Re Agreement

BAE SYSTEMS PLC
01 March 2007



1 March 2007



BAE SYSTEMS AND MoD PAVE WAY FOR FIXED WING PARTNERING AGREEMENT



Warton, United Kingdom. - An important step towards a Long Term Partnering
Agreement (LTPA) between BAE Systems and the UK Ministry of Defence (MoD),
covering the support and upgrade of the current and future fixed wing aircraft
fleet, was taken today, Thursday 1 March 2007, when the LTPA Foundation Contract
was signed by the two organisations.



This announcement is significant in that it provides a framework for detailed
negotiations aimed at signing a long term full and legally binding LTPA before
the end of this year.  Such an Agreement is a key target set out in the fixed
wing chapter of the MoD's Defence Industrial Strategy (DIS) of December 2005.



The Foundation Contract also includes incentives for BAE Systems to further
transform its air sector business aimed at the cost-effective and efficient
delivery of industrial capabilities to the long-term benefit of both BAE Systems
and the MOD.  BAE Systems' long-term goal from an LTPA, which has been
acknowledged by the MOD, is to establish a sustainable air sector business that
supports the Front Line whilst also delivering the opportunity for the Company
to earn profit.







Issued by

BAE Systems plc

London




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