Recommended Cash Offer

British Airways PLC
8 March 2001


PART 1



8 March 2001

                 Embargoed until 7 am Thursday, 8 March 2001

 This announcement is not for release, publication or distribution in or into
                the United States, Canada, Australia or Japan



                            RECOMMENDED CASH OFFER

                                      by

                                ERNST & YOUNG

                                 on behalf of

           The Plimsoll Line Limited, a wholly-owned subsidiary of


                             BRITISH AIRWAYS PLC


                                     for


                     BRITISH REGIONAL AIR LINES GROUP PLC

                                   Summary

British Airways plc ('British Airways') and British Regional Air Lines Group
plc ('British Regional Air Lines Group') announce the terms of a recommended
cash offer ('the Offer') to be made by Ernst & Young on behalf of The Plimsoll
Line Limited (the 'Offeror'), a wholly-owned subsidiary of British Airways,
for the whole of the issued and to be issued share capital of British Regional
Air Lines Group.

The Offer:

*  will be 120p in cash for each British Regional Air Lines Group Share

*  will be unanimously recommended by the board of British Regional Air
   Lines Group

*  values the entire issued share capital of British Regional Air Lines
   Group at approximately £78 million

*  represents a premium of approximately 83 per cent. to the closing
middle market price of 65.5p per British Regional Air Lines Group Share on 1
December 2000, the last business day before the announcement that British
Regional Air Lines Group had received an approach which might lead to an offer
being made for the Company

The Offeror holds irrevocable undertakings in respect of a total of 34,496,146
British Regional Air Lines Group Shares, representing approximately 53.3 per
cent. of the total issued share capital of British Regional Air Lines Group,
comprising irrevocable undertakings in respect of a total of 21,016,146
British Regional Air Lines Group Shares from the directors of British Regional
Air Lines Group and a related trust and a related company, and irrevocable
undertakings in respect of a total of 8,500,000 British Regional Air Lines
Group Shares from Schroder Investment Management Limited and in respect of a
total of 4,980,000 British Regional Air Lines Group Shares from Framlington
Investment Management Limited.  In addition, Schroder Investment Management
Limited has expressed a non-binding intention to accept the Offer in respect
of a further 4,114,799 British Regional Air Lines Group Shares, representing
approximately 6.4 per cent. of the total issued share capital of British
Regional Air Lines Group.

The irrevocable undertakings from Schroder Investment Management Limited and
Framlington Investment Management Limited described above will cease to be
binding in certain circumstances (including where a higher offer is made for
British Regional Air Lines Group), as more fully described in the full text of
the attached announcement.



Sir Michael Bishop, Chairman of British Regional Air Lines Group, said:

'I am extremely pleased that we have reached an agreement with British Airways
which reflects the significant strengths of British Regional Air Lines Group
in this demanding sector of the industry, and the value of the Group's route
network, fleet, operational reputation, and above all its professional and
committed staff.  British Airways will provide the Group with the scale,
stability and the opportunity to develop the business, and the Offer
represents the best way forward'.



Rod Eddington, Chief Executive of British Airways, said:

'This deal is a great opportunity for us further to improve regional flying -
better matching capacity to demand and more closely integrating the regional
networks to give the customer a better, more cohesive schedule.'

'British Regional Air Lines Group is a successful business.  Brymon Airways is
too.  Combining these regional specialists will allow us to capitalise on
their strengths and ensure we remain competitive in this sector of the UK
market.'



This summary should be read in conjunction with the attached announcement.


Enquiries:

British Airways          Investor Relations             Tel: [phone]
                         British Airways Press Office   Tel: [phone]

Ernst & Young            Paul Smith                     Tel: [phone]
                         Andrew Grace                   Tel: [phone]

British Regional         Terry Liddiard                 Tel: [phone]
Air Lines Group

KPMG Corporate           Stephen Halbert                Tel: [phone]
Finance

Cazenove & Co.           Malcolm Moir                   Tel: [phone]

Cardew & Co.             Richard Fallowfield            Tel: [phone]



Ernst & Young of Becket House, 1, Lambeth Palace Road, London SE1 7EU, which
is authorised to carry on investment business by The Institute of Chartered
Accountants in England and Wales, is acting exclusively for British Airways
and the Offeror and no one else in connection with the Offer and will not be
responsible to anyone other than British Airways and the Offeror for providing
the protections afforded to clients of Ernst & Young nor for providing advice
in relation to the Offer.

KPMG Corporate Finance, a division of KPMG which is authorised by The
Institute of Chartered Accountants in England and Wales to carry on investment
business, is acting exclusively for British Regional Air Lines Group and no
one else in connection with the Offer and will not be responsible to anyone
other than British Regional Air Lines Group for providing the protections
afforded to clients of KPMG Corporate Finance or for providing advice in
relation to the Offer.

Cazenove & Co., which is regulated by The Securities and Futures Authority
Limited, is acting exclusively for British Regional Air Lines Group and no one
else in conjunction with the Offer and will not be responsible to anyone other
than British Regional Air Lines Group for providing the protections afforded
to customers of Cazenove & Co. or for providing advice in relation to the
Offer.

This announcement does not constitute an offer or invitation to purchase any
securities.

The full text of the conditions and certain further terms of the Offer set out
in Appendix I form part of and should be read with this announcement.

Appendix IV contains definitions of the terms used in this announcement.

The Offer will not be made, directly or indirectly, in or into, or by use of
the mails or any other means of instrumentality (including, without
limitation, facsimile transmission, telex, e-mail or telephone) of interstate
or foreign commerce of, or of any facilities of a national securities exchange
of, the United States, Canada, Australia or Japan and will not be capable of
acceptance by any such use, means, instrumentality or facilities, or from
within the United States, Canada, Australia or Japan.  Accordingly, copies of
this announcement are not being, and must not be, mailed or otherwise
distributed or sent in or into or from the United States, Canada, Australia or
Japan and persons receiving this announcement (including custodians, nominees
and trustees) must not distribute or send it in or into or from the United
States, Canada, Australia or Japan or use such mails or any such means,
instrumentality, or facility in connection with the Offer and doing so may
invalidate any purported acceptance of the Offer.



8 March 2001

                 Embargoed until 7 am Thursday, 8 March 2001

 This announcement is not for release, publication or distribution in or into
                the United States, Canada, Australia or Japan



                            RECOMMENDED CASH OFFER


                                      by


                                ERNST & YOUNG

                                 on behalf of

           The Plimsoll Line Limited, a wholly-owned subsidiary of

                             BRITISH AIRWAYS PLC


                                     for


                     BRITISH REGIONAL AIR LINES GROUP PLC



1. Introduction

The boards of British Airways plc ('British Airways') and British Regional Air
Lines Group plc ('British Regional Air Lines Group') announce that they have
agreed terms for a recommended cash offer of 120p in cash for each British
Regional Air Lines Group Share to be made by Ernst & Young, on behalf of The
Plimsoll Line Limited (the 'Offeror'), a wholly-owned subsidiary of British
Airways, for the whole of the issued and to be issued share capital of British
Regional Air Lines Group.

The directors of British Regional Air Lines Group have given irrevocable
undertakings to accept the Offer in respect of their own beneficial
shareholdings amounting to 521,813 British Regional Air Lines Group Shares,
representing approximately 0.8 per cent. of the total issued share capital of
British Regional Air Lines Group.  These irrevocable undertakings will also
extend to any British Regional Airlines Group Shares allotted or issued upon
the exercise of options granted under the British Regional Air Lines Group
Share Option Schemes.  The trustees (the 'Trustees') of the Sir Michael Bishop
1988 Interest in Possession Settlement, of which Sir Michael Bishop, the
Chairman of British Regional Air Lines Group, is the settlor, have given an
irrevocable undertaking to accept the Offer in respect of their own
shareholdings amounting to 16,834,000 British Regional Air Lines Group Shares,
representing approximately 26.0 per cent. of the total issued share capital of
British Regional Air Lines Group.  Liddiard Investments Limited, of which
Terry Liddiard, the Chief Executive of British Regional Air Lines Group, is
the sole shareholder, has given an irrevocable undertaking to accept the Offer
in respect of its own shareholding, amounting to 3,660,333 British Regional
Air Lines Group Shares, representing approximately 5.7 per cent. of the total
issued share capital of British Regional Air Lines Group.  The Offeror has
received further irrevocable undertakings to accept the Offer in respect of
8,500,000 British Regional Air Lines Group Shares, representing approximately
13.1 per cent. of the total issued share capital of British Regional Air Lines
Group from Schroder Investment Management Limited and in respect of 4,980,000
British Regional Air Lines Group Shares, representing approximately 7.7 per
cent. of the total issued share capital of British Regional Air Lines Group
from Framlington Investment Management Limited.  Accordingly, the Offeror
holds irrevocable undertakings in respect of a total of 34,496,146 British
Regional Air Lines Group Shares, representing approximately 53.3 per cent. of
the total issued share capital of British Regional Air Lines Group.  In
addition, Schroder Investment Management Limited has expressed a non-binding
intention to accept the Offer in respect of a further 4,114,799 British
Regional Air Lines Group Shares, representing approximately 6.4 per cent. of
the total issued share capital of British Regional Air Lines Group.

The irrevocable undertaking given by Schroder Investment Management Limited
will cease to be binding if an offer from a third party is announced within 10
days of this announcement which represents an improvement of 10 per cent. or
more in the value of the consideration to be offered under the Offer.  The
irrevocable undertaking given by Framlington Investment Management Limited
will cease to be binding if an offer from a third party is announced within 7
days of this announcement which represents an improvement in the value of the
consideration to be offered under the Offer. The irrevocable undertakings of
Schroder Investment Management Limited and Framlington Investment Management
Limited will also cease to be binding in certain circumstances where the
mandate or instructions given to those institutions in relation to British
Regional Air Lines Group Shares is terminated or changed.



 The irrevocable undertakings given by the directors of British Regional Air
Lines Group, the Trustees and Liddiard Investments Limited will lapse only in
the event of the Offer lapsing or being withdrawn.

2. Board conclusion and recommendation

The directors of British Regional Air Lines Group, who have been so advised by
KPMG Corporate Finance and Cazenove, consider that the terms of the Offer are
fair and reasonable.  In providing advice to the directors of British Regional
Air Lines Group, KPMG Corporate Finance and Cazenove have taken into account
the directors' commercial assessments.  Accordingly, the directors of British
Regional Air Lines Group will unanimously recommend British Regional Air Lines
Group Shareholders to accept the Offer, as they have irrevocably undertaken to
do in respect of their own beneficial holdings.

3. The Offer

The Offer, which will be subject to the conditions and further terms set out
in Appendix I and in the formal Offer Document,  will be made on the following
basis:


                                 120p in cash

                                     for

                 each British Regional Air Lines Group Share


On the bases and assumptions set out in Appendix II, the Offer:

* values the entire issued share capital of British Regional Air Lines Group at
approximately £78 million

* represents a premium of approximately 83 per cent. to the
closing middle market price of 65.5p per British Regional Air Lines Group
Share on 1 December 2000, the last business day before the announcement that
British Regional Air Lines Group had received an approach which might lead to
an offer being made for the Company

The cash consideration payable under the Offer will be provided by the British
Airways Group from its own resources.

4. Background to and reasons for the Offer

British Airways' shorthaul business in the regions of the United Kingdom has
become fragmented over the years. The British Airways Board identified the
strategic need to reduce this fragmentation such that ownership is not divided
between a number of different sets of shareholders and confusion is avoided
amongst customers, travel agents and staff regarding the different shorthaul
operators flying in British Airways colours. The acquisition of its franchise
partner, British Regional Airlines, is consistent with that strategy.

British Regional Air Lines Group has a major operation in Manchester, which is
an important market for British Airways. The market in Manchester is growing
strongly, has infrastructure to support that growth and British Airways is
committed to its customer base in the area. Furthermore, the acquisition of
British Regional Air Lines Group will improve British Airways' presence in the
important UK regional market and will facilitate more efficient scheduling
between British Regional Air Lines Group's operations and those of the rest of
British Airways.

British Airways' strategy for the UK regions is to seek to improve the service
it delivers to its customers by offering them a wider choice of routes and
frequencies. The acquisition of British Regional Air Lines Group will provide
British Airways with an increased fleet of regional jets operating in the
United Kingdom. British Airways has recognised that smaller aircraft operating
at higher frequencies are needed to fulfil the demands of these regional
markets. British Airways' intention is to combine the operations of British
Regional Air Lines Group with those of Brymon Airways Limited, British
Airways' wholly-owned subsidiary based in the West Country. These operations
are efficiently managed and are well suited to serving regional markets and,
as a result, are profitable. Both British Regional Air Lines Group and Brymon
Airways operate similar fleets,  each comprising turboprops and regional jet
aircraft. The combination of the two airlines' fleets will permit growth
opportunities, scheduling and network efficiencies, and will also provide
synergy benefits. Whilst both British Regional Airlines and Brymon Airways are
British Airways carriers, it is intended that the combined businesses will be
managed separately from the main British Airways business, as Brymon Airways
has been to date.

5. Information on the British Airways Group and the Offeror

British Airways is the world's largest scheduled international passenger
airline. British Airways operates international and domestic scheduled and
charter air services for the carriage of passengers, freight and mail and the
provision of ancillary services.  British Airways' world-wide network covers
some 535 destinations in 160 countries.

As at 31 December 2000, British Airways and its subsidiaries operated 340
aircraft.  In addition, 142 aircraft of 14 different types had been franchised
into British Airways colours.  British Airways franchise partners serve 146
destinations in 29 countries, of which 79 destinations otherwise have no
British Airways presence.

For the year ended 31 March 2000, British Airways recorded revenue of £8,940
million (1999: £8,892 million) and operating profit of £84 million (1999: £442
million).  Loss for the year, after tax and non-equity minority interest, was
£21 million (1999: profit of £206 million).  The dividend per share remained
constant from the prior year at 17.9p.

For the nine months ended 31 December 2000, British Airways recorded revenue
of £7,157 million (1999: £6,833 million) and operating profit of £441 million
(1999: £209 million).  Profit for the nine months, after tax and non-equity
minority interest, was £191 million (1999: £147 million).  Earnings per share
rose compared with the same period last year to 17.8p (1999: 13.7p).  In
November 2000, British Airways declared an interim dividend of 5.1p which was
unchanged from the previous year.

The Offeror is a wholly-owned subsidiary of British Airways and is the holding
company for Brymon Airways Limited.

6. Information on British Regional Air Lines Group

The Group operates two airlines, British Regional Airlines and Manx Airlines.
British Regional Airlines operates over 190 daily flights under a British
Airways franchise agreement, serving regional and hub airports throughout the
British Isles and Continental Europe.  Manx Airlines has served the Isle of
Man since 1982, flying business and leisure travellers between the island and
major airports in the UK, the Channel Islands and Ireland.

Manx Airlines and British Regional Airlines together have a fleet of 50
turboprop and jet aircraft, with seat capacities of up to 111 seats.  The
Group is one of the largest regional airlines in Europe and during 2000 the
Group operated an average of over 200 flights per day.  British Regional
Airlines is the largest British Airways franchise operator.

For the year ended 31 December 1999, British Regional Air Lines Group reported
turnover of £202 million (1998: £189 million), profit before tax (excluding
exceptional items) of £7.8 million (1998: £6.0 million), profit after tax
(excluding exceptional items) of £7.1 million (1998: £5.4 million) and
earnings per share (excluding exceptional items) of 11p (1998: 9.4p).

For the six months ended 30 June 2000, British Regional Air Lines Group
reported turnover of £109 million (1999: £95 million), profit before tax
(excluding exceptional items) of £1.0 million (1999: £0.9 million), profit
after tax (excluding exceptional items) of £0.9 million (1999: £0.9 million)
and earnings per share (excluding exceptional items) of 1.4p (1999: 1.4p).

7. British Regional Air Lines Group's estimated 2000 results, current trading
and prospects

In the absence of unforeseen circumstances, the directors of British Regional
Air Lines Group estimate that, as set out in Appendix III, British Regional
Air Lines Group's profit before tax, profit after tax and earnings per share
for the year ended 31 December 2000 were not less than £10.0 million, £9.7
million and 15.0p respectively.

In the interim statement, it was reported that both turnover and profit before
tax (excluding exceptional items) for the first half of 2000 were ahead of the
comparable figures for the first half of 1999 and that British Regional Air
Lines Group was confident of continued solid progress during the second half
of the year.  As reported in the trading statement released on 19 December
2000, trading for the Group continued to remain strong in the second half of
2000 and was expected to exceed market expectations, both in terms of turnover
and profit.

The Group's solid trading performance has been driven by strong demand for
regional air services, particularly from the business communities.  Trading
was also assisted by the continued process of upgrading the Group's fleet to
more modern aircraft such as the Embraer 145 regional jet.  This allowed the
Group to access new routes and markets and upgrade the service offered on a
number of routes.  In the fourth quarter of 2000, the Group also benefited
from the exceptional business generated by the railway and flood problems
encountered in the United Kingdom.

Reflecting the Group's continued commitment to its aircraft fleet through the
Embraer 145 regional jet acquisition programme, net debt at 31 December 2000
had risen to approximately £98 million, compared with £85.6 million at 30 June
2000.

Trading has started 2001 in line with expectations, and the delivery of
further regional jets during the course of the year will enable the Group to
access further route opportunities, and to upgrade the Group's major routes
from turboprops to jet aircraft, which is expected to produce positive
economic benefits.

8. Management and employees

British Airways has given assurances to the board of British Regional Air
Lines Group that the existing employment rights, including pension rights, of
all employees of British Regional Air Lines Group will be fully safeguarded.



9. British Regional Air Lines Group Share Option Schemes

The Offer will extend to any British Regional Air Lines Group Shares issued or
unconditionally allotted prior to the date on which the Offer closes (or such
earlier date not being earlier than the date on which the Offer becomes or is
declared unconditional as to acceptances or, if later, the first closing date
of the Offer, as the Offeror may, subject to the City Code, determine) as a
result of the exercise of options granted under the British Regional Air Lines
Group Share Option Schemes.

Proposals will, where appropriate, be made in due course to participants in
the British Regional Air Lines Group Share Option Schemes if the Offer becomes
or is declared wholly unconditional.

10. Compulsory acquisition and de-listing

If sufficient acceptances of the Offer are received and/or sufficient British
Regional Air Lines Group Shares are otherwise acquired, the Offeror intends to
apply the provisions of sections 428 to 430F (inclusive) of the Act to acquire
compulsorily any outstanding British Regional Air Lines Group Shares following
the Offer becoming or being declared wholly unconditional.

In the event of the Offer becoming or being declared wholly unconditional and
sufficient British Regional Air Lines Group Shares being controlled by the
British Airways  Group, the Offeror intends that British Regional Air Lines
Group will apply for cancellation of the listing of the British Regional Air
Lines Group Shares on the Daily Official List.

11. General

The Offer will be made on the terms and subject, inter alia, to the conditions
which are set out in Appendix I and those terms which will be set out in the
formal Offer Document and such further terms as may be required to comply with
the provisions of the City Code.  The availability of the Offer to persons not
resident in the United Kingdom may be affected by the laws of the relevant
jurisdictions.  Persons who are not resident in the United Kingdom should
inform themselves about and observe any applicable requirements.



The British Regional Air Lines Group Shares which are the subject of the Offer
will be acquired fully paid, free from all liens, equities, charges,
encumbrances, rights of pre-emption and other third party interests and
together with all rights now or hereafter attaching thereto, including the
right to receive and retain all dividends and other distributions (if any)
declared, made or paid on or after the date hereof.  The Offer will extend to
any British Regional Air Lines Group Shares which are unconditionally allotted
or issued whilst the Offer remains open for acceptance (or by such earlier
date as the Offeror may determine, not being earlier than the date on which
the Offer becomes unconditional as to acceptances or, if later, the first
closing date of the Offer).

The formal Offer Document setting out details of the Offer and the means by
which the Offer can be accepted will be despatched in due course by Ernst &
Young on behalf of the Offeror.

As at 7th March, 2001, The Honourable Raymond Seitz, a director of British
Airways, held 2,500 British Regional Air Lines Group Shares, representing
approximately 0.004 per cent. of the total issued share capital of British
Regional Air Lines Group.  Save as stated above, and save in respect of the
irrevocable undertakings referred to above, neither British Airways, the
Offeror, the directors of the Offeror or British Airways nor, so far as the
Offeror is aware, any party acting in concert with the Offeror, owns or
controls any British Regional Air Lines Group Shares or holds any options to
purchase British Regional Air Lines Group Shares or has entered into any
derivative referenced to securities of British Regional Air Lines Group which
remains outstanding.

Appendix IV contains definitions of the terms used in this announcement.

This announcement does not constitute an Offer or an invitation to purchase
any securities.

Enquiries:

British Airways          Investor Relations              Tel: [phone]
                         British Airways Press Office    Tel: [phone]

Ernst & Young            Paul Smith                      Tel: [phone]
                         Andrew Grace                    Tel: [phone]

British Regional         Terry Liddiard                  Tel: [phone]
Air Lines Group


KPMG Corporate           Stephen Halbert                 Tel: [phone]
Finance

Cazenove & Co.           Malcolm Moir                    Tel: [phone]

Cardew & Co.             Richard Fallowfield             Tel: [phone]



Ernst & Young of Becket House, 1, Lambeth Palace Road, London SE1 7EU, which
is authorised to carry on investment business by The Institute of Chartered
Accountants in England and Wales, is acting exclusively for British Airways
and the Offeror and no one else in connection with the Offer and will not be
responsible to anyone other than British Airways and the Offeror for providing
the protections afforded to clients of Ernst & Young nor for providing advice
in relation to the Offer.

KPMG Corporate Finance, a division of KPMG which is authorised by The
Institute of Chartered Accountants in England and Wales to carry on investment
business, is acting exclusively for British Regional Air Lines Group and no
one else in connection with the Offer and will not be responsible to anyone
other than British Regional Air Lines Group for providing the protections
afforded to clients of KPMG Corporate Finance or for providing advice in
relation to the Offer.

Cazenove & Co., which is regulated by The Securities and Futures Authority
Limited, is acting exclusively for British Regional Air Lines Group and no one
else in conjunction with the Offer and will not be responsible to anyone other
than British Regional Air Lines Group for providing the protections afforded
to customers of Cazenove & Co. or for providing advice in relation to the
Offer.


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