Horst Rahe, Founder of Aida Cruises, Joins Board of P&O Princess

May 16, 2001 P&O Princess Cruises plc, one of the three largest cruise companies in the world, today announced the appointment of Horst Rahe as a non-executive director.

Horst Rahe is founder of P&O Princess's German cruise business, AIDA Cruises, which he established in 1996. AIDA is unique in that it is a cruise club product catering exclusively for German speaking customers and competing primarily with traditional German land-based club vacations. AIDA currently has one ship, AIDAcara, which operates in the Mediterranean in the summer and in the Caribbean in the winter. Within just four years, Horst Rahe and the local management team have succeeded in building the AIDA brand into one of the best-known cruise brands in Germany. AIDA operates as a part of Seetours, which is itself an established cruise brand in Germany. In his continuing role as non-executive chairman of Seetours, Horst Rahe will be overseeing the launch of Seetours' new premium, destination oriented cruise brand for the German market later this summer.

P&O Princess is investing over DM 1.5 billion to build its German businesses over the next three years. Two sister ships will join the AIDAcara in 2002 and 2003. Crown Princess will transferred from North America in 2002 and converted for the German market, offering the new premium, destination oriented product and we expect Regal Princess to follow her. Two river cruise vessels have been ordered for delivery in Spring 2002.

P&O Princess formed a partnership with Mr Rahe in 1999 when it acquired 51% of AIDA Cruises. P&O Princess subsequently acquired the Seetours business, which had also been owned by Mr Rahe. When P&O Princess became a separately listed company in October 2000, Mr Rahe exchanged his remaining 49% interest in AIDA Cruises for shares in P&O Princess Cruises plc, together with an earn out payment payable between 2003 and 2006 dependent mainly on the future financial results of Seetours, including AIDA Cruises. With P&O Princess now owning 100% of both operations, AIDA Cruises has been fully integrated with the Seetours business.

Horst Rahe will be joining Lord Sterling (Chairman), Peter Ratcliffe (Chief Executive Officer), Nick Luff (Chief Financial Officer), Baroness Hogg, Peter Foy and Sir John Parker on the P&O Princess Cruises Board.

Lord Sterling, Chairman of P&O Princess, said:

"I am delighted to welcome Horst Rahe to the P&O Princess Cruises board. Mr Rahe has been instrumental in developing the German cruise industry with the innovative AIDA product. We believe that Germany has great potential for future growth in cruising and with the management team put in place by Mr Rahe we are building up the AIDA brand and launching a new premium brand to capture this growth.

Mr Rahe's knowledge of continental European travel markets and his entrepreneurial and marketing flair will be of immense benefit to P&O Princess as we grow our business around the world."

Additional information

P&O Princess P&O Princess Cruises plc is one of the three largest international cruise companies with some of the strongest cruising brand names: Princess Cruises in North America; P&O Cruises in the UK and in Australia; AIDA and Seetours in Germany and Swan Hellenic also in the UK. It is a leading provider of cruises to Alaska, the Caribbean, Europe, the Panama Canal and other Exotic destinations. The group currently has a fleet of 18 ships offering a total of 27,370 berths, including 2,600 berths on its latest ship, Golden Princess, which arrived in Southampton last week. The group has 8 more new ships on order, offering a further 17,020 berths.

P&O Princess has approximately 19,000 employees worldwide and in 2000 generated revenue of over $2 billion (£1.4 billion). Headquartered in London, P&O Princess' ordinary shares are quoted on the London Stock Exchange and as ADSs on the New York Stock Exchange (under the symbol "POC").

Horst Rahe Mr Rahe has been closely associated with the development of tourism in German speaking countries. He and a partner were instrumental in the successful privatisation of Deutsche Seereederei, following unification with Eastern Germany. The privatisation was completed in 1998 and it became one of the best-known tourist enterprises under the brand name Arkona Touristik with a special focus on cruise ships. After only four years of operation, AIDA became the leading cruise brand in Germany.

Mr Rahe, who is 61, graduated in Business Management at the Albert Magnus University in Cologne. His business career has covered shipping, tourism and real estate in Hamburg and Rostock. He is Honorary Consul of the Republic of , Vice President of the Rostock Chamber of Industry and Commerce, deputy chairman of the advisory council of Rostock Sea Port Administration Company, Honorary Senator of the Rostock College of Music and Theatre, a board member of the German-Finish Chamber of Commerce and he is also active in several other honorary offices.

Following the sale of AIDA Cruises to P&O Princess, Mr Rahe owns 11,366,415 shares of P&O Princess Cruises plc, representing approximately 1.6% of the company's share capital. Because of his continuing direct interest in the Seetours business, through the earn out arrangements, Mr Rahe will not be regarded as an independent non-executive director for the purposes of the Combined Code.

Contact P&O Princess Cruises plc

Gwyn Hughes, +44 20 7805 1218 Executive Vice President, 07801 039722 Corporate Development and Communications

Caroline Keppel-Palmer, +44 20 7805 1214 Investor Relations and Corporate Communications 07730 732015 Manager

Gavin Anderson & Company +44 20 7496 1446 Byron Ousey