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International Management In British Airways Company

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"Passenger revenue" is initially recorded as a liability for sales in advance of the carriage, with revenue from ticket sales recognized at the time that the Company provides the transportation. In respect of unused ticket revenue recognized, estimations are needed based on historical trends regarding liability for tickets sold but not yet processed, the timing and amount of tickets used for travel on other airlines and the number of tickets sold that will not be used. These are used to determine the timing and amount of unused ticket revenue recognized. Changes to these estimation methods could have a material effect on the presentation of the financial results. Periodic evaluations are performed of the estimated liability for tickets sold but not yet processed. Any adjustments, which can be significant, are included in results of operations for the periods in which the evaluations are completed. These adjustments relate primarily to differences between the statistical estimation of certain revenue transactions and the related sales price as well as refunds, exchanges, interline transactions and other items for which final settlement occurs in periods subsequent to the sale of the related tickets at amounts other
The Company’s "cargo" business is operated as a contribution center.
This allows the maximization the use of its scheduled route network to provide a worldwide cargo service. The management group utilizes trucks to feed cargo to its major hubs in Europe and the United States.
"Revenue" is recognized when the transportation service is provided. Passenger ticket and cargo waybill sales, net of discounts, are recorded as current liabilities in the ‘sales in advance of carriage’ account until recognized as revenue.