BAE SYSTEMS CANADA WINS CP-140 AURORA AVIONICS MODERNIZATION PROJECT - selects Targa Series 3 CDR

BAE SYSTEMS CANADA (TSE, AMEX: BAE) (formerly Canadian Marconi Company) announces that it has been awarded the CP-140 Aurora Navigation and Flight Instruments Modernization Project by the Canadian Department of National Defence (DND). BAE SYSTEMS CANADA will act as prime contractor, systems integrator and avionics management systems supplier for this $58 million (excluding tax) contract.

As prime contractor, BAE SYSTEMS CANADA will have total responsibility for a turnkey project that provides proven avionics equipment and significantly enhanced systems reliability, to support existing missions, while providing a clear growth path to meet future performance requirements and incremental system upgrades.

This DND program represents a major initiative aimed at sustaining the CP-140 Aurora's long-term capabilities. The CP-140 Aurora long-range patrol aircraft must remain capable of supporting combined multinational missions as well as independent assignments in both domestic and international, civilian and military situations. The Canadian-designed system will provide DND with a solution that is both forward looking and ensures compatibility and interoperability with Canada's allies.

Jim Close, President and CEO, BAE SYSTEMS CANADA, stated: "We are very proud that the Canadian Government has chosen our product as the most technically advanced and cost-effective solution. This selection will provide leverage for us in bidding other contracts worldwide dealing with P-3 (the CP-140 is a P-3 derivative) aircraft programs. The global P-3 upgrade market is estimated at over $1.0 billion. The Canadian CP-140 project award, coupled with our contract win to provide the U.S. Customs Service with our Flight Management System for their P-3 surveillance aircraft fleet, places us in a good competitive position to secure an important share of the world market."

Close added: "As a result of this CP-140 award, about 60 person years of employment will be maintained and roughly 92 person years of employment will be created in Canada over the next two years, between BAE SYSTEMS CANADA and our suppliers."

BAE SYSTEMS CANADA has earned an international reputation for the design, development and production of innovative and highly reliable military and commercial electronic systems for use on land, at sea and in the air. Systems integration, advanced avionics, navigation and communications systems and human factors engineering services, are the basis for the company's long-standing relationship with Canada's Armed Forces.