PROS O&D Network Optimizer, PROS Low Fare Solution, and PROS Group System Next-Generation Enhancements selected by Lufthansa German Airlines

Houston, Texas – November 03, 2004 —PROS Revenue Management, a world leader in pricing and revenue optimization science and software, and the pioneer and dominant provider of revenue optimization solutions to the travel and transportation industry, optimizing millions of pricing decisions every day for more than 100 customers in 39 countries, today announced that Lufthansa German Airlines, has licensed the PROS O&D Network Optimizer, the PROS Low Fare Solution, and significant PROS Group System next-generation enhancements.

“We are honored to continue our 15 year relationship with Lufthansa German Airlines in providing cutting edge Revenue Management Solutions,” says Bert Winemiller, Chairman and CEO of PROS Revenue Management. “With these latest advanced solutions that PROS is providing, the award winning Lufthansa will maintain its position among the world’s leading airlines, generate incremental revenue and increase passenger satisfaction.”

“For Lufthansa it is mission critical, to produce premium products for business travelers (i.e. ‘the airline network for earth’) and highly competitive point to point transportation within one aircraft, controlled by one Revenue Management solution“, Dr. Marcus Frenz, Vice President of Lufthansa, explains. “Therefore the ability to manage the Revenue, O&D optimized and low fare optimized at the same time is essential.” He continues: “By integrating the PROS O&D Network Optimizer and the PROS Low Fare Solution into the Revenue Management IT, Lufthansa will have the best available solution for managing the challenges of today’s competitive environment.”

The PROS O&D Network Optimizer is a comprehensive optimization system that incorporates leading-edge dynamic programming science for airlines. It incorporates a mix of network and leg optimization techniques which address the spectrum of airline challenges including overbooking, upgrade potential, convertible seats, and flexible cabin handling and produce a set of network optimal controls. The outputs from the Network Optimizer module are sophisticated bid-prices for O&D control as well as leg or segment allocations to support legacy availability and booking processes. This solution provides the customers a proven revenue increment of at least 2% over leg-based controls.

The PROS proprietary optimization engine uses Linear Programming and Dynamic Programming methods to generate controls that optimize the network revenue and can impose business constraints on the output. The matrix of bid prices for each flight leg compartment as well as authorization levels by leg/segment class is fed into the Reservation system or the Real Time Dynamic Pricing Engine to offer real-time availability or make booking accept/reject decisions.

The PROS Low Fare Solution works with distinct demand forecast types based on customer’s willingness to pay and the products being offered in the marketplace. The distinct demand types are categorized as “Priceable” and “Yieldable” bookings. Once the demand forecasts for the two demand types are determined and passed to the optimizer, the PROS O&D Network Optimizer uses advanced Dynamic Programming methodologies to optimize the network. The new resultant mix of demand types with improved optimization provide optimal inventory controls that maximize revenue.

Working integrally with the PROS Network Optimizer and the PROS Low Fare solution, the PROS Group System has been upgraded with significant next-generation enhancements which provide new revenue-generating features in addition to user productivity improvements.

About the Lufthansa Aviation Group
The Lufthansa Aviation Group is one of the world’s leading air transport corporations. It comprises more than 400 independent group and affiliated companies, active in business segments including passenger airlines, logistics, aircraft maintenance, catering, tourism and IT services. Lufthansa’s headquarter is in Cologne/Germany. Its operational center for passenger and cargo services is located in Frankfurt. The other key locations in Germany are Munich, Berlin and Hamburg. Measured by traffic performance, Lufthansa ranks third worldwide in passenger transport. To offer its customers a dense network of seamless connections, Lufthansa has built up a number of worldwide partnerships. Launched in 1997, the Star Alliance is the most important of these link-ups.

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PROS Corporate Communications

email: info@prospricing

phone: 713.335.5151 / fax: 713.335.8144