Re Contract

Serco introduces new aircraft, King Air B200, to the Royal Air Force through  
        newly awarded £60 million RAF Cranwell Multi-Activity Contract         

Serco Group plc ('Serco') today announced that it has been awarded the
prestigious RAF Cranwell Multi-Activity Contract (MAC) and Multi-Engine Pilot
Training Interim Solution. The contract will also feature the introduction of a
new aircraft, the King Air B200, to the Royal Air Force ('RAF') for pilot
training.

This UK Ministry of Defence ('MoD') contract is valued at approximately £60
million over five years, with options for three one year contract extensions.

This innovative contract by Serco will provide a range of flight training and
support services to RAF Cranwell. The flight training aspects include some
5,500 flying hours per year on the King Air B200 aircraft and 3,000 simulator
hours per year. The MAC services include Management and Administration,
Aircraft Maintenance and Mechanical Support Facilities, A/C Avionic and
Electrical Support Facilities, Media Services, Communications Information
Systems, MT Operations and Maintenance, Supply Support, Fire and Crash Rescue
Services, Aptitude Testing Team and Aircraft Leasing. The King Air B200 will be
leased by Serco from Raytheon Aircraft Company.

The contract comes into full effect on 1 April 2004, when some 350 staff will
transfer from the incumbent contractor to Serco.


Commenting on the award, Christopher Hyman, Serco Group Chief Executive said:

'This is a significant contract award for Serco. We have a strong track record
of successful service provision to the RAF and are delighted that the
acceptance of our innovative aircraft leasing solution will introduce the King
Air B200 to RAF service. This aircraft is the ideal platform solution to meet
the RAF's training requirements for pilot training. Aircraft procurement
skills, combined with value for money through life support solutions, will be
key skills for the future Military Flying Training System (MFTS) project
service'.

Nigel J Eadon-Clarke, Commercial Manager for Training Group Defence Agency
commented:

'This is the most important contract award that the RAF Personnel and Training
Command has made in some years. We look forward to placing the contract `in the
drawer' and leaving Serco and RAF Cranwell to work together to produce an
outstanding success that can be a model for future MOD contracting. '

                                   - Ends -                                    

For further information please contact Serco Defence:

T [phone]

Ben Woodford Corporate Communications Director, Serco Group

Katherine Stedman Communications Manager, Serco Defence

Notes to Editors

  * Serco Group is an international provider of management services to
    government and industry. The company covers a wide range of activities,
    from controlling satellites and operating computer networks for the
    European Space Agency, to managing and operating the Docklands Light
    Railway where Serco was recently voted National Rail Operator of the year.
   
  * Serco Defence provides task management, operational and logistic support
    services to the UK Ministry of Defence, NATO defence forces, civil aviation
    and related industries within the UK and Europe.
   
  * Serco Defence provides a comprehensive support services capability in
    Marine and Port services, Property and Estate Management, Military and
    Civil Aviation, Total Facilities Management and Multi-Activity Contracts.
    Serco Defence specialises in developing innovative integrated solutions for
    Private Finance Initiatives and Public Private Partnerships such as Joint
    Services Command and Staff College, Medium Support Helicopter Aircrew
    Training Facility and Skynet 5.
   
  * Serco Defence has wide ranging and proven capability in the delivery of
    aircraft engineering and associated support services for a comprehensive
    variety of military aircraft, ranging from military helicopters, to
    training aircraft, fast jets and turboprops for all three services.
   
  * More information on Serco can be found at www.serco.com
   
  * The King Air B200 has a proven operational flexibility in a variety of
    roles, including maritime surveillance and training. The aircraft is used
    in special mission capacities around the world because of its combination
    of low operating costs and high performance.
   
  * The 'middle sister' of the Beechcraft King Air family, the B200 has become
    the best-selling turboprop business aircraft ever produced with more than
    2,000 now delivered into operation around the world - 700 in-service in
    special mission operations with governments.
   
  * Raytheon Aircraft designs, manufactures, markets and supports Beechcraft
    and Hawker aircraft for the world's commercial, military and regional
    airline markets.