THIRTEEN AIRLINES, INCLUDING KLM ROYAL DUTCH AIRLINES, FORM INDUSTRY’S LARGEST BUSINESS TO BUSINESS EXCHANGE, TO HANDLE MORE THAN USD $45 BILLION IN ANNUAL PURCHASES

Thirteen of the world’s major airlines today announced the creation of the airline industry’s largest business-to-business e-commerce exchange. The exchange, to be officially launched in the next few months as Aeroxchange, will offer the most comprehensive selection of aircraft technical parts and services as well as general business supplies to airlines on the web. The group of airlines has selected and is in negotiation of a definitive agreement with Oracle Corp. of Redwood Shores, California, to become the exchange’s technology provider.

First announced in April 2000, the multi-airline venture has grown rapidly to count ten of the world’s largest airlines as founding members, each with one representative on Aeroxchange’s Board of Directors. The ten are: Air Canada, All Nippon Airways (ANA), America West Airlines, Cathay Pacific Airways, FedEx Express, Japan Airlines, Lufthansa German Airlines, Northwest Airlines, Scandinavian Airlines System (SAS) and Singapore Airlines. Other confirmed participating airlines with equity participation include Air New Zealand, Austrian Airlines and KLM Royal Dutch Airlines.

With founding member airlines in Asia-Pacific, North America and Europe representing passenger and cargo operations, the new exchange is global in scope. It is estimated the exchange will handle more than USD $45 billion annually of the current 13 airlines’ purchases of goods and services, excluding aircraft and fuel.

“E-procurement will be instrumental in achieving substantial savings through purchasing power and lower transaction processing costs,” said Rob Abrahamsen, Chief Financial Officer of KLM Royal Dutch Airlines. “We expect to save at least 15 million EUR annually as a result of electronic procurement”.

Initial development will focus on Internet procurement capabilities resulting in streamlined and enhanced processes for greater efficiency, providing both airlines and suppliers with the benefits associated with lower transaction, processing and inventory costs. Lowering the total cost of ownership throughout the supply chain will create significant value for all participants. Later development stages will include supply chain management features such as improved inventory control and production planning.

Examples of items that will be traded through Aeroxchange include airframe, avionics and engine components and maintenance services as well as a wide range of airline specific goods and services. In addition to the founding members, all airlines, other industry related companies and their suppliers will be invited to use the services of the exchange.