BAA Update On Duty Free Position.

LONDON--(BUSINESS WIRE)--Oct. 1, 1999--

BAA plc, the UK-based airport company, today announced that in line with the announcements of some duty free operators, BAA confirms that the early effects of the loss of intra-EU duty free at its airports and at Eurotunnel have been somewhat worse than expected, but as a result of management action the sales trend is showing improvement in September. A major reason for the reduction in duty free sales being larger than expected appears to be customer confusion as to the effect of the new rules following the abolition of intra-EU duty free. In fact the majority of products sold at BAA's airports remain available at duty and tax free prices to all passengers, wherever their destination.

In the six months to September 1999, World Duty Free Americas also traded a little below last year.

Following the loss of intra EU duty free it is not possible at this early stage to evaluate fully the overall group position which is still evolving, but it currently appears likely that the group pre-exceptional profits for the year ending March 31, 2000 will be below present city expectations. BAA will make an updated statement on November 1, 1999 when it announces its interim results.

BAA ordinary shares trade on the London Stock Exchange; prices may be accessed on Bloomberg under the symbol BAA LN, on the Reuter Equities 2000 Service under BAA.L and on Quotron under BAANU.EU. BAA ADRs, each equal to one ordinary share, appear on the pink sheets under BAAPY. Additional information is available on BAA's home page: http://www.baa.co.uk.