March 29, 2004

In business year 2003, Lufthansa Systems managed to generate revenues of 610.7 million euros despite the continuing pressure on costs and the unfavorable investment climate in the airline industry. Compared with the previous year, sales generated with customers outside the Lufthansa Group rose by over 20 percent. The pre-tax result came to 42.9 million euros.

"Lufthansa Systems achieved this positive result primarily thanks to the consistent expansion of our product portfolio," says Dr. Peter Franke, Chief Executive Officer of Lufthansa Systems Group GmbH. "This strategy has enabled us to increase our revenues by approximately 10 percent compared with 2002."

Lufthansa Systems' portfolio is focused on IT solutions for airline core processes. In the context of the further development of the portfolio, the IT provider was able to conclude the modularization of the central reservation and handling system MultiHost in 2003. Furthermore, Lufthansa Systems developed Business Process Outsourcing services and integrated offshore solutions in line with market requirements – an area in which Lufthansa Systems expects to achieve above average growth.

In 2003, major companies once again placed their trust in Lufthansa Systems' expertise. As well as increasing the level of business from our existing customer base, the IT provider was able to win important new customers. New airline industry customers include Asiana Airlines, the leading American low fare carrier JetBlue, and the United Arab Emirate's new national airline, Etihad. In addition, Lufthansa Systems has been responsible for the management of Thomas Cook AG's entire IT infrastructure. Another important new customer from the financial sector is Deka Bank GmbH.

One of the most innovative projects of 2003 was FlyNet. Here, Lufthansa Systems implemented the first flying hotspot on board a commercial airline, thus enabling passengers to use the Internet during their flight. Further innovations include the Electronic Route Manual, which replaces the pilot's traditional airport and navigation maps with electronic maps on a portable computer.

Outlook

To supplement its traditional licensing and consulting business, Lufthansa Systems continues to expand its Application Service Providing (ASP) portfolio. During 2004, the company expects to generate a significant share of revenues from existing customers with whom it already enjoys a stable, long-term relationship. Business outside the Group is expected to follow the same growth trend as in recent years. In addition to its "home" market EMEA (Europe, Middle East, Africa), Lufthansa Systems is currently opening up the American market. There are also increased opportunities in the Asian market, although these are characterized by longer preliminary and decision-making cycles.

Lufthansa Systems focuses not only on the international airline and aviation market. An important element of the current corporate strategy is winning customers from other industries outside the airline and aviation market for technology and infrastructure services. Increasingly, the company's recognized expertise is in high demand by customers outside this industry who have similar requirements in terms of quality, security and reliability.

This trend continues in 2004. Just recently, Lufthansa Systems and the European Bank for Fund Services (ebase) signed an agreement to outsource the bank’s IT infrastructure. "Extending our customer base allows us to minimize risk and makes us more independent from the performance of individual business sectors. With the result from ordinary activities, we have exceeded our own expectations," Dr. Franke added.