Competition Commission to Begin Scheduled Review of BAA

Business Wire, March 6, 2002

Business Editors

LONDON--(BUSINESS WIRE)--March 6, 2002

The Civil Aviation Authority (CAA) has initiated the next stage of the regulatory review for BAA's London Airports by referring them to the Competition Commission and publishing today its detailed recommendations (which are available on the CAA website at www.caaerg.co.uk).

BAA looks forward to engaging in discussion with the Competition Commission but broadly welcomes the CAA recommendations, in particular that airport charges at Heathrow should rise. There are a number of financial and technical issues outstanding from the CAA referral document which will be discussed further with the Commission.

BAA notes that the CAA's recommendations to the Competition Commission are a further stage in the review process which is not expected to conclude until the end of 2002.

Background note

The CAA proposals are based, inter alia, on their forecast for the traffic that will pass through the airports, which is contained in the referral document, and also on a range of capital expenditure and other financial scenarios submitted to the CAA by BAA. This range was produced to progress the regulatory review and must be distinguished from BAA's current ten year capital expenditure and passenger traffic forecast, based on BAA's 2002 Business Plan, which is in preparation and will be published in full on 19 April. This forecast will also be submitted to the Competition Commission.

BAA's international contracts include in the U.S.: Pittsburgh, Indianapolis, Boston Logan; in Australia: Melbourne, Launceston, Perth, Alice Springs, Tennant Creek and Darwin; in Continental Europe: Naples; in the Middle East: Seeb International and Salalah in Oman; in the Indian Ocean: Mauritius.

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.com.