The company, which claims to be the leading international air cargo carrier, is spending about £32m on 40 projects to make its main IT systems and business processes more efficient. The projects are due to be completed by the end of 2006.
IT projects include installing a new handling system for freight cargo and implementing software from business integration specialist Tibco to link more than 50 applications internally and enable communications over the internet with suppliers.
"Two years ago we reviewed business processes [at Lufthansa Cargo]," said Stephan Madlung, head of information systems at Lufthansa Systems, the airline's IT provider. "We realised that its IT systems were at their limit."
He added that the Tibco software would enable the airline to offer new services to customers, such as informing them when a shipment is delayed.
"This requires shipping information from a central shipment database, routing information from the order management system and some customer information from a Siebel CRM system," said Madlung.
Mark Raskino, research vice-president in emerging technologies at analyst firm Gartner, said many airlines had to maintain aging but important legacy systems that were eating up a large proportion of their IT budgets.
He said software such as Tibco's could act as an "enterprise nervous system", allowing IT systems to exchange information in one format. "It avoids the spaghetti of links between different applications," said Raskino. "This reduces the basic costs of maintaining applications."