strong>we</strong> have decided toprioritise those projects that really addvalue to the customer proposition.Goods and services are procured througha strategic s<strong>our</strong>cing process. We usebenchmarking principles to make sure<strong>we</strong> derive the maximum value from them,both at the point of purchase and over thelife of the supply contract.During the year <strong>we</strong> signed major in-flightcatering agreements with three suppliers,all of which will come into effect from April1, 2010. We believe these agreements willset a new benchmark for high-qualityairline catering. Using three suppliers willalso help us to minimise <strong>our</strong> exposure tosupplier failure.We continued to reduce <strong>our</strong> carbonfootprint with the delivery of the firstof <strong>our</strong> new Boeing 777 aircraft duringthe year. Lo<strong>we</strong>r fuel burn and reducedenvironmental impact <strong>we</strong>re key factorsin <strong>our</strong> choice of aircraft.In addition, <strong>we</strong> have selected the Thalesin-flight entertainment system for all newaircraft delivered from 2010. With biggerscreens, the multimedia system will givecustomers access to over 100 movies,300 programmes and 400 CDs as <strong>we</strong>ll asa range of radio programmes and podcasts
<strong>British</strong> Air<strong>way</strong>s 2008/09 Annual Report and Accounts / 45Overview Our <strong>business</strong>Almost a third of all <strong>our</strong> bookings are now made on ba.com,with almost half of all European leisure fares sold via the UK site.This year <strong>we</strong> introduced a new feature allowing customers toupgrade their booking at any time bet<strong>we</strong>en buying a ticket andchecking-in online.A large number of <strong>our</strong> passengers now check-in online. <strong>The</strong>yclearly enjoy the convenience of this service. For that reason <strong>we</strong>have now launched a new popular service, allowing customers tocheck-in or access real time arrivals and departures informationthrough their mobiles.Corporate governance Financial statements
46 / <strong>British</strong> Air<strong>way</strong>s 2008/09 Annual Report and Accounts<strong>The</strong> <strong>way</strong> <strong>we</strong> <strong>run</strong> <strong>our</strong> <strong>business</strong><strong>The</strong> marketplace continued“We are committed tomaking responsiblepurchasing decisions, andduring 2008/09 startedto refine <strong>our</strong> purchasingprocess and train <strong>our</strong>procurement team tomake sure this happens.”whenever they want. <strong>The</strong> system is lighterso will also help us reduce aircraft <strong>we</strong>ightand use less fuel.Supplier riskMitigating supplier risk is a key priority,particularly in the current economicclimate. Our procurement team recordsand measures risk across <strong>our</strong> mostimportant suppliers. We have currentlyidentified a number of suppliers who, ifthey ceased trading or experienced severedifficulties, would have a serious impact on<strong>our</strong> ability to operate. For these suppliers,risk is measured across five dimensions,updated each month and <strong>we</strong> takemitigating action when any supplieris deemed to be in trouble.In addition to managing supplier risks, <strong>we</strong>also routinely monitor the financial healthof critical suppliers using monthly Dun &Bradstreet company reports as an earlywarning system.We use <strong>business</strong> continuity plans to coverthe risk of supply failures and regularlyreview their effectiveness with the suppliersthemselves. Equally, <strong>we</strong> make sure effectivecontingency plans are in place to respondto any supply interruption.Payment performanceWe have again made good progress onpaying suppliers in accordance with <strong>our</strong>agreed terms. On average, 91 per centof payments <strong>we</strong>re on time in the UKfor the year ended March 31, 2009.This compares with 88 per cent in thepreceding year and exceeds <strong>our</strong> 90 percent target. Next year <strong>we</strong> expect toimprove further through increased useof e-invoicing and purchasing cards.We are a signatory to the Confederationof <strong>British</strong> Industry (CBI) code of practiceon supplier payment and are committedto paying <strong>our</strong> suppliers on agreed terms.<strong>The</strong> number of days’ purchases in creditorsat March 31, 2009, is calculated inaccordance with the provisions of theCompanies Act 1985 and was 32 days(2008: 33 days).Corporate responsibility in thesupplier baseWe are committed to making responsiblepurchasing decisions, and during 2008/09started to refine <strong>our</strong> purchasing processand train <strong>our</strong> procurement team to makesure this happens. We will continue tosurvey potential suppliers to assess theircorporate responsibility credentials, usingindependently-held, self-certification datawhen deciding with which suppliers to work.Procurement deliveryUsing preferred suppliers helps usto control costs. In December 2008,96 per cent of <strong>our</strong> external spendwas with 500 suppliers who haveall been awarded formal preferredsupplier status. Increasingly <strong>we</strong> arealso making sure <strong>our</strong> spend goesthrough <strong>our</strong> approved order-basedprocess. In December 2008, 99 percent of spend was approved this <strong>way</strong>.Partners and alliancesWe maintain commercial arrangementswith other airlines covering scheduledpassenger and cargo services on a smallnumber of <strong>our</strong> international routes.Commercial arrangements can govern,among other things, capacity offeredby each airline, how revenue is sharedbet<strong>we</strong>en the airlines and how schedulesare coordinated. In very few cases, somecommercial arrangements bet<strong>we</strong>en<strong>our</strong>selves and other airlines are requiredunder the relevant air services agreements.
<strong>British</strong> Air<strong>way</strong>s 2008/09 Annual Report and Accounts / 47We have improved the onboard experience for <strong>our</strong> premiumshorthaul customers, offering them greater space and privacyby keeping the middle seat free. And <strong>we</strong> have not forgotten<strong>our</strong> youngest passengers who can now enjoy an entertainmentpack on longhaul flights featuring that much-loved character,Paddington Bear.Overview Our <strong>business</strong> Corporate governance Financial statements
48 / <strong>British</strong> Air<strong>way</strong>s 2008/09 Annual Report and Accounts<strong>The</strong> <strong>way</strong> <strong>we</strong> <strong>run</strong> <strong>our</strong> <strong>business</strong>Community investment“Our partnership withUNICEF, Change for Good,celebrated reaching its£25 million milestonein July 2008.”2008/09£5.4mdonated to charity.BA Fun Run£55,000raised for CancerResearch UK.We have a long history of investing inthe communities in which <strong>we</strong> operate.This work continues and in 2008/09<strong>we</strong> supported over 120 community andconservation organisations in a variety of<strong>way</strong>s, including donating travel awards,cargo and excess baggage space.We work closely with the communitiesaround Heathrow and the UK regions. Ourmain priorities include education and youthdevelopment, supporting volunteering by<strong>our</strong> colleagues and promoting sustainablet<strong>our</strong>ism, heritage and the environment.We continue to be a member of boththe London Benchmarking Group (LBG)and the Business in the Community (BITC)15 Percent Club.Education and youth developmentOur Community Learning Centre –close to <strong>our</strong> Waterside headquarters atHeathrow – has <strong>we</strong>lcomed nearly 50,000young people and adult learners on arange of education programmes since itsopening in 1999. Programmes relevantto the school curriculum are <strong>run</strong> inpartnership with the United NationsInternational Children’s Emergency Fund(UNICEF) focusing on places <strong>we</strong> fly to,using workshops on customer service,information and communicationtechnology and the environment.Languages<strong>The</strong> <strong>British</strong> Air<strong>way</strong>s language flag award,offered to schools across the UK, hasbeen recognised by the Foreign andCommon<strong>we</strong>alth Office and in 2008 wonthe Business Language Champion Partnershipof the Year Award. We are seeking officialaccreditation for the programme which willallow the test to earn university points. Over1,500 young people have gained a flag awardin languages ranging from French to Urdu.PartnershipsIn partnership with the Natural HistoryMuseum, <strong>we</strong> have developed programmesallowing pupils from Heathrow schools tovisit the museum, meet scientists andexperience the work of the Darwin Centre.Overseas, <strong>we</strong> have been working with UKand South African partners on a multiagencySafer Communities programmein South Africa to reduce crime andincrease community confidence. Sincethe programme began in 2003, over 40schools and more than 200 volunteeryouth coaches have been trained.Change for GoodOur partnership with UNICEF, Changefor Good, raised £3 million in the year toMarch 31, 2009. <strong>The</strong> onboard collectionprogramme, supported by over 2,400 cabincrew champions, enabled us to help fundUNICEF’s work with vulnerable children.Change for Good celebrated reaching its£25 million milestone in July 2008.In August 2008 <strong>our</strong> Chief Executive visitedTanzania to see the work of Change forGood at first hand, particularly how fundsare being used to support and treatmothers and babies affected by HIV/AIDS.We have also invested significantly in Chinato support literacy programmes and inNigeria <strong>our</strong> donations have been usedto buy malaria nets.Employee fundraisingOver 3,500 retired and current employeesdonated over £630,000 directly from theirpayroll to their chosen charities through<strong>our</strong> Giving Scheme during the year. Inaddition, <strong>we</strong> supported Children in Needand Red Nose Day across the airlineraising over £13,000 for charities in theUK and overseas.Last year’s BA Fun Run raised in excess of£55,000 for Cancer Research UK. During2008/09 <strong>our</strong> World Cargo team collectedand delivered over 95 tonnes of highqualitygifts, donated by employees fromacross the airline.Charitable donationsBITC reported <strong>our</strong> total direct and in-kinddonations for 2008/09 at £5.4 million(2008: £5.7 million). Of these, directcharitable donations amounted to£444,000 (2008: £398,000).
<strong>British</strong> Air<strong>way</strong>s 2008/09 Annual Report and Accounts / 49Our Community Learning Centre – close to <strong>our</strong> Watersideheadquarters at Heathrow – has <strong>we</strong>lcomed nearly 50,000 youngpeople and adult learners on a range of education programmessince its opening in 1999. Programmes relevant to the schoolcurriculum are <strong>run</strong> in partnership with the United NationsInternational Children’s Emergency Fund (UNICEF) focusingon places <strong>we</strong> fly to, using workshops on customer service,information, communication technology and the environment.Overview Our <strong>business</strong> Corporate governance Financial statements
50 / <strong>British</strong> Air<strong>way</strong>s 2008/09 Annual Report and Accounts<strong>The</strong> <strong>way</strong> <strong>we</strong> <strong>run</strong> <strong>our</strong> <strong>business</strong>Environment“In March 2009 <strong>our</strong> carbonoffset scheme became thefirst airline offset productto meet the requirementsof the UK Government’sQuality Assurance Scheme.”Over55,000tonnes of CO 2 <strong>we</strong>re offsetby customers in 2008.35%of dry waste at Heathrowand Gatwick was recycledin 2008.Climate changeClimate change is an issue of hugeimportance to us and <strong>we</strong> have a long-termcommitment to address it. Our climatechange programme covers f<strong>our</strong> main areas:policy measures to curb emissions growth;voluntary carbon offsetting; fuel efficiency;and support for scientific research.Our target is to reduce <strong>our</strong> net CO 2emissions by 50 per cent by 2050, relativeto 2005. Meeting this target will requireinvestment in new technology, sustainablebiojet fuels and in cost-effective emissionsreductions in other sectors of the economythrough the creation of effective globalcarbon trading markets.Governments will come together inDecember 2009 to discuss a future globalagreement on climate change. Internationalaviation emissions <strong>we</strong>re not included inthe Kyoto Protocol, but <strong>we</strong> believe thatthey must be incorporated into this newagreement. We are playing a leading rolein aviation groups to develop a globalpolicy approach for the sector.In December 2008 the European Unionfinalised the conditions for includingaviation in its Emissions Trading System(ETS). With <strong>our</strong> experience of emissionstrading since 2002 <strong>we</strong> are <strong>we</strong>ll placedto meet the EU ETS requirements.Our offsetting scheme allows passengersto add a carbon offset when they book aflight through ba.com. During 2008, some150,000 customers offset over 55,000tonnes of CO 2 in this <strong>way</strong> and theircontributions have helped fund UNcertifiedcarbon cutting initiatives in Chinaand Brazil. In March 2009 <strong>our</strong> schemebecame the first airline offset productto meet the requirements of the UKGovernment’s Quality Assurance Schemefor Carbon Offsetting – a guarantee that<strong>we</strong> are achieving genuine, additional andmeasurable carbon reductions.We continue to look for <strong>way</strong>s to improvefuel efficiency and over 600 projects haveso far been assessed. Of these, 55 havebeen implemented, delivering over 65,000tonnes of CO 2 savings, equivalent to nearly21,000 tonnes of fuel. In addition, <strong>we</strong>have reduced CO 2 emissions associatedwith <strong>our</strong> UK property portfolio by nearly11 per cent.In 2008 <strong>our</strong> carbon efficiency, expressedin grammes of CO 2 per passenger kilometre(gCO 2 /pkm), was just over 107 grammes.Our target is to improve that figure to 83gCO 2 /pkm by 2025. Our carbon footprintwas 17.6 million tonnes of CO 2 in 2008.We are also supporting a number ofscientific research projects. <strong>The</strong>se includethe European Commission’s IAGOSproject which is investigating whetheraircraft can be used to collect atmosphericdata in-flight and a partnership to developnew policies on preventing deforestation.WasteWe aim to minimise waste, reduce disposalto landfill and increase reuse and recycling.Where <strong>we</strong> cannot prevent waste disposal,<strong>we</strong> aim to manage <strong>our</strong> waste responsibly.In 2008 <strong>we</strong> recycled 35 per cent of drywaste at Heathrow and Gatwick (up from30 per cent the year before). We have set<strong>our</strong>selves the target of recycling 50 percent by 2010. We will achieve this throughthe provision of more recycling centres,handling a wider range of materials and byenc<strong>our</strong>aging better segregation of waste.<strong>The</strong> amount of waste at Heathrow andGatwick sent to landfill fell by 7.2 per centto 3,424 tonnes, during the year. Our nonrecyclablewaste at Heathrow and Gatwickwill be processed through a waste toenergy plant before the end of 2009,helping us to meet <strong>our</strong> target of zerowaste to landfill by 2010.NoiseWe are investing in quieter aircraft andtechnology and aim to change the <strong>way</strong><strong>we</strong> fly to reduce the noise of <strong>our</strong> activities.We have set a target to reduce <strong>our</strong> averagenoise per flight by 15 per cent by 2015.Night noise is a particular concern forpeople living near Heathrow and is one ofthe key issues <strong>we</strong> want to address. During2008, <strong>we</strong> contravened the noise limits at
<strong>British</strong> Air<strong>way</strong>s 2008/09 Annual Report and Accounts / 51Overview Our <strong>business</strong>We are investing in quieter aircraft and technology and aimto change the <strong>way</strong> <strong>we</strong> fly to reduce the noise of <strong>our</strong> activities.We have set a target to reduce <strong>our</strong> average noise per flightby 15 per cent by 2015.We also aim to reduce <strong>our</strong> CO 2 emissions by 50 per cent by2050, relative to 2005. Meeting this target will require investmentin new technology, sustainable biojet fuels and in cost-effectiveemissions reductions in other sectors of the economy throughthe creation of effective global carbon trading markets.Corporate governance Financial statements
52 / <strong>British</strong> Air<strong>way</strong>s 2008/09 Annual Report and Accounts<strong>The</strong> <strong>way</strong> <strong>we</strong> <strong>run</strong> <strong>our</strong> <strong>business</strong>Environment continuedHeathrow 36 times, a reduction of 23 percent compared with 2007. This year, these<strong>we</strong>re principally a result of Boeing 747-400 departures being delayed.At Heathrow, <strong>we</strong> use a ContinuousDescent Approach on landing to save fueland cut noise. During 2008, 95 per centof all day and night flights operated this<strong>way</strong>, compared with an airport average of82 per cent for daytime and 88 per centfor night time flights.Air qualityWe have a number of operating initiativesto improve <strong>our</strong> air quality performance. Wehave already achieved a reduction in NO Xemissions (nitrogen oxide – a greenhousegas) through the modification of Boeing747 (RB211) engines and Boeing 777(GE90) engines. We plan to further modify<strong>our</strong> Boeing 737 engines to deliver a20 per cent reduction in NO X .At Terminal 5 and other airportsworldwide, <strong>we</strong> are able to use aircraftstands with fixed ground po<strong>we</strong>r and preconditionedair which means <strong>we</strong> will relyless on aircraft auxiliary po<strong>we</strong>r units. Wehave developed procedures for aircraft totaxi on one less engine after landing, andare now developing similar proceduresto taxi out to the <strong>run</strong><strong>way</strong>. <strong>The</strong>se measureswill cumulatively reduce CO 2 and NO Xemissions, fuel consumption and noise.Fleet modernisationIn response to delivery delays for <strong>our</strong>new efficient Boeing 787 aircraft, <strong>we</strong> havecontracted for six Boeing 777-300ERaircraft (two acquired, f<strong>our</strong> leased) due tostart arriving in 2010, with options on afurther f<strong>our</strong>. We have ordered two AirbusA318 aircraft for <strong>our</strong> transatlantic servicesfrom London City Airport. Additionally,<strong>we</strong> have ordered six Embraer E190SR andfive E170 aircraft to replace the RJ85 andRJ100 aircraft currently operated fromLondon City Airport.We are also improving <strong>our</strong> performanceon the ground. At Terminal 5, <strong>we</strong> haveinvested in buses specified to the futureEuro 5 exhaust emission standard and afleet of electric baggage tugs. Remotemonitoring by telematics technology isbeing used to manage fleet efficiency andan automatic fuel management system hasbeen fitted to refuelling equipment atHeathrow. We continue to be a member ofthe Heathrow Clean Vehicles Programme.Summary of environmental achievements and targetsTarget 2008 a 2007 a 2006 aCarbon efficiency gCO 2 /pkm b 83 by 2025 107 110 110CO 2 emissions (million tonnes) 17.6 17.7 16.6Heathrow departure noise violations – day 4 1 9Heathrow departure noise violations – night 32 46 56Continuous Descent Approach (Heathrow) % – day 95 95 95 84Continuous Descent Approach (Heathrow) % – night 95 95 94 88Total waste at Heathrow and Gatwick –including <strong>our</strong> catering companies (metric tonnes) 26,184 27,121 c 26,920% recycling (Heathrow and Gatwick) 50 per cent by 2010 35.1 30.1 28.9Waste to landfill (tonnes) (Heathrow and Gatwick) Zero by 2010 3,424 3,688 4,063Waste per passenger (kg) (Heathrow and Gatwick) reduce by 2 per cent per annum 0.78 0.79 c 0.78Heathrow air quality/NO X emissions to 1,000ft (metric tonnes) 1,081 1,107 1,096a Calendar years.b With effect from 2008, traffic statistics now include data related to customers who have flown on ‘frequent flyer’ mileage redemption tickets. This changebrings the Group into line with industry standards, and also into line with all major scheduled carriers.c Increased due to revised data on catering waste.