News release

HP Servers and LRS' SIRAX Software Help Lufthansa Reduce Costs

Leading European Airline Uses IT Solution to Identify and Respond to Revenue Accounting Issues

GENEVA, March 8, 2001

Hewlett-Packard Company (NYSE:HWP) today announced the successful deployment of its industry-leading V- and N-class servers at the heart of an IT solution to improve revenue accounting at the Lufthansa group of airlines.

Lufthansa, among the world's most profitable airlines, plans to use the system to reduce costs, especially through the identification of revenue loss caused by factors such as the timely identification and rejection of excessive incoming invoices and fraudulent travel.

The German carrier is using the HP servers in association with the SIRAX revenue accounting software recently developed by Lufthansa Revenue Services (LRS), and which is now available to 1,000 of the airline's employees worldwide.

"We see revenue accounting as one of the key IT applications that can deliver a competitive edge to airlines," said Paul Tschopp, manager, HP Aviation and Transportation Business. "It helps companies improve margins and reduce overhead while they cope with the pressure to maintain low airfares and they absorb the cost of rising fuel bills.

With air passenger traffic growing every year, airlines are faced with the prospect of issuing and processing substantially more tickets in the years ahead. The solution developed by HP and LRS helps improve operational efficiency and information flow, allowing airlines to respond rapidly to this and other market trends.

"Revenue accounting can be an information treasure for airlines," said Dr. Robert Kubera, managing director, LRS. "Through the improved and more timely flow of data, airline managers are in a much stronger position to control their companies' productivity and operational efficiencies. Moreover, the provided data becomes a strategic instrument, delivering essential information for management decisions."

SIRAX, which was officially launched in September 2000, is believed by LRS to be the most comprehensive airline-specific application of its type to be made available on modern client-server technology. It runs on a high-availability HP system featuring two high-end V-class servers, each consisting of eight processors and 4 GB of memory, plus three mid-range N-class servers.

About Lufthansa Revenue Services

Lufthansa Revenue Services (LRS) provides, as a member of the Lufthansa Systems Group, extensive passenger revenue accounting services and products for scheduled airlines. The company has 40 years Revenue Accounting know-how and experience in revenue accounting service production and the utilisation of state-of-the-art technology.

The comprehensive product-range of LRS includes classical revenue accounting services as well as revenue accounting hosting, consulting, and training. As a provider of revenue accounting systems, LRS offers state-of-the-art systems such as SIRAX, a prorate engine and an electronic image archive. Further information about LRS and its products can be found on the World Wide Web at http://www.accounting-solutions-plus.de.

The LRS solutions help airlines to migrate their passenger revenue accounting into a value-adding profit centre. They support airline management decisions and meet the forward-looking issues of the airline business.

LRS has 600 employees and is headquartered in Norderstedt/Hamburg, Germany. Since 1998 LRS operates as an independent company. Its turnover in 2000 was ?55 million.

About HP

Hewlett-Packard Company -- a leading global provider of computing and imaging solutions and services -- is focused on making technology and its benefits accessible to individuals and businesses through simple appliances, useful e-services and solutions for an Internet infrastructure that's always on.

HP had total revenue from continuing operations of $48.8 billion in its 2000 fiscal year. Information about HP and its products can be found on the World Wide Web at http://www.hp.com.

This news release contains forward-looking statements that involve risks and uncertainties, as well as assumptions that, if they never materialize or prove incorrect, could cause the results of HP and its consolidated subsidiaries to differ materially from those expressed or implied by such forward-looking statements. All statements other than statements of historical fact are statements that could be deemed forward-looking statements, including any projections of earnings, revenues, or other financial items; any statements of the plans, strategies, and objectives of management for future operations; any statements concerning proposed new products, services, or developments; any statements regarding future economic conditions or performance; statements of belief and any statement of assumptions underlying any of the foregoing. The risks, uncertainties and assumptions referred to above include the ability of HP to retain and motivate key employees; the timely development, production and acceptance of products and services and their feature sets; the challenge of managing asset levels, including inventory; the flow of products into third-party distribution channels; the difficulty of keeping expense growth at modest levels while increasing revenues; and other risks that are described from time to time in HP's Securities and Exchange Commission reports, including but not limited to the annual report on Form 10-K for the year ended Oct. 31, 2000, and subsequently filed reports. HP does not intend to update these forward-looking statements.