Latin America Communications Report.

Airlines, airports and every aspect of the air transport industry today benefit directly from the telecommunications and information technology services provided to them by SITA. And indirectly, these benefits pass to every passenger who makes a reservation, boards a flight, and then flies safely and on time to his final destination.

SITA's story bears telling. Fifty years ago, a group of II competing international airlines took the unusual step of founding the Societe Internationale de Telecommunications Aeronautiques as a cooperative organization to help them share communications resources.

"Founded on the principles of cooperation, SITA has continued to work closely with the world's airlines and air transport industry for 50 years, providing innovative solutions to meet their business requirements," says John Watson, director general of SITA, which has its corporate headquarters in Geneva.

Today, SITA is the world's leading provider of global telecommunications and information solutions to the air transport industry, serving more than 650 customers in 220 countries and territories, over the world's largest, most advanced voice and data network.

SITA's customers include airlines, aerospace, airports, air freight, travel distribution and computer reservation systems and governmental organizations. Corporate revenues last year reached more than US$1.2 billion.

In Latin America, more than 40 airlines are SITA customers, and SITA has branched out to provide telecom and information services, maintenance and equipment to airports, air cargo operations and passenger reservations through GABRIEL, the largest multihost passengers reservation system in the world.

"We see ourselves as the IT provider for the air transport industry," says Marcelo Archila, Sales and Marketing Director for Latin America. "We are expanding our partnerships with our customers in Latin America by going into the provision of desktop-to-desktop solutions and outsourcing their domestic networks. Latin America is a place where we see many opportunities. The airline industry in Latin America has changed tremendously, and we are seen as their natural telecom partner."

SITA's services are especially appealing to airports in Latin America, where privatization is prompting moves toward modernization and more efficiency. Both in passenger applications and in flight operations, SITA's services allow airlines to benefit from using a universal system.

For example, when the new international airport at Santiago, Chile, was built four years ago. it was over-capacity as soon as it was inaugurated. SITA, through the provision of CUTE (common use terminal equipment) solved this issue, enabling the optimization of counter, check-in and gate space so that different airlines could use the same areas at different times.

"You are able as an individual airline to sign in and have immediate access to your host," says N. Archila. "It belongs to all of them, but they don't have the investment in the equipment and the technology refreshment they would need to make. The same space is very effectively used to accommodate different airlines."

For airport operators, this means a single supplier has a link to all their major customers. "We are a natural partner to airports and to the integration of airport services," M. Archila says. "We're not just looking at telecom, but at voice/data and all parts of the airports automation."

SITA has a presence in every country in Latin America and much of the Caribbean. The Latin America region has been growing at 20% a year since 1995, with more growth to come in the desktop arena. SITA is implementing CUTE in airports in Brazil, Chile and Uruguay, and is working closely with authorities in Argentina, Colombia, Central America and Mexico.

In the largest IT agreement ever in Latin America, Varig Airlines of Brazil in 1997 signed a US$400 million contract with SITA and IBM to implement a facilities outsourcing contract and a managed voice and data network service. Other airlines outsourcing their networks to SITA are American Airlines, the SABRE Group, Lufthansa and British Airways.

Among services offered by SITA are the following:

* Fully integrated voice and data network services, messaging and electronic commerce.

* Call center solutions and audioconferencing.

* Outsourcing of computer networks, with maintenance and full customer support included.

* Interactive baggage reconciliation and information systems.

Another area of growth for SITA in Latin America is air freight. So far, SITA has been working with the air cargo operations of airlines, but that will expand soon to dedicated air cargo companies and freight forwarders.

With 1999 marking the company's 50th anniversary, the company is proud of its customer relationships. "We're global, but we are local," M. Archila says. "This is an exciting time for us because we are continuing to extend our partnerships with our customers."

SPIRIT OF PARTNERSHIP

SITA is committed to working closely with: its customers, holding conferences and meetings around the world to share information and build ever-improving relationships.

SITA's first workshop for its partners in Latin America will be held May 16-18 at the Turnberry Isle Resort & Club in Miami.

"This is an IT conference for CIOs of airlines, airports and some government organizations where we can talk about what is happening in the industry, about telecom and voice solutions, and share experiences among ourselves," says Marcelo Archila, Sales and. Marketing Director for SITA's Latin American. operations.

For more information, call the Public Relations Dept in Rio, on (5521) 514-6600.

SITA HIGHLIGHTS & FACTS

* SITA supports an industry that by the year 2006 will service over 2 billion air travelers per year. Without SITA, these travelers would not be able to complete their journey.

* SITA and Equant jointly own and operate the network with the largest geographical coverage in the world, linking over 2,100 cities in 220 countries. No other telecommunications company, or alliance, has close to this reach.

* SITA's Information Services manage all areas of airline commercial and operational requirements. Its Airport Services provide airlines, airport authorities and handling agents with computing solutions for sharing resources at passenger terminal facilities. Air-Ground Services provide the largest VHF AIRCOM network in the world, covering over 150 countries.

* SITA's network never sleeps - customers are supported 24 hours per day on a global basis. SITA has local language support staff available worldwide. The network has over 140,000 user connections. Internet and Intranet Solutions maximize the benefit of the public Internet and private intranets for multinational corporations.

* Further information can be found at www.sita.int