Acquisition option

easyJet PLC
8 May 2002

Embargoed until 06.59

Wednesday, 08 May 2002


      easyJet plc ('easyJet') and British Airways plc ('British Airways')


              HEADS OF TERMS AGREED FOR EASYJET TO ACQUIRE OPTION

                        TO PURCHASE DEUTSCHE BA ('DBA')


easyJet plc (LSE: EZJ) and British Airways plc (LSE: BAY) today announced that
agreement has been reached on the terms under which easyJet will have an option
to acquire British Airways' German subsidiary, DBA. DBA has a fleet of 16 Boeing
737-300s and carried more than three million passengers in the year to 31 March
2001.


  • easyJet has signed heads of terms with British Airways under which easyJet
    will be granted an option to acquire DBA at any time up to 31 March 2003,
    extendable by easyJet to 3 July 2003.

  • As consideration for the option, easyJet has committed to second three
    managers, contribute €5 million for capital expenditure to assist DBA's
    transition towards a low-cost airline model and has agreed to pay an
    additional €600,000 per month until exercise of the option.

  • If easyJet exercises the option, it will pay a further amount of between
    €30 million and €39 million to British Airways (depending on when it
    exercises the option).

  • The German market presents significant growth opportunities for easyJet
    and the acquisition of DBA and its transformation into a low-cost airline
    may represent the most attractive option for easyJet to enter the German
    market.

  • The acquisition of DBA would immediately provide easyJet with a
    significant German network and the personnel, systems and infrastructure to
    support such an operation.

  • In the financial year to 31 March 2001 DBA had a turnover of €344 million
    (approximately £212 million) and carried more than three million passengers.
    DBA operates a scheduled service on seven German domestic routes. It
    operates 130 flights per day, has a fleet of 16 Boeing 737-300 aircraft and
    employs approximately 800 staff.

  • easyJet and British Airways have committed to execute legally binding
    documentation giving effect to the heads of terms by 30 June 2002.

Ray Webster, Chief Executive of easyJet, said:

'Germany is the biggest domestic air market in Europe. But it is very poorly
served by low-cost airlines, especially in comparison to the UK. We therefore
believe that the German market has the potential to develop into a key European
market for low-cost airlines and we want to be part of that development.

'This arrangement gives us the opportunity to establish easyJet as the largest
low-cost airline in Germany in one step and enhance our growth opportunities.

'In obtaining an option to acquire DBA, we have created the space we need to
consider acquiring the airline outright. We will use the time granted to us
through the option to ensure that the acquisition is well planned and is in the
interests of our shareholders and the employees and customers of both
organisations'.

Roger Maynard, Chairman of DBA, said:

'DBA's future lies in the no-frills market and the approach by easyJet to
acquire it is a real vote of confidence in DBA. DBA's focus on the German
domestic market means there is no longer a strategic rationale to retain DBA in
the British Airways group. The deal will also enable us to continue to focus on
full service operations. The decision to sell DBA is in line with British
Airways' Future Size and Shape package of measures to reduce costs and return
the overall business to profitability.'


Credit Suisse First Boston is acting as financial advisor to easyJet.

Enquiries:

easyJet

Toby Nicol, easyJet          + 44 (0) 1582 525339

Charles Cook, Grandfield     + 44 (0) 20 7417 4170

Clare Abbot, Grandfield     + 44 (0) 20 7417 4170

British Airways

Press Office               [phone]

Credit Suisse First Boston

Michael McGhee               [phone]

Richard Crawley               [phone]


Notes:

DBA was founded in 1992. It operates on seven of the eleven major trunk routes
within Germany, and has just announced its intention to commence services from
Munich to Malaga in June. It operates from two hubs - at Berlin Tegel and
Munich. It operates 130 flights per day and serves routes with a minimum of
seven frequencies per day.


easyJet is planning the following communications:

A briefing for analysts will be held at 09.00 on Wednesday, 8 May 2002 at Credit
Suisse First Boston, City of London Office, 32nd Floor, Tower 42, International
Financial Centre, 25 Old Broad Street, London EC2N 1HQ. For further details
contact Clare Abbot at Grandfield on [phone].


A press conference will be held at 10.30 on Wednesday, 8th May 2002 at
Bishopsgate Chancery, The Great Eastern Hotel, Liverpool Street, London EC2M
7QN. For further details contact Clare Abbot at Grandfield on [phone].


There will be a conference call for fund managers and analysts at 14:30 on
Wednesday, 8 May 2002. For further details contact Nicola Heatley at CSFB on +44
20 7888 6367.




                      This information is provided by RNS
            The company news service from the London Stock Exchange