• Restructuring pays off – Considerable increase in revenues and profit thanks to stronger competitive position – Outsourcing of infrastructure business planned

Kelsterbach, Germany | March 17, 2014– Lufthansa Systems today announced that it was able to increase its revenues again in the past financial year to EUR 640 million (+5.1%). Revenues with companies in the Lufthansa Group amounted to EUR 375 million (+6.2%), while revenues with external customers rose by 3.5% to EUR 265 million. The operating result came in at EUR 36 million (+80%). This positive development was driven by the continued optimization of the production and sales units as well as the strong development of revenues and earnings for the BoardConnect wireless in-flight entertainment solution and income from the termination of an IT outsourcing contract. Lufthansa Systems was also able to expand its customer base and conclude numerous agreements in 2013. A total of over 300 airlines and around 150 companies in other industries trust in the expertise and products of Lufthansa Systems.

“We are back on track for profitable growth, as promised. Thanks to our innovative products, proximity to customers and flexibility, we have further strengthened our market position in both the airline sector and Industry Solutions,” said Stefan Hansen, CEO of Lufthansa Systems AG, summarizing the financial year. “This result is a firm foundation for actively shaping our future. The year 2014 will be dedicated to the further development of our structures in accordance with market needs.” The current figures also show that Lufthansa Systems is an increasingly important partner to the various companies in the Lufthansa Group. “Thanks to our unique process know-how, high level of IT expertise and wide range of outstanding products, we make a significant contribution to their competitiveness.”

For example, Lufthansa Passage will be equipping a total of 20 Airbus A321 aircraft with the award-winning, wireless in-flight entertainment solution BoardConnect, making it the first mainline carrier in Europe whose passengers can access a rich choice of entertainment and information on intra-European flights using their own smartphone, tablet PC or laptop on selected routes. Furthermore, SWISS opted for the latest revenue integrity solution from Lufthansa Systems in 2013. Austrian Airlines, Lufthansa Cityline und Germanwings rely on solutions for schedule and slot management, crew planning and operations control. Lufthansa Passage and SWISS renewed their agreements for navigation solutions for another five years. And the technology migration to the new global wide area network (WAN) at 600 sites of Lufthansa Passage and Lufthansa Cargo was completed successfully.

Boost from improved business situation for airlines

Against the backdrop of an improved earnings situation for airlines, the market for airline IT showed strong growth in 2013 after two years of declining revenues. Lufthansa Systems was therefore able to achieve important sales successes in Europe and especially in Asia.

More than 20 customers, including SAS, Iberia, Czech Airlines and TUIfly, opted for navigation solutions from Lufthansa Systems. China Southern, Asia’s largest airline, was one of the new customers for the leading Lido/Flight flight planning solution. The Chinese carrier also renewed the agreements for the network planning and medium- and short-term schedule management solutions for another five years. The Japanese airline ANA signed a contract for the use of SchedConnect and its central schedule database for codeshare management and schedule distribution. The airline will also continue to use SkyConnect to cost-efficiently link its global sites.

Both Lufthansa Passage and the Israeli airline EL AL were acquired as customers for BoardConnect. EL AL will install the system in ten Boeing 737 and two B767 aircraft. The largest customer for this product is Virgin Australia, which has now installed the solution in over 80 Boeing 737 and Embraer E190 aircraft. Interest in this trendsetting innovation remains high among other airlines.

Entrenched factor in the German IT market

Lufthansa Systems also successfully fitted cruise ships with modern IT and communications solutions. Mitsubishi Heavy Industries awarded Lufthansa Systems the contract for supplying the IT infrastructure for the first two ships of the new AIDA generation. Lufthansa Systems has already installed its solutions on seven other AIDA ships, and it will additionally be responsible for operating the LAN, Wi-Fi and telephone systems on the two new vessels. TUI Cruises also chose Lufthansa Systems as its partner for equipping two new ships with innovative LAN and WLAN solutions.

Two well-known customers, Greyhound and ADAC Postbus, were acquired for the versatile Velimo infotainment solution. Both companies will use the solution to offer passengers on their intercity buses a wide range of wireless entertainment and information as well as Internet access.

“In Industry Solutions, we have carved out a distinctive profile for ourselves with our growing portfolio of standalone products and expanded IT services,” Hansen said. “Our technological expertise and ability to successfully market innovations with high customer value distinguish us in this field of business.” Products like the EasyMain service package and the Velimo guest portal also contributed to making the Industry Solutions division, with its professional services and applications for selected sectors, a permanent fixture in the German IT market.

The sales achievements in this division in 2013 included agreements with Sysmex Deutschland, Secura Services and Jebsen & Jessen, all of whom chose Lufthansa Systems as a partner for consultation as well as the implementation and operation of SAP solutions. The Hamburg Süd shipping company, the Hamburg Port Authority and SBB Swiss national railways all renewed their existing consultancy agreements. In addition, business relations were strengthened with the energy suppliers EON and Vattenfall.

In view of strong competition and the permanent need for large investments in the field of infrastructure services, Lufthansa Systems will contribute its data centers into a partnership with a large international provider. “As a consequence of technological progress, the costs in this area are determined largely by economies of scale,” Hansen explained. “This gives large global players a growing competitive advantage which we cannot compensate for in the long term on our own.” By outsourcing these services, we want to create the prerequisites for being able to provide infrastructure services to the Lufthansa Group and other customers under competitive terms. At the same time, this step is intended to permanently safeguard jobs and employee know-how. Another objective of this realignment is to create a framework in which all divisions can fully utilize their potential for future development in their respective markets.

– BoardConnect provides wireless access to a wide range of entertainment and information – cost savings and new revenue opportunities for airlines

Kelsterbach | September 3, 2012– On board a flight from Frankfurt to the Greek island of Rhodes and back, Condor and Lufthansa Systems have unveiled the future of in-flight entertainment for the general public. BoardConnect, the wireless in-flight entertainment system with Condor as its launch customer gives passengers traveling with their own laptops, tablet PCs and smartphones direct access to an extensive range of movies, music and information on board an aircraft. From mid-September, Condor passengers will be able to enjoy this revolutionary technology in a test run. Passengers can check the routes on which BoardConnect is available on board the Boeing 767-300 with the registration D-ABUZ on the Condor website condor.com under “Stars am Himmel.”

“In-flight entertainment is an important part of the travel experience and a way to stand out from the competition, particularly in the leisure segment,” said Rainer Kröpke, Head of Product Management and Marketing for Condor Flugdienst GmbH. “An innovative solution like this just fits with the Condor brand and our goal of offering passengers the most pleasant way to fly.”

“BoardConnect marks a new era in in-flight entertainment, with a broad offering for passengers, greater flexibility and lower costs,” said Norbert Müller, Head of BoardConnect Program Management at Lufthansa Systems AG. “Thanks to the innovative technology, airlines that install BoardConnect will set the standard in in-flight entertainment and will be able to unlock new revenue potential at the same time.”

BoardConnect is a WiFi network that comprises a server on board the aircraft plus several wireless access points in the cabin. This innovative solution is extremely cost-efficient and reliable, and it enables airlines to offer a wide range of information and entertainment that can be updated quickly and easily. BoardConnect also opens up the opportunity for new personalized on-board services and new ways of generating revenue through in-flight sales, for example.

Since no wiring is required to transmit data in the cabin, airlines can install Board Connect during routine maintenance or night stops without the need for additional ground time. The solution is also extremely reliable and incurs much lower operating costs than previous systems. The weight savings generated by the elimination of wiring and data transmission hardware reduce fuel consumption in a Boeing 767-300ER by over 80 metric tons per year.