By John Bowker

LONDON (Reuters) - British Airways (BAY.L: Quote, Profile, Research) Chief Executive Willie Walsh said on Wednesday he was aware of problems with Heathrow's Terminal 5 building before its opening and had discussed delaying its first day.

Speaking to the British Government's Transport Committee, Walsh said delays to the building of the terminal had led to a compromise on both baggage systems testing and staff familiarisation with the terminal's workings.

The March opening of the $8.6 billion Terminal 5 descended into chaos, as hundreds of flights were cancelled and thousands of items of baggage lost.

Baggage systems failed, while staff struggled with parking, access and security problems in what was seen as a disaster for BA, the UK as a whole and airports operator BAA, owned by Spain's Ferrovial (FER.MC: Quote, Profile, Research).

Asked whether he had been aware of problems before the opening, but had decided to go ahead with it anyway, Walsh said he had.

"We believed that, while there were known risks, the opening would be successful," he said.

He said that with hindsight he realised the airline had "compromised" on both the testing of baggage systems and the familiarisation of staff with the new building before the opening day.

"The training programme was not sufficient. The environment was a building which was not fully complete -- a building different from that entered on day one," Walsh added.