July 15, 2004

Together with LICON (Logistic Ident Consortium), founded by the logistics service provider Kühne + Nagel (K+N), Lufthansa Systems will establish quality standards for "identification solutions" in the logistics industry and will strengthen its position as an RFID solution integrator.

Lufthansa Systems, an experienced partner for companies in the transportation and logistics industries, will contribute its industry and IT expertise in the area of RFID (Radio Frequency Identification) to the consortium. RFID is a radio procedure for identifying and tracking cargo, which allows data to be transmitted via an object chip (RFID tag) to a computer system, where it can be processed. The RFID tag consists of an antenna, an analog circuit for sending and receiving data (transponder), and a digital circuit for storing information.

As an RFID solution integrator, Lufthansa Systems supports its partners and customers in transforming their plans and visions into reality, independent of the technical possibilities and challenges of RFID technology. Lufthansa Systems offers support through all phases of a project - from analysis to the selection of the ideal RFID hardware and its implementation. Lufthansa Systems is bringing its experience from a number of complex logistics projects to the consortium. By bundling its logistics and IT expertise, Lufthansa Systems has contributed significantly to enabling not only Lufthansa Cargo, but also a variety of other companies along the transport chain, to establish outstanding positions in their markets.

In the context of LICON, a logistics supply chain pilot project will be initiated on a route from Munich to the USA in August. This project will involve a manufacturer from the high-tech industry, Kühne + Nagel and - based on current plans - an air cargo company. As a strategic IT partner, Lufthansa Systems will take on the role of system operator for the USA within the project.

The manufacturer from the high-tech industry will fix RFID tags to shipping containers. These tags will be read when the containers enter and leave the K+N warehouse to be transported to the air cargo company, which will fly them to New York. Once there, an American K+N partner will accept the shipment, identify the RFID tag and deliver the shipment to the end customer. The RFID tags will then be read again by the K+N partner. The data will subsequently be made available to the project participants on the Internet. Since RFID tags in the 865 to 868 megahertz range are used in Europe, while tags in the USA have a frequency of 915 megahertz, the results of the pilot project should provide new insight into the use of RFID tags in different UHF frequency ranges.

In addition to Kühne + Nagel and Lufthansa Systems, other companies and institutions involved in LICON include Aventeon, Siemens Business Services, Denso, Detectis, Hatronik, Sato, Schreiner Logi-Data, Papergate, Progress Software, SUTainer, UCS, Océ, and the Fraunhofer Institutes for Factory Operation and Automation and for Material Flow and Logistics. As well as focusing on RFID technology, LICON also emphasizes the integration of all participants in the logistics supply chain and is especially open to all other logistics service providers.

Further information on LICON is available at www.licon-logistics.com.

Note to editors:

Lufthansa Systems is one of the leading IT service providers for the airline and aviation industries worldwide. As systems integrator, the wholly-owned subsidiary of the Lufthansa Group covers the entire range of IT services, including consulting, development, implementation and operation. Lufthansa Systems provides its IT infrastructure and operations services to a variety of industries. Headquartered in Kelsterbach near Frankfurt/Main, Germany, the company has branches in Germany and 13 countries and employs about 4,400 people worldwide. In business year 2003, Lufthansa Systems recorded sales of EUR 610.7 million.