Innovations Spur Lufthansa Systems to Success

Above-average growth in revenue with customers outside the Lufthansa Group (Kelsterbach, March 12, 2007) -- Lufthansa Systems continued to grow in 2006 by acquiring numerous new customers and expanding its services for existing customers. Revenue rose by 2.7 percent to reach a new high of EUR 652 million. The proportion of revenue from the 180 customers outside the Lufthansa Group also reached a record level of 41.6 percent. "These figures show that we're on the right track with our strategy," said Wolfgang F. W. Gohde, CEO of Lufthansa Systems AG. "We have expanded our position as the leading IT provider for the aviation industry." The operating result was EUR 49 million, 22.2 percent lower than the previous year. This was due to ongoing price pressure, considerable preliminary costs for new outsourcing contracts, the strengthening of global service and of sales in Asia and America, and the development of new products. With the development of its new FACE Passenger Management System, Lufthansa Systems took the innovative lead in the market for next-generation platforms. 2008 will see the first productive use of FACE by an airline. The Dynamic Pricing Engine was another innovative product introduced in 2006 which has secured Lufthansa Systems' unique position in the market. This system bridges the gap between the traditional fare concepts of network airlines and those of low-cost carriers. It enables network airlines to structure their prices flexibly so that they can perform competitively in both market segments. Lufthansa Systems is also an innovative leader when it comes to electronic navigation charts and mobile infotainment systems on cruise ships. Innovative technology will give cruise passengers an unsurpassed range of onboard information, communication and entertainment options. AIDA Cruises, the largest provider in the German cruise market, contracted Lufthansa Systems in 2006 to install the system on its four new ships. One focus of product development is the combination of individual solutions to create integrated platforms. These allow airlines to optimize all of their business processes and reduce IT complexity through standardization. With the IOCC (Integrated Operations Control Center), for example, airlines can optimize their flight operations processes and react more flexibly to irregularities. Thanks to its innovative product range, Lufthansa Systems was able to gain numerous new airline customers and customers from other segments in 2006. The strategic IT partnership with LSG Sky Chefs was just one outstanding sales success during the year. The company has entrusted Lufthansa Systems with the operation of its IT and telecommunications infrastructure in Europe and North America for the next ten years. Hamburg Sud, one of the world's leading ship-owning companies, is another new customer for Lufthansa Systems. Lufthansa Systems will advise Hamburg Sud on the introduction of a new IT platform and the optimization of its worldwide business processes. Other customers, like Suddeutscher Verlag, expanded their successful cooperation with Lufthansa Systems. Lufthansa Systems is now responsible for managing the media company's Wide Area Network and thus ensuring that all sites and users in Germany are securely and reliably connected to the central office in Munich. "We expect the demand for high-quality IT services to remain high in the airline industry. Airlines can improve their competitive position in the long term by investing in the replacement of outdated IT systems. Since we are the only provider to cover an airline's entire value chain, we have a strong position here," Gohde said. "Our extensive experience in the operation of aviation systems - which demand extremely high levels of security and availability - makes us an attractive partner to many companies in other sectors as well." Additionally, Lufthansa Systems is an expert in efficiently organizing and optimizing complex business processes with the help of customized IT solutions. In order to continually improve its own cost structure, Lufthansa Systems intends to expand its foreign production. "This will bring us closer to our customers while improving our cost structure," said Gohde. At the same time, Lufthansa Systems will continue to invest in the development of innovative products and platforms in order to consolidate its leading technological position.

Source: Lufthansa Systems
Date: Mar 12, 2007