BAA Wins Boston Logan Airport Retail Contract.

Business Editors

LONDON--(BUSINESS WIRE)--July 5, 2000

BAA plc, the UK-based airport company, today announces the signing of its fifth US contract, to manage the retail and catering operations for Boston Logan International Airport's two main terminals (B and D/E) reinforcing BAA's position as the leading commercial airport company in the US and across the world.

The 10 year contract for the airport's Terminals B and D/E has been awarded by airport owner and operator, the Massachusetts Port Authority (Massport) after a competitive bid. The contract commences January 2002, with an interim management contract from August 1 this year.

BAA's international retail division will develop and manage the retail concession activities of 83,700 square feet of space in the two terminals as part of Massport's $2 billion modernization program to improve services for its passengers. BAA will be investing $5.5 million and with subtenants a total of $14 million over the term of the contract in redeveloping and re-fitting the main terminal at the airport, Terminal D/E, which primarily serves the international market. The retail concept will focus on developing both a local and international flavor to appeal to the discerning domestic and international leisure and business passenger who typically uses the airport.

The two terminals account for approximately 15 million of the total 27 million passengers using the airport, with steady increases expected in traffic year on year of between 2% and 3%.

Mike Hodgkinson, BAA's chief executive said "We are keen to bring our expertise to the airport and to contribute to the impressive developments under way in partnership with Massport. This contract is part of our strategy to focus on our core airports business and to seek opportunities globally. It is similar to the one we have operated in Pittsburgh since 1992, where we have grown the spend per departing passenger from $2.40 to $9.15. Winning Boston, one of the busiest US airports, enables us to further consolidate our leading position in the US and continue to grow our US business through a performance based, value added contract."

Massport's Executive Director and CEO, Virginia Buckingham said "A world-class city deserves a world-class airport. Bringing in BAA guarantees our customers first class concessions in our terminals."

Background

BAA PLC INTERNATIONAL BUSINESS

BAA international has interests in 9 airports abroad including 5 in the USA. It operates the retail contracts at Boston Logan Terminals B,D/E, Pittsburgh and Newark Terminals A and B. BAA part owns and manages airport operations and retail for Melbourne, Launceston and Naples and has management and retail contracts (no stakeholding) for Mauritius, Indianapolis and Harrisburg.

BOSTON LOGAN INTERNATIONAL AIRPORT 

Logan International Airport serves as a gateway to New England. Covering 2,400 acres, the airport is situated approximately 3 miles from downtown Boston and adjacent to Boston Harbor. The airport is operated by the Massachusetts Port Authority (Massport), the independent public authority which develops, promotes and manages the airports, seaport and transportation infrastructure to enable Massachusetts and New England to compete successfully in the global marketplace.

In 1999 total passenger numbers increased 2.5% to over 27 million. In 1998, over 26.4 million travellers (19.8 million domestic passengers and 3.8 million international passengers and general aviation passengers) and 800 million pounds of cargo passed through the airport. Total passenger volume increased by 3.8% from 1997 to 1998.

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.