Growing demand for IT solutions that deliver economic benefits
In fiscal year 2008, Lufthansa Systems further consolidated its position as one of the leading providers of IT services for the airline and aviation industry. Despite slightly lower annual revenues of EUR 657 million (-3.2%) compared to the previous year, the company increased its 2008 operating result to EUR 40 million. While sales to Lufthansa Group companies declined by about 5.0 percent, business with customers outside the Lufthansa Group remained virtually constant at EUR 279 million, accounting for 42.6 percent of total revenues.
"In a generally difficult business environment, we achieved a more than respectable result. The continued globalization of our production enabled us to improve our profitability and competitiveness," said Wolfgang F. W. Gohde, CEO & Chairman of the Executive Board of Lufthansa Systems AG. In his view, the company is well positioned to face the challenges of the current economic crisis, not least because of the strength of its product portfolio. "Today, all airlines are looking for ways to quickly and sustainably improve their efficiency. We can supply the IT solutions that will enable them to achieve this objective without the need to commit to major investments."
Around 340 companies from all around the globe, including about 200 airlines, use IT solutions and infrastructure services from Lufthansa Systems. In 2008, the IT service provider again succeeded in adding more renowned airlines to its customer base. Airlines such as Air France-KLM and the SAS Group opted for the Sirax AirFinance Platform in 2008. As the first integrated platform for airline finance departments, the IT suite optimizes all financial processes and provides key business information virtually in real time. Lufthansa Systems' customers have achieved substantial cost savings from deploying the Sirax AirFinance Platform in their finance departments, cutting operating costs in this area by 45 percent.
"We focus on products specifically designed to either quickly reduce an airline's costs or directly increase its revenues," said Gohde. "Integrated platforms are a cornerstone of our product strategy. In addition to delivering directly measurable economic benefits, they enhance both the speed and quality of decision making. In a dynamic environment such as the airline industry, these are key success factors." By using the flight planning solution Lido OC, airlines can reduce their fuel consumption by up to five percent. Last year, customers such as easyJet and Tunisair selected Lido OC, while other renowned airlines renewed their existing contracts. As a result, around 40 percent of all flights by European airlines are now planned with Lido OC.
2008 also marked the start of the development of our next generation Electronic Flight Bag (EFB). The "EFB Next Gen" will offer Lufthansa pilots greatly enhanced functionality and sets new standards of user friendliness and efficiency. Lufthansa Systems is also rolling out third-generation IT workplace models at Lufthansa Passage and Lufthansa Cargo. The global rollout involves equipping a total of 15,000 workstations at 500 sites with new hardware and software components.
There was also continued demand for airline management solutions in 2008. Over the next years, the Brazilian airline GOL will achieve increased efficiency by deploying our NetLine solution to optimize all of its operational control processes, its schedule management and crew management. Thanks to Lufthansa Systems' innovative IT GroundSolutions/Mobile solution, Austrian Airlines passengers are now able to enjoy faster and more convenient check-in at airports.
Lufthansa Systems' experience in optimizing complex processes is in great demand outside the airline industry, too. Schenker Deutschland AG will soon be controlling its regular bulk transportation with a new IT system which it develops together with Lufthansa Systems. In addition to benefiting from a streamlined IT landscape, the company will also profit from the optimization of all its key operational processes.
Lufthansa Systems expects revenues to decline slightly in 2009, as in the previous year. The company will adapt to this situation by increasing the flexibility of its cost base, reducing overheads and relocating parts of its production abroad to save costs. To strengthen its profitability, the company also plans to adjust its product portfolio to the changed circumstances created by the economic crisis.
"In recent years, we have been able to maintain a solid market position for Lufthansa Systems, developing the right products for the airlines' current needs. Every day, innovative solutions from Lufthansa Systems help our customers become more efficient and more competitive," said Gohde. "We intend to take full advantage of the market opportunities that are now opening up for us. At the same time, we will continue to invest constantly n the development of new technologies and innovative added value products and therefore secure our position as a leader in airline IT."