§ Mr. George Rodgersasked the Secretary of State for Trade whether he has determined a new financial target for British Airways to run from 1 April.
§ Mr. John SmithYes. In accordance with section 13 of the British Airways Act 1977 I have decided that a reasonable financial duty for British Airways would be to achieve on average a rate of return of 6 per cent. p.a. before interest but after supplementary depreciation on mean net assets revalued at current cost over the three financial years 1979–80 to 1981–82.
This target is set in accordance with the principles given in Cmnd. 7131. It is designed to be consistent with British Airways earning a rate of return of at least 5 per cent. in real terms on new investment. It also takes into account British Airways' aim to maintain its share of the international airline market. It implies increases in the productivity both of aircraft and of employees.