Saudi Arabian Airlines Selects SAP for Business Transformation

Largest Airline in Middle East Builds Its Business Process Platform on SAP® ERP

JEDDAH, Saudi Arabia. - SAP Middle East North Africa (MENA) LLC, a subsidiary of SAP AG (NYSE: SAP), today announced that Saudi Arabian Airlines has selected SAP solutions as the business process platform to help accelerate its transformation as a privately run company. At a signing ceremony today in Jeddah, Saudi Arabia, SAP Arabia as the prime contractor and SAP MENA celebrated an agreement that slates SAP’s flagship enterprise resource planning (ERP) application, SAP® ERP, and industry-specific best practices to fuel efficient processes and evolve business models across the airline’s newly diverged business arms. With a first rollout phase targeting more efficient financial management, followed by human resources and maintenance processes, the implementation builds on the SAP NetWeaver® technology platform to integrate front-end and back-office systems for operations, revenue accounting, reservations and ticketing, fuel management and technical documentation.

Saudi Arabian Airlines needed a unified business and IT infrastructure to drive the transformation of its operations into nine independent subsidiaries: catering, cargo, ground handling, technical service, flight academy, medical services – and premium, religious, and royal and VIP airlines. Having extensively vetted various competitive offerings, the airline chose SAP for its industry expertise and the flexible design and open integration of SAP software.

“As each of our strategic units has its own unique business model and competitive demands, we needed a business and IT infrastructure that empowers them to optimize and expand core activities flexibly and profitably,” said engineer Khalid Almolhem, director general, Saudi Arabian Airlines. “SAP presented proven industry expertise and a compelling vision for the future. With SAP, we gain the business process platform that will bring new efficiencies to each unit and unprecedented flexibility to evolve as business demands change.”

The SAP implementation at Saudi Arabian Airlines is part of an overall strategic plan aimed at facilitating the airline’s privatization strategies and reacting to changing market conditions. The group is in the process of overhauling its central IT systems, as results of an IT diagnostics and strategic business plan project conducted in 2006 showed two main areas for improvement:

* Acquire and implement state-of-the-art airline industry-specific applications to ensure competitiveness and sustainability in the future, covering all strategic business units and the holding company, with a focus on the core passenger airline.
* Build a modern, end user-focused IT infrastructure and IT production to enable new applications and processes.

As part of the airline’s strategic IT plan, the SAP initiative will coincide with other major undertakings currently pursued by the group to renew its application landscape for marketing, operations and network planning and scheduling processes. Built on the business-driven blueprint of enterprise service-oriented architecture (enterprise SOA), SAP ERP will enable the group’s business divisions to revamp vital core business processes, integrating back-office with front-office functions to improve the airline’s overall services and provide timely and cost-effective services to its passengers.

The phased rollout of SAP ERP begins in January 2008 to deliver financial processes across the group by June 2008, adding human resources and payroll processes by January 2009 and SAP software to manage maintenance, repair and overhaul (MRO) processes for its jet fleet, the largest in the Middle East, by May 2009. Saudi Arabian Airlines will also leverage SAP® Best Practices.

The agreement comes as SAP moves to significantly expand its presence in the region with the recent acquisition of the software license and maintenance business from SAP’s former exclusive and long-term partner in the region, SAP Arabia. (See September 11, 2007 press release titled, “SAP Acquires Software License and Maintenance Business from Exclusive Partner SAP Arabia to Strengthen Operations in the Middle East and North Africa.”) SAP Arabia, which will announce its new company name formally in the first quarter of 2008, is the prime contractor in the IT project with Saudi Arabian Airlines and leads the consortium of SAP partners, which includes Atos Origin Middle East Ltd. (part of the HP group of companies), FuelQuest, InfoTrust, Lufthansa Systems, Sun Microsystems, STME and Utopia.

“This agreement is the result of a successful partnership with Saudi Arabian Airlines in bringing the best products and services to one of the leading companies in the Middle East,” said Essam Enany, president, SAP Arabia. “It highlights our company’s efforts to extend its offerings by expanding its products and services to further develop the SAP market in the Middle East.”

“Saudi Arabian Airlines is one of the leading companies in the Middle East that is choosing SAP to transform its business network and evolve its business model,” said Sergio Maccotta, managing director, SAP Middle East and North Africa. “This agreement underlines our success and potential in helping companies in the region continually evolve and better compete locally and on the global market, demonstrating the business value of our global reach and deep understanding of industry and local market demands.”

About SAP
SAP is the world’s leading provider of business software*. Today, more than 43,400 customers in more than 120 countries run SAP® applications—from distinct solutions addressing the needs of small businesses and midsize companies to suite offerings for global organizations. Powered by the SAP NetWeaver® technology platform to drive innovation and enable business change, SAP software helps enterprises of all sizes around the world improve customer relationships, enhance partner collaboration and create efficiencies across their supply chains and business operations. SAP solution portfolios support the unique business processes of more than 25 industries, including high tech, retail, financial services, healthcare and the public sector. With subsidiaries in more than 50 countries, the company is listed on several exchanges, including the Frankfurt stock exchange and NYSE under the symbol “SAP.”
(*) SAP defines business software as comprising enterprise resource planning and related applications such as supply chain management, customer relationship management, product life-cycle management and supplier relationship management.

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