Press Release

Gate Gourmet Reaches Agreement with British Airways

Talks Continue for Labor Resolution

London, August 23, 2005 - Gate Gourmet London (Heathrow) confirmed today that it has reached an agreement with British Airways to modify its catering contract, which when combined with a program of redundancies and improved work practices by labor, will stem losses at the company.

As a result, the company has deferred the decision on entering into Administration pending further progress with its labor negotiations.

Gate Gourmet said it deeply appreciated British Airways' accommodation in revising its agreement. David Siegel, Chairman of Gate Gourmet said: "We thank BA for adjusting the contract and recognizing the need to provide us some relief given the new realities of the industry. We remain committed to providing BA with top level service to enhance the traveling experience for the airline's passengers."

In terms of labor, upon which BA indicated publicly the contract is contingent, the company continues in discussions with the Transport and General Workers Union (TGWU) facilitated by the Trades Union Congress (TUC). Progress has been made to resolve the dispute which resulted from the dismissal of over 600 Gate Gourmet employees who participated in an unballoted, illegal industrial action.

While both sides continue to review specific compromise proposals, Gate Gourmet said enough progress had been made to lift the imminent need for Administration. The company expressed its thanks to Brendan Barber, General Secretary, TUC, whose involvement has been critical in advancing towards a favorable resolution. The company looks forward to continuing talks over the next few days.

Siegel said: "Any solution would protect the interests of the 1,400 loyal, hardworking and dedicated employees who are providing excellent service to British Airways and other Heathrow customers. We also want to resolve the dispute over the dismissed workers; however, that will not include the reinstatement of those who instigated and incited the walkout action and who harassed and intimidated those employees who chose to come to work during this difficult time."

Founded in 1992, Gate Gourmet is the world's largest independent airline catering, hospitality and logistics company with dual headquarters in Zurich, Switzerland, and Reston, VA, USA. The company has substantially expanded its products and services recently through acquisitions and strategic investments. The portfolio now includes cabin service ware (deSter); comfort/entertainment items (Harmony); packaged food components assembled in central production units (Supplair); design and delivery of brand-linked customer environments (Performa); service staff recruitment and training and crew leasing (Elan); aviation services such as cabin cleaning, aircraft washing and deicing and passenger services (Fernley/IAS); catering security (Gate Safe); business applications (eGate Solutions); and supply chain optimization (partnership with Pourshins).