SUMMARY PLAN DESCRIPTION OF THE BRITISH AIRWAYS PLC PENSION PLAN (U.S.A.) AS IN EFFECT ON APRIL 1, 2014

SUMMARY PLAN DESCRIPTION OF THE BRITISH AIRWAYS PLC PENSION PLAN (U.S.A.) AS IN EFFECT ON APRIL 1, 2014 December, 2014

TABLE OF CONTENTS WHAT IS THE BRITISH AIRWAYS PENSION PLAN... 1 ELIGIBILITY... 1 Eligibility Restrictions... 1 JOINING THE PLAN... 2 Prior Plans... 2 WHEN SERVICE STARTS... 2 HOW YOUR BENEFITS BECOME VESTED... 3 COST... 3 VOLUNTARY CONTRIBUTIONS... 3 DETERMINANTS OF MONTHLY BENEFIT... 3 Retirement Date... 4 Credited Service... 4 Final Average Salary... 5 Voluntary Contributions... 5 Benefit Payment Options... 6 CALCULATING YOUR PENSION BENEFIT... 6 Normal Retirement Age... 6 Early Retirement... 8 Late Retirement... 12 MAXIMUM BENEFITS... 12 BENEFIT PAYMENT OPTIONS... 12 Default Payment... 12 Optional Forms of Payment... 13 TAX CONSIDERATIONS... 14 SELECTING A PAYMENT OPTION... 14 SELECTING YOUR BENEFICIARY... 14 PRE-RETIREMENT SURVIVOR ANNUITY... 15 DEATH BENEFIT AND VOLUNTARY CONTRIBUTIONS... 15 COST OF LIVING ADJUSTMENT (COLA)... 16 YOUR PLAN AND SOCIAL SECURITY... 16 SPECIAL PROVISIONS... 16 You Leave the Company... 16 You Become Disabled... 17 Re-Employment... 17 Break-In-Service... 17 Suspended Members... 18 You Retire and Return to Work... 18 You Go on an Approved Leave of Absence... 18 You Go on Military Leave... 18 ADMINISTRATION OF PLAN... 19 Plan Administrator... 19 Cost of Administering the Plan... 19 PLAN DOCUMENT... 19 PLAN TRUSTEE... 19 PLAN LIMITATIONS... 20 QUALIFIED DOMESTIC RELATIONS ORDER (QDRO)... 20 PLAN CONTINUANCE... 20 OTHER IMPORTANT FACTS... 20 Your Right to Benefits... 20 How You May Lose Benefits... 20 INSURED BENEFITS... 21 TOP HEAVY PROVISION... 22 Page i

CLAIMS... 22 If Your Claim Is Denied... 22 Filing an Appeal to Benefits Denial... 23 YOUR RIGHTS UNDER ERISA... 23 Prudent Actions by Plan Fiduciaries... 24 Assistance with Your Questions... 24 REQUIRED LEGAL INFORMATION... 25 ii

BRITISH AIRWAYS PLC PENSION PLAN (U.S.A.) WHAT IS THE BRITISH AIRWAYS PENSION PLAN Regardless of your age or how close you are to retirement, some thoughtful planning now can help you prepare for your financial needs during retirement. For those who are eligible, the British Airways Plc Pension Plan (U.S.A.) (Plan) is designed to contribute to overall retirement income needs by providing a monthly income for life. Generally, Plan benefits are paid entirely by British Airways Plc (Company) and are based on your earnings and your service with the Company. The Plan offers a measure of flexibility regarding retirement date and payment options and can also provide for your spouse or beneficiary when you die, either before or after you retire. You may even be eligible to receive benefits if you leave the Company or any of its United States affiliates before retirement. The primary purpose of this Summary Plan Description or SPD is to provide you with an overview of the key features of the Plan so that you can better understand the benefits it provides. The complete terms of the Plan can be found in the formal Plan document, which governs the operation of the Plan and always prevails in the event of a discrepancy between what appears here and the Plan document text or in any matter discussed in less detail in this Summary Plan Description. This Summary Plan Description does not replace or change the terms of the official Plan document. The complete Plan document and certain related documents are available for inspection by you, your beneficiaries, or your legal representative upon request. If at any time, you have questions regarding your Plan benefits or you would like to review the official Plan document, please contact the Pension Department at (212) 716-0467. ELIGIBILITY Who is eligible to participate in the Plan? Generally, you are eligible if you satisfy the following criteria: 1. You are a non-union Employee, 2. Hired in the United States as a Local or Area staff employee, AND 3. Initial date of hire with the Company precedes January 1, 2004; OR 1. Your employment with the Company is subject to a collective bargaining agreement (CBA) entered into between the Company and the International Association of Machinists and Aerospace Workers (Union Employees) AND 2. You were a participant in the Plan as of September 30, 2003. Eligibility Restrictions You are not eligible to participate in the Plan if ANY of the following apply to you 1. You are a leased employee, 1

2. You are covered by another defined benefit pension plan maintained by the Company, or any affiliate of the Company, 3. You were not a participant in the Plan on or before July 31, 2008, 4. You provide services to the Company other than in an intended employee/employer relationship (even if that relationship is later recharacterized), 5. You are a salaried employee initially hired by the Company on or after January 1, 2004, 6. You are a Union Employee not participating in the Plan as of September 30, 2003, or 7. You are employed by Teleflight Limited. JOINING THE PLAN The Plan has been closed to new hires since January 1, 2004 and to transfers from outside the US as of August 1, 2008. Therefore, there is no way to join the Plan if you are not a participant in the Plan. Eligible employees automatically became participants in the Plan on the first day of the month coinciding with or next following the date the employee reached age 20 with credit for a Year of Eligibility Service. You receive a Year of Eligibility Service if you are credited with at least 1,000 hours of service during the first 12 months of your employment with the Company. If you did not complete 1,000 hours of service during the first 12 months of your employment, you received a Year of Eligibility Service for the first Plan Year during which you completed 1,000 hours of service, and you were automatically assumed into the Plan. Prior Plans There are a number of plans that have been incorporated into the Plan over the years. You automatically became a participant in the Plan effective April 1, 1985 if, prior to that date, you were a member of: The Plan OR The Retirement Plan for Employees of British Airways Plc. You automatically became a participant in the Plan effective October 15, 1988 if: You were employed by the Company on and after October 15, 1988, AND You were a participant in the Retirement Plan for United States Employees of British Caledonian Airways Ltd. (BCAL Plan) prior to October 15, 1988. The participants of the BCAL Plan are referred to as BCAL Employees. WHEN SERVICE STARTS Your service, for purposes of eligibility and vesting, started on the first day of employment with the Company. However, to compute your years of service for determining pension benefits see the definition of Years of Credited Service on page 4. 2

HOW YOUR BENEFITS BECOME VESTED Vesting is your ownership right to your retirement benefits. You become 100% Vested in your benefits after five years of service, but prior to that time, you are not Vested in your benefit at all. Once you are Vested, even if you leave the Company before retiring, you will be eligible to receive deferred benefits at your Normal or Early Retirement Date. When you reach age 65 while still employed by the Company, you automatically become 100% Vested regardless of your years of service. If you are a Union Employee, your service after September 30, 2003 will count only for vesting purposes. COST The Company pays the full cost of providing these important benefits as well as the cost of administering the Plan. VOLUNTARY CONTRIBUTIONS Voluntary Contributions is a discontinued feature of the Plan which enabled participants to buy additional pension benefits to be distributed upon retirement. Participants could elect to contribute between 2% - 5% of their salaries (after taxes) in order to receive a benefit of 20% of the amassed sum (without interest) with each regular pension payment in retirement. Participants can withdraw any portion or all of any Voluntary Contributions prior to retirement, and Voluntary Contribution benefits will be reduced accordingly upon distribution in retirement. As of March 31, 1995 non-union Employee participants were no longer able to make Voluntary Contributions to the Plan. As of January 31, 2010 Union Employee participants were no longer able to make Voluntary Contributions to the Plan. DETERMINANTS OF MONTHLY BENEFIT The actual amount of your annual pension is based on a number of factors, including: 1. Retirement date 2. Years of Credited Service (including sick leave) 3. Final Average Salary 4. Voluntary Contributions, if applicable, AND 5. The type of monthly benefit payment you elect. Let s take a look at each item in turn. 3

Retirement Date The Plan offers, with certain restrictions, three different choices as to when you can retire and start receiving benefits. 1) The Plan s Normal Retirement Date is the first day of the month coinciding with, or next following, your 65th birthday. Generally, if you choose to retire at 65, your pension benefits will begin on the first of the month on or after your 65th birthday. 2) You may decide that you do not wish to work until age 65. Under the Plan you reach your Early Retirement Date when you are age 50 with 20 years of service, or you are age 55 with 5 years of service. If you retire from the Company before your Normal Retirement Date, you do not need to begin receiving your benefit right away. You can have your pension payments start on the first day of any month following the day you retire up to age 65 (at which point you must begin receiving your monthly pension benefit payments). If your pension payments start before age 65, your Early Retirement benefit could be reduced to reflect the fact that you will be receiving your pension over a longer period of time. However, if you are at least age 55 (or age 60 for benefits earned after April 1, 2011), and your age and years of service total 85 at the time Early Retirement benefits begin, your pension will not be reduced. 3) If you choose, you can continue to work beyond age 65, and your benefits will not begin until you actually retire. In this Summary Plan Description, retirement after age 65 is referred to as Late Retirement. Credited Service You earn Years of Credited Service for each completed year of employment with the Company (subject to the Break-in Service rules described on page 17) after the date you satisfy the eligibility requirements and become a participant in the Plan (see JOINING THE PLAN on page 2). If you were a BCAL Employee, your service credited under the BCAL Plan prior to October 15, 1988 will be considered Credited Service under the Plan. If you are a Union Employee, you stopped earning Credited Service under the Plan effective October 1, 2003 when you began to earn benefits under the I.A.M. National Pension Plan. For non-union Employees, in calculating your pension benefit, Years of Credited Service is capped at 30 years, or your actual Years of Credited Service as of April 1, 2011, if greater than 30. If you leave the Company and are later reemployed, your service before your termination may be included in your pension calculation. (See Re-employment on page 17). Accumulated Sick Leave as Credited Service In addition to the number of years worked, accumulated sick leave is used to increase your Years of Credited Service using the following schedule: Number of Days Accumulated Increase in Credited Service 22-43 days 1 month 44-65 days 2 months 66-87 days 3 months 4

88-109 days 4 months 110-131 days 5 months 132-153 days 6 months 154-175 days 7 months 176-197 days 8 months 198-219 days 9 months 220-241 days 10 months 242-263 days 11 months 264 days & over 12 months The accumulated days of sick leave is frozen in determining the increase in Years of Credited Service as of September 30, 2003 for Union Employees and April 1, 2011 for non-union Employees. Final Average Salary Your Final Average Salary is the average of your eligible annual pay for the 60 consecutive months of Credited Service in which your earnings were highest during your last 10 Years of Credited Service. Final Average Salary includes basic annual pay, including any pre-tax 401(k) contributions, but excludes annual pay attributed to overtime, extended work week, premium remuneration, bonuses, and special allowances for living expenses, dwelling, medical assistance or the like. If you are a Union Employee, your Final Average Salary is determined by recognizing your eligible annual pay up January 31, 2010, or to the date you retired or terminated employment, if earlier. Example Final Average Salary For non-union Employees, let's assume your highest earnings during 60 consecutive months were as follows: 2009 $43,000 2012 $48,000 2010 $45,000 2013 $52,000 2011 $47,000 $235,000 Total In this example, your Final Average Salary would be: $235,000 divided by 5 years = $47,000. For Union Employees, the calculation works the same way, but the 60 consecutive months used in the calculation will not extend beyond January 31, 2010. 2005 $40,000 2008 $46,000 2006 $42,000 2009 $48,000 2007 $44,000 $220,000 Total (2005-2009) In this example for Union Employees, your Final Average Salary would be: $220,000 divided by 5 years = $44,000. The Internal Revenue Service limits the amount salary considered for purposes of calculating your benefit under the Plan. This salary limit for 2014 is $260,000 and is subject to change from time to time. Voluntary Contributions If you were hired prior to February 1, 1985, (other than BCAL Employees) and made Voluntary Contributions to the Plan (refer to the VOLUNTARY CONTRIBUTIONS section on page 3 for more information) and did not withdraw your Contributions to the Plan, you will receive an annual benefit at age 5

65 equal to 20% of your non-withdrawn Contributions. This benefit is in addition to the monthly benefit you will receive in the course of normal pension payments. Benefits associated with Voluntary Contributions will be reduced for early commencement in the same manner as your non-contributory pension as described on page 8. If you made Voluntary Contributions to the Plan you may withdraw your Voluntary Contributions (with interest) prior to your termination of employment. However if you are married you must obtain your spouse s written, witnessed consent to the withdrawal. If you withdraw your Voluntary Contributions to the Plan, the value of your final retirement benefit will be determined as though you had not made any Voluntary Contributions. Benefit Payment Options When considering how you would like to have your retirement benefit paid, there are several options available to you (though certain restrictions may apply). The option you choose may have an impact on how payment of your benefit is spaced out over time, possibly resulting in higher or lower monthly payments. The structure of your payment arrangement is taken into consideration when calculating your monthly benefit amount. For more information on the payment options available, see the BENEFIT PAYMENT OPTIONS section on page 12. CALCULATING YOUR PENSION BENEFIT Normal Retirement Age If you retire at age 65, the annual amount of your Normal Retirement Benefit is calculated as follows: ((1.60% of Final Average Salary) x (Years of Credited Service, including accumulated sick leave, up to March 31, 2011)) + ((1.35% of Final Average Salary) x (Years of Credited Service, on or after April 1, 2011)) If you are a non-union Employee, your Years of Credited Service used to determine your benefit under the Plan will be limited to 30, or the number of Years of Credited Service completed through March 31, 2011 (if greater), although your Final Average Salary will be determined by considering your eligible annual pay up to the date you terminate or retire from the Company. If you are a Union Employee, your Years of Credited Service used to determine your benefit under the Plan will be Years of Credited Service completed through September 30, 2003, and your Final Average Salary will be determined by considering your eligible annual pay up to January 31, 2010. Example Benefit Calculation at Normal Retirement Age Here's how it all works. Let's assume you retire at age 65 with 27 Years of Credited Service and 264 days of accumulated sick leave up to March 31, 2011 and 3 Years of Credited Service on and after April 1, 2011. Let's also assume your Final Average Salary is $47,000. Step 1 Multiply Final Average Salary by 1.60%, or.0160. $47,000 x.0160 = $752.00 6

Step 2 Multiply the result of Step 1 by Years of Credited Service up to March 31, 2011 (27 years plus 1 additional Year of Credited Service to reflect unused sick leave (taken from table on page 4-5)). $752.00 (from Step 1) x 28 = $21,056 $21,056 is a portion of your annual benefit to be used in Step 5. Step 3 Multiply Final Average Salary by 1.35%, or.0135. $47,000 x.0135 = $634.50 Step 4 Multiply the result of Step 3 by Years of Credited Service on or After April 1, 2011 (3 years). $634.50 (from Step 3) x 3 = $1,903.50 $1,903.50 is a portion of your annual benefit to be used in Step 5. Step 5 Add the results of Steps 2 and 4. $21,056 (from Step 2) + $1,903.50 (from Step 4) = $22,959.50 $22,959.50 is the amount of your annual benefit. Step 6 Divide your annual benefit by 12 to see your monthly benefit. $22,959.50 (from Step 5) / 12 = $1,913.29 In this example, $1,913.29 would be the amount of your monthly pension benefit for the rest of your life. See page 12 for payment options. The Plan provides, under certain circumstances, for a cost-of-living adjustment on the portion of your benefit (if any) accrued as of June 30, 1997 (for non-union Employees), or June 30, 1999 for (Union Employees). See page 16 for more information on the cost-of-living adjustment. If you were a participant in the BCAL Plan and withdrew your contributions with interest, your benefit will be reduced by the actuarial value of your refund. Note: IRS Regulations limit the amount of retirement benefits and the amount of compensation used in calculating retirement benefits. However, these limitations generally have an impact only on highly compensated employees. 7

Early Retirement If you are eligible and opt to commence benefit payments before age 65 (see page 8 for more information on Early Retirement), your benefit will be calculated in the same way as Normal Retirement benefits, but it will be reduced to reflect the fact that it will be paid over a longer period of time. If you decide to start receiving your benefit before age 65, your monthly payment will be reduced in one of two ways: 1) If you retire at age 55 with 5 years of service, your annual pension will be reduced by 5% of whichever is smaller: The number of years and completed months that your benefit commencement date precedes your Normal Retirement Date OR The difference between the number 85 and the total of your age plus your number of years of service (both determined in years and completed months). For benefits earned after April 1, 2011 for non-union Employees, in no case can the reduction be any less than the number of years and completed months before age 60. 2) If you retire at age 50 with 20 years of service, your pension will be reduced by 5% of the number of years and completed months that your benefit commencement date precedes your Normal Retirement Date. Note: For both Union Employees and non-union Employees, there is a provision, called the Rule of 85, which may enable you to retire early while not taking a reduction in retirement benefits. For Union Employees, you may begin your early retirement benefit without reduction if you are at least 55 years old and the sum of your age and years of completed service is 85 or more. For non-union Employees, the age at which benefits are unreduced under the Rule of 85 is as follows: o For benefits earned before April 1, 2011, the unreduced benefit may begin at age 55. o For benefits earned after April 1, 2011, the unreduced benefit may begin at age 60. Here are two examples to show you how Early Retirement benefits are calculated if you start receiving payments before age 65. Example One Early Retirement After Age 55 Let's assume you decide to retire at age 60 with 21 years of service. You do not qualify for unreduced benefits under the Rule of 85. Let's also assume that your Normal Retirement benefit would be $12,000 per year. If you choose to start receiving benefits right away, your monthly benefit would be calculated in the following way. Step 1 Determine the number of years by which your Early Retirement Date precedes your Normal Retirement Date. 65 years (Normal Retirement Age) 60 years (actual retirement age) = 5 years 8

Step 2 Multiply the number of years preceding your Normal Retirement Date by 5% (.05): 5 years (from Step 1) x.05 =.25 The.25 represents a potential 25% reduction to your annual pension benefit. Step 3 Find the total of your age in years and years of service. 60+21 = 81 Step 4 Subtract the sum in Step 3 from 85. 85-81 = 4 Step 5 Multiply the result of Step 4 by 5% (.05) 4 (from Step 4) x.05 =.20 The.20 represents a potential 20% reduction to your annual pension benefit. Step 6 The result of Step 5 (20%) will give a smaller reduction to your benefit than the result of Step 2 (25%), so in accordance with the Early Retirement formula, your retirement benefit will be reduced by 20%. In other words, you will receive 80% of your annual benefit (100%-20%). Step 7 Multiply your Normal Retirement pension by the result of Step 6. $12,000 x.80 (from Step 6) = $9,600. Your reduced Early Retirement annual benefit payable at age 60 is $9,600. Step 8 Divide your annual benefit by 12 to see your monthly benefit payment. $9,600 (from Step 7) / 12 = $800 In this example, $800 would be the amount of your monthly pension benefit for the rest of your life. See page 12 for payment options. 9

Example Two Early Retirement Before Age 55 Let's assume you decide to retire at age 50 with 20 years of service. Let's also assume your Normal Retirement pension at age 65 would be $9,000 per year. If you choose to start receiving benefits right away, your monthly benefit would be calculated in the following way. Step 1 Determine the number of years by which your Early Retirement Date precedes your Normal Retirement Date. 65 years (Normal Retirement Age) 50 years (actual retirement age) = 15 years Step 2 Multiply the result of Step 1 by 5% (.05): 15 (from Step 1) x.05 =.75 The.75 represents a 75% reduction to your annual pension benefit. In other words, you will receive 25% of your Normal Retirement pension. Step 3 Multiply the Normal Retirement pension by the result of Step 2: $9,000 x.25 = $2,250.00 (annual Early Retirement benefit) Step 4 Divide your annual benefit by 12 to see your monthly benefit payment. $2,250 (from Step 3) / 12 = $187.50 In this example, $187.50 would be the amount of your monthly pension benefit for the rest of your life. See page 12 for payment options. Example Three Rule of 85 Calculation for Non-Union Employees Let s assume you retire at 57 years old and have 27 Years of Credited Service as of April 1, 2011 and 3 Years of Credited Service after that time. Let s also assume your projected annual Normal Retirement pension at age 65 would be $12,000. Because you are over 55, and your age and Years of Credited Service is at least 85, you qualify to receive benefits accrued as of March 31, 2011 unreduced in Early Retirement. But because you are not yet 60, benefits accrued on and after April 1, 2011 will be reduced according to the Early Retirement After Age 55 formula above. Let s see how this works. Step 1 First we need to determine the portion of your annual Normal Retirement pension that is subject to reduction. 10

This is done by calculating the value of your benefit as of April 1, 2011 and subtracting that number from the amount you would receive if you were to retire at Normal Retirement Age ($12,000, as listed in assumptions). For the purposes of this example, let s assume the value of the benefit on April 1, 2011 is $11,000. Refer to the Benefit Calculation at Normal Retirement Age example on page 6. Since this portion of your benefit is not subject to reduction, it is calculated in the same way as it would be at Normal Retirement Age, even though you are taking Early Retirement. $12,000 (annual pension benefit at Normal Retirement) $11,000 (value of annual benefit as of April 1, 2011) = $1,000 In other words, only $1,000 of your annual pension at Normal Retirement is subject to reduction. Step 2 Next we need to determine by how much the $1,000 result of Step 1 will be reduced. To do this, we first need to determine the number of years by which your age at Early Retirement precedes the age needed to qualify for the Rule of 85 in effect as of April 1, 2011. 60 years (age needed to qualify for the Rule of 85 in effect as of April 1, 2011) 57 years (your age at Early Retirement) = 3 years Step 3 Multiply the number of years preceding the age needed to qualify for the Rule of 85 in effect as of April 1, 2011 by 5% (.05): 3 years (from Step 2) x.05 =.15 The.15 represents a 15% reduction to the portion of your annual Normal Retirement pension benefit that is not qualified for the Rule of 85 in effect as of April 1, 2011. You will receive 85% of this portion of your annual Normal Retirement pension benefit. Step 4 Multiply the dollar amount of your annual Normal Retirement pension benefit that is subject to reduction by.85 to determine the reduced amount for that portion of your benefit. $1,000 (portion of annual benefit subject to reductions) x.85 = $850 Of the $1,000 annual Normal Retirement benefit accrued on and after April 1, 2011, you will receive $850 to account for the longer duration of the payout resulting from Early Retirement. Step 5 Add the $850 from Step 4 to $11,000 (the portion of the accrued $12,000 annual Normal Retirement pension that is not subject to reduction). $850 + $11,000 = $11,850 $11,850 is your annual pension benefit if you retire at age 57. 11

Step 6 Divide your annual benefit by 12 to see your monthly benefit payment. $11,850 (from Step 5) / 12 = $987.50 In this example, $987.50 would be the amount of your monthly pension benefit for the rest of your life. See page 12 for payment options. If you are a Union Employee, all of your service (including years on or after October 1, 2003) will count for purposes of eligibility for Early Retirement. You may start to receive Early Retirement benefits as soon as you retire. Or, you can postpone receiving your Early Retirement benefits until age 65 to avoid any reductions that may apply. Late Retirement You may choose to work beyond your Normal Retirement Date (age 65). The benefit you receive when you actually retire will be calculated in the same way as a pension beginning on your Normal Retirement Date, but it will be based on your Years of Credited Service (the greater of 30 years or your actual years of Credited Service as of April 1, 2001) and Final Average Salary at the date of your actual retirement. If you are a Union Employee, Years of Credited Service as of September 30, 2003 and your Final Average Salary as of January 31, 2010 will be used to determine your benefit as of the date of your actual retirement. MAXIMUM BENEFITS Federal regulations place limits on the amount of benefits that can be paid to an individual from a retirement plan. The maximum annual benefit, assuming you start receiving payments at your Normal Retirement Date, is the lesser of your average compensation for the three consecutive highest paid years in the last 10 years you participated in the Plan, or $210,000 per year (based on 2014 IRS limits, subject to future change). This dollar amount is reduced if you start receiving payments before age 62. The rules concerning maximum benefits are complex. You will be notified and receive more information if you are affected by these rules. BENEFIT PAYMENT OPTIONS Different individual and family circumstances can naturally translate to different needs in retirement. As such, the Plan offers a number of different payment options to help accommodate these needs. Below is a description of each option, including any restrictions with each. Default Payment When you retire, if you don t elect otherwise, payments will be made in one of two forms. If you are married when you retire, you and your spouse will receive a Joint and 100% Survivor Annuity. Under this option, your spouse is guaranteed lifelong income after you die. After your death, your spouse will receive 100% of your benefit for the remainder of his or her lifetime. If you are not married when you retire, Plan benefits are normally paid as a Five Year Certain Option. Under this form of payment, you receive benefits for as long as you live. If you die before receiving 60 12

payments, remaining payments will be paid to your beneficiary (see page 14). If your beneficiary dies before a total of 60 monthly payments are made, the lump sum value of the remaining payments will be paid to your beneficiary s estate or designated beneficiary. Note: non-union Employees who terminated prior to June 30, 1997 and Union Employees who terminated prior to June 30, 1999, have different default payment options. Optional Forms of Payment You do not need to receive your benefits via the automatic Joint and 100% Survivor Annuity or Five Year Certain Option. Within 90 days prior to your benefit payments beginning, you can select one of the following payment options in place of the default payment method. Please note, if you are married and opt to have your pension paid in a form other than a Joint and 100% Survivor Annuity, you must have your spouse's written consent to do so. Your spouse's consent must be witnessed by a notary public or other person designated by the Pension Committee. Unless you indicate otherwise (and have your spouse's written, witnessed consent), you will automatically be enrolled in the Joint and 100% Survivor Annuity option. Lump Sum Option If the current value of your accrued benefit is less than $5,000 it will be paid to you in a lump sum. If the value is more than $5,000 and less than $8,000 you can elect (with spousal consent, if you are married) to receive a lump sum payment. When a lump sum payment is made, no further benefits will be payable to you under the Plan. Joint and 50% Survivor Annuity Under this option, you receive reduced payments during your life and your spouse is guaranteed lifelong income after you die. After your death, your spouse will receive 50% of your benefit for the remainder of his or her lifetime. Joint and 75% Survivor Annuity Under this option, you receive reduced payments during your life and your spouse is guaranteed lifelong income after you die. After your death, your spouse will receive 75% of your benefit for the remainder of his or her lifetime. Ten Year Certain Option Under this option, you receive payments during your life with a guarantee that at least 10 years (120 months) of payments will be made. If you die before receiving the 120 monthly payments, any remaining payments will be made to your beneficiary (see page 14). If your beneficiary also dies before a total of 120 monthly payments are made, the lump sum value of the remaining payments will be made to your beneficiary's estate or other designated beneficiary. Five Year Certain Option If you wish, you can receive benefits under the payment form available to unmarried employees. This means that you receive benefits for as long as you live. If you die before receiving 60 monthly payments, remaining payments will be made to your beneficiary. If your beneficiary dies before all guaranteed payments are made, the remaining lump sum value will be made to your beneficiary s estate or other designated beneficiary. 13

TAX CONSIDERATIONS Any benefits you receive from the Plan are subject to federal income taxes. Your benefits may be subject to state and local income taxes as well. If you elect a lump sum distribution, the Company is required to withhold federal income taxes equal to 20% of the taxable portion of your payment as well as any applicable state and local taxes, unless you roll over your distribution directly into a traditional IRA or to another qualified plan. Distributions paid before you reach age 59½ may be subject to an additional 10% early payment penalty tax. There are some exceptions. For example, the 10% penalty tax does not apply to: A lump sum payment that you roll over into a tax-deferred investment option such as an IRA or the qualified plan of another employer, within 60 days of receiving it, Annuity payments that are paid because you are retiring after attaining age 55, Annuity payments that are paid because your retire due to disability, Annuity payments that are paid to an alternate payee under a Qualified Domestic Relations Order (QDRO), or Annuity payments to your beneficiary on account of your death. You are responsible for complying with applicable federal, state and local tax laws and regulations when you receive the distribution. Because the tax laws are complicated and change from time to time, you should consult with a tax advisor at the time of your distribution to determine what laws and rules apply. SELECTING A PAYMENT OPTION If you wish to select one of the payment options previously described, you may do so by selecting the desired payment option in your retirement kit at the time of your retirement. Your request must be submitted before your benefits are scheduled to begin. You may submit the form to change your payment option more than once before your benefits begin, but once payments have started, you may not choose a different form of payment. SELECTING YOUR BENEFICIARY If you are married, you must submit your spouse s date of birth to the Pension Department. If you are single and die before you commence benefits, no benefit is available under the Plan to any beneficiaries. However upon commencement of payment, you must select a beneficiary for a Ten Year Certain or Five Year Certain form of payment. It is important to note that if you name someone other than your spouse as beneficiary, the law requires that your spouse consent in writing to your designation. All spousal consents must be witnessed either by a notary public or an individual designated by the Pension Department. If the written consent is not received, the law requires the Company to pay benefits to your surviving spouse in the event of your death, regardless of whom you named as beneficiary. If the beneficiary you named dies before you retire, your payment method is automatically canceled. At that time, you may select another payment method. If you do not choose another method, you will receive benefits as described under Default Payment (see page 12). 14

PRE-RETIREMENT SURVIVOR ANNUITY If you are married, you can ensure that your spouse receives your pension if you die before retiring. This is done through the Plan's pre-retirement coverage. If you die before you retire and you are Vested, you are eligible for pre-retirement coverage. This coverage will pay benefits to your spouse beginning on the date you would have reached your Normal Retirement Date. However, your spouse may elect to have payments commence as of any month after your death provided you were eligible for an immediate pension, or any month from such date to what would have been your Normal Retirement Date. If you would not have been eligible for an immediate pension at the time of your death, your spouse can elect to receive the benefit starting at any date between the date you would have reached age 55 (age 50 if you had 20 years of service) and your Normal Retirement Date. There is a reduction in the benefit you (and your spouse) ultimately receive to cover the cost of insuring your pension for any period that you are not actively employed by the Company. There is no charge while you are actively employed by the Company (provided you are not a Suspended Member see page 18) or on long term disability provided that you had completed at least 10 years of service when your disability benefits began. The period of the pre-retirement annuity coverage will begin on the later of: the date you complete 5 years of service OR the first day of the Plan Year you reach age 35 Effective as of January 1, 2004, the benefit payable to your spouse will be 100% of your accrued benefit, reduced for early commencement, if applicable, regardless of your age on the date of your death. The cost of coverage under the 100% Survivor Annuity will be based on age and accrued benefit to date: For each 12 months between ages 35 and 45 1/16 of 1% For each 12 months between ages 45 and 55 1/8 of 1% For each 12 months after age 55 1/2 of 1% You can waive this coverage at any time, but you must have your spouse's written, witnessed consent to do so. Pre-retirement survivor annuity coverage stops at your death or when pension payments begin. DEATH BENEFIT AND VOLUNTARY CONTRIBUTIONS The two previous sections describe what happens to your pension benefits in the event of your death both before and after your planned retirement date. But Voluntary Contributions (see VOLUNTARY CONTRIBUTIONS section on page 3) are handled a bit differently. If you made Voluntary Contributions to the Plan or to the BCAL Plan and die before retirement, your beneficiary will receive a lump sum equal to twice the value of your non-withdrawn contributions with interest. This payment would be in addition to any pre-retirement surviving spouse pension. If you die after your benefit payments have commenced, your beneficiary will receive a lump sum payment equal to twice the total of your non-withdrawn contributions with interest, less the pension payments you had already received. 15

If your retirement benefits are being paid under one of the Joint and Survivor Annuity options or Ten or Five Year Certain options, and if both you and your beneficiary die before an amount equal to at least twice your non-withdrawn contributions with interest has been paid, the balance will be paid to the designated beneficiary (if any) or the estate of the last person to receive benefits. COST OF LIVING ADJUSTMENT (COLA) An important feature of the Plan is a provision to automatically increase, after retirement, pension benefits accrued as of June 30, 1997 for non-union Employees and June 30, 1999 for Union Employees to help keep pace with increases in the cost of living. Here's how the cost of living adjustment works. Each October 1, the portion of your monthly pension that was accrued as of the dates above will be adjusted to reflect changes in the cost of living whenever the U.S. Department of Labor Consumer Price Index changes by 2% or more in the course of a year. A year is measured from June to June. Your Base Month will be June in the year that you retire. The adjustment factor will be determined each year by dividing the Consumer Price Index for June of that year by the Index for the base month. This adjustment factor will always be positive. Therefore, the pension you receive when you first retire won't be reduced even if the Consumer Index goes down. Increases are limited to 2% for each year of retirement, and they apply to your pension from both the noncontributory and contributory parts of the Plan. Example Cost of Living Adjustment Let's assume you are a non-union Employee and retire with a total monthly benefit of $1,485, of which $1,000 was accrued as of June 30, 1997. On October 1 of each year, the $1,000 would be eligible for a cost of living increase. If the adjustment is 2%, your monthly benefit will increase by $20 (.02 times $1,000). You will now receive a monthly benefit of $1,505.($1,485 plus $20). The following October, you would have $1,020 eligible for a cost of living increase (the $1,000 that was eligible from the year before PLUS the $20 cost of living adjustment to that $1,000). So, if the adjustment in Year 2 is also 2%, your monthly benefit will increase by $20.40 (.02 times $1,020). You will now receive a monthly benefit of $1,525.40 ($1,505 (total monthly benefit after Year 1 cost of living adjustment) plus $20.40). YOUR PLAN AND SOCIAL SECURITY During your working career, the Company shares the cost of Social Security with you. When you retire, you receive benefits from the Plan as well as Social Security benefits. Please remember, Social Security benefits are not paid automatically. You must apply for them. To get more information about the Social Security laws and how they can affect you, contact your local Social Security office, or visit www.socialsecurity.gov. SPECIAL PROVISIONS If You Leave the Company If you leave the Company after you are Vested, you are entitled to receive a benefit from the Plan. Your benefit will be determined based on your pay and service at the time you leave, and will be payable at age 65 ¾ or as early as age 50 if you have at least 20 years of service or age 55 if you have at least 5 16

years of service. If you decide to start receiving your benefits before age 65, your benefit may be reduced. Refer to Early Retirement on page 8 for more information. If the value of your vested benefit is $5,000 or less when you leave the Company, it will be paid to you as a lump sum. If the value of your benefit amount is greater than $1,000 and you do not elect to receive it in cash or have it paid directly to an eligible retirement plan, then the value of your benefit will be rolled over directly to an individual retirement account (IRA) established in your name. If You Become Disabled If, after you complete 10 years of service, you become totally disabled as determined under the Company s long term disability plan and entitled to benefits, you will continue to earn Years of Credited Service toward your retirement benefit until you reach age 65. For non-union participants, your age 65 retirement benefits will be determined by using your pay level in effect immediately before you became disabled, plus pay increases based on increases in the Consumer Price Index beginning in March of the year following the year you become disabled until March of the year preceding your Normal Retirement Date, as if you had remained actively employed until age 65. If you are a Union Employee disabled as of September 30, 2003, your benefits will be determined based on negotiated increases in pay scale from your date of disability to your Normal Retirement Date, or the date you are no longer deemed disabled, if earlier, but in no event later than February 1, 2010. If you are no longer disabled at any time before your 65th birthday and do not return to active employment within 60 days thereafter, your benefits will be based on the formula that is applied to employees eligible for Early Retirement or Vested termination benefits, as applicable. Re-employment During your career with the Company you may leave for a period of time and then return to work. In some cases, you may lose credit for your prior years of service. Break-in-Service Your service with the Company is considered interrupted, a Break-In-Service, under either of the following conditions: You resign, or are discharged and are not rehired within 12 months after you leave OR You do not return to work within 12 months after the end of an approved leave of absence. If you left the Company and were later rehired on or after April 1, 1975, you regained credit for your prior service provided one of the following applies: You were Vested before the Break-in-Service The Break-in-Service was less than five consecutive years OR The length of time of the Break-In-Service, if more than five years, is less than your total service before the Break-in-Service 17

If you received any benefits from the Plan when your Break-In-Service occurred, payments will stop when you are re-employed. When you again begin to receive benefits, they will be based on your Years of Credited Service before termination and after re-employment. These benefits will be reduced to reflect any taxable benefits you had already received. In certain circumstances absences due to approved leave or a leave for qualified military service with the US Armed Forces may not result in a Break-In-Service. In addition, an absence for maternity or paternity reasons (including adoption) which lasts less than two years will not be considered a Break-In-Service. Also, if you take leave under the Family Medical Leave Act of 1993, you will be treated as having continued service to the extent necessary to prevent a Break-In-Service. If you leave the Company to enter into qualified military service as described above and you return to employment with the Company you may also be entitled to Credited Service for the time you were in the military. Suspended Members If you are no longer in an employment class eligible for coverage under the Plan, but are actively employed by the Company, you are considered a Suspended Member. In such case, you continue to earn service credit toward Vesting but do not accumulate Years of Credited Service for additional benefits. When you retire or terminate employment with Vested rights to deferred benefits, your pension is based on your Years of Credited Service and Final Average Salary as of the date you became a Suspended Member. If you resume your status as an employee eligible for coverage under Plan, your Years of Credited Service will restart as of the first of the month coinciding with or next following your resuming active status. You Retire and Return to Work If you retire from the Company and begin receiving benefits from the Plan and then return to work for the Company, benefit payments will be suspended. If you were Vested when you left and are rehired after you begin receiving benefits from the plan, you are eligible to participate in the Plan immediately upon reemployment. The years of service you had earned before you left will be restored for Vesting purposes. When you leave again, the benefit you had earned since your rehire date will be reduced by the value of the payments you have already received. However, your benefit amount will not be less than the amount you were receiving before you were rehired. You Go on an Approved Leave of Absence If you take an approved paid leave of absence (including short-term disability leave), you will continue to participate in the Plan as if you were an active employee for purposes of Vesting and benefit accrual. You cannot start receiving your retirement benefits. You Go on Military Leave The Uniformed Services Employment and Reemployment Rights Act of 1994 (USERRA) guarantees certain rights to eligible employees who enter military service. The terms Uniformed Services or Military Service mean the Armed Forces (i.e., Army, Navy, Air Force, Marine Corps, Coast Guard), the reserve components of the Armed Services, the Army National Guard and the Air National Guard when engaged in active duty for training, inactive duty training, or full-time National Guard duty, the commissioned corps of the Public Health Service, and any other category of persons designated by the President in time of war or national emergency. 18

Upon reinstatement, you are entitled to the seniority, rights and benefits associated with the position held at the time your employment was interrupted, plus additional seniority, rights and benefits that would have been attained if your employment had not been interrupted. These rights include service credit under the Plan for purposes of calculating a benefit and becoming vested. Such leave will not be considered a Break-in-Service. If you die while performing qualified military service, your spouse or beneficiary will be entitled to any benefits (other than benefit accruals, if any, relating to the period of qualified military service) that would have been provided under the Plan if you had been reemployed by the Company and died while an employee. If you think you may be eligible for these special rights under USERRA, contact the Pension Department at (212) 716-0467. ADMINISTRATION OF PLAN Plan Administrator The administration of the Plan is the responsibility of the Plan Administrator, which is the Pension Committee. The Pension Committee has the authority to interpret the Plan provisions and to exercise discretion where necessary or appropriate in the interpretation and administration of the Plan, You can contact the Pension Committee by writing or calling: Pension Committee c/o Pension Department British Airways 2 Park Ave, Suite 1100 New York, NY 10016 (212) 716-0467 To the extent permitted by law, the Plan Administrator has exclusive discretion to determine all matters relating to the Plan, including (but not limited to) eligibility, coverage and benefit determinations. The Plan Administrator may delegate any of its duties and responsibilities to one or more persons or entitles. Such delegation of authority must be in writing and must identify the delegate and the scope of the delegated responsibilities. Decisions by the Plan Administrator, or any authorized delegate, will be conclusive and legally binding on all parties. Cost of Administering the Plan The Company intends to pay certain expenses of administering the Plan. To the extent that the administrative costs of the Plan are not paid by the Company, they will be paid out of the Plan's trust. PLAN DOCUMENT The SPD is intended to help you understand the main features of the Plan. It should not be considered a substitute for the Plan document, which governs the operation of the Plan. That document sets forth all of the details and provisions concerning the Plan and is subject to amendment. If any questions arise that are not covered in the SPD or if the SPD appears to conflict with the official plan document, the text of the official Plan document will determine how questions will be resolved. To request a copy of the Plan document, contact the Pension Department. PLAN TRUSTEE The Trustee for the Plan is State Street Bank and Trust Company. 19