Re Agreement

BAE SYSTEMS PLC
10 December 2004



EADS and BAE SYSTEMS give go ahead for Airbus to offer the A350

   •New aircraft with two variants
   •Entry into Service 2010

Amsterdam / London, 10 December 2004 - EADS and BAE SYSTEMS have given the go
ahead for Airbus to offer a new member of its wide-body family to airlines
around the world. Airbus can now begin making firm commercial offers to launch
customers for a new model called 'A350' (Authorisation to offer - ATO). The new
aircraft is a 'sister' to the A330s and will be available in two versions.

Already in the early concept phase, the A350 proposition has received an
extremely positive response from Airbus customers, many of which have expressed
interest and contributed to the concept development.

'The A350 will deliver value not only to Airbus customers but also to its
shareholders. The new aircraft will be at the forefront of our ongoing strategy
of offering our customers the most up-to-date passenger aircraft in the world',
explained the Chairmen of the EADS Board of Directors, Manfred Bischoff and
Arnaud Lagardere in support of the decision.

'Airbus has presented a strong business case for the launch of this very
significant new aircraft,' said Mike Turner, CEO of BAE Systems. 'The A350 will
contribute strongly to the outstanding Airbus family success story.'

EADS' and BAE Systems' decision for the 'Authorisation to Offer' (ATO) follows
an extensive review of the global market. Detailed analysis and intensive
discussions with Airbus customers have confirmed strong market demand for an
aircraft of the size and design and with the high-level of efficiency proposed
by Airbus with its A350. Market demand in this particular segment is estimated
to be 3,100 units over the next 20 years.

'The A350 will strongly contribute to EADS' long-term business strategy and
profitable growth. The technological and financial resources of EADS give us the
flexibility to pursue promising projects like the A350 and others with a high
potential to move the aerospace industry forward,' EADS CEOs Philippe Camus and
Rainer Hertrich said. 'Moving forward with a new long range aircraft is of great
importance for the future competitiveness of Airbus' product range as a whole.
It will allow for sustained and higher value creation without impeding our
medium term target to achieve double digit EBIT margin at EADS. '

Many of the cutting-edge technologies which are currently being developed for
the A380 will be transferred to the A350 allowing for strong synergies in
development and enhanced efficiency in the production.


The A350 is to be offered in two different passenger versions with capacities
ranging from 245 to 285 seats and is set to become another flagship of Europe's
aerospace industry. Entry into service of the A350 is scheduled for the first
half of 2010.

Issued by

BAE Systems plc

London






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