BA board decides if boss still gets £600,000

The board of British Airways will meet this week to decide whether chief executive Willie Walsh should be awarded a performance bonus of more than £600,000 after the Heathrow Terminal 5 fiasco.

The board meeting is to take place on Thursday, before BA's full-year results on Friday. It will be the first full-scale board meeting since the disastrous opening of T5, which saw passengers stranded as hundreds of flights were cancelled after the collapse of the terminal's baggage-handling system.

High on the agenda will be the issue of what should happen to directors' bonuses as a result of the fiasco, because it hit at the very end of the group's financial year. Walsh will be in line for the payout - equal to one year's salary - if BA's annual results are in line with City forecasts.

BA, it emerged this weekend, has hired headhunters to find a new chief operating officer to replace the two managers sacked after the T5 fiasco. The group dismissed as "premature" talk that the new director will be a replacement for the airline's under-fire chief executive.

There will also be fierce debate among directors about whether the company should pay a dividend for the first time since 2001.

Despite the £16m cost of the five days of T5 problems that fall in the past financial year, BA is expected to hit or at least come very close to its profit margin targets - so restoring the dividend will still be on the agenda.

Chris Avery, JP Morgan's aviation analyst, recently warned investors against being overly optimistic about a payout.

He believes a prudent board would not restart payments if there is a risk they will have to cease again in the short term, something that could happen if the oil price remains high.

T5 opened its doors on March 27 and, despite almost 20 years of planning, design and construction, the £4.3bn terminal quickly turned into a public relations and customer service disaster as a result of problems with the baggage-handling system and what were described as "staff-familiarisation issues" with the building itself.

More than 500 flights were cancelled in the first week and almost 30,000 bags were separated from their owners.

The disaster led to the sacking of Gareth Kirkwood, director of operations at BA, and David Noyes, head of customer relations, as Walsh took personal charge of running the terminal.