Revised:  06/23/2007

KLM Cargo Choose the HERMES Cargo Management System to Realize Real-Time Warehouse at their Amsterdam Schiphol Hub

Contact:

Barry Zigner

CEO

HERMES Logistics Technologies Limited

+44-1344-667052

barry_zigner@hermes-cargo.com

KLM Cargo Choose the HERMES Cargo Management System to Realise Real-Time Warehouse at their Schiphol Hub

Deal worth over $1.3m

Bracknell, United Kingdom, (June 25, 2007) - HERMES Logistics Technologies (HLT), a leading provider of air cargo management solutions and a subsidiary of Magic Software Enterprises Limited (NASDAQ: MGIC), announced today that it has signed a contract with KLM Cargo to deliver a state-of-the-air cargo management system to for the KLM Cargo Hub at Schiphol airport, in a deal worth over US$1 million. The comprehensive system, based on HLT’s innovative HERMES cargo management solution, is due to be rolled-out into the KLM Cargo hub starting October 2007 and through 2008. It will enable KLM Cargo to further increase its efficiency in the hub by introducing real-time data capture throughout the cargo warehouse and by consolidating IT systems.

KLM Cargo offers a wide range of products and services. Next to the widely recognized and uniform SkyTeam Cargo product portfolio, KLM Cargo also offers Other Products, all together some twenty-seven specialized products. KLM Cargo serves the needs of the worldwide customer base, whether they require Speed services, Specialized handling and transport or total logistical Solutions. Almost all of these services are airport-to-airport and aimed at forwarders, brokers and other freight transport companies. KLM main cargo hub Amsterdam Schiphol airport is at the heart of the KLM network and plays a critical role in the delivery of all KLM Cargo’s products.  The diversity of cargo that KLM handles requires absolute visibility of the entire operation to ensure that service levels are consistently met. The implementation of HERMES, a solution that increases productivity levels and lowers operational costs, is part of KLM’s commitment to continue to provide the highest level of service to its customers.

Mattijs ten Brink, Vice president World Wide Operations of KLM Cargo comments, “We were looking for ways to extract that extra bit of efficiency out of an already slick operation and the HERMES system combined with HLT’s considerable expertise within the air cargo industry seemed the perfect match of real-time warehouse capability, flexibility, state of the art technology and increased management control with a proven return on investment.”

Real-time warehouse management promises to improve efficiency by ordering tasks and directing workers to minimize “deadheading”. It provides dynamic routing using radio frequency terminals to acknowledge completion of a task and direct the worker or forklift truck to the next task in his/her area. HERMES will enable KLM Cargo to leverage the advantages of mobile handheld terminals to track and manage cargo in real-time within their cargo hub. HERMES provides high levels of process automation and reduction of operational errors due to its utilisation of barcode technology (HERMES is also ready for RFID (Radio Frequency Identification)). HERMES will also allow KLM Cargo to employ proactive Service Level management of all shipments with its built-in warnings and automatic reminders to operational staff of product specific requirements.

Previous implementations of HERMES have resulted in significant increases in service quality and productivity, enabling many customers to increase the amount of cargo handled within existing resources, whilst minimising operational costs. This is possible because HERMES automates many of the processes involved and proactively time-manages the cargo handling businesses including back office operations such as billing and invoicing.

Barry Zigner CEO of HERMES Logistics Technologies says, “We are delighted to be working with KLM on such a strategic facility - their main cargo hub. Having been selected by KLM Cargo, a major player in the marketplace is testimony to the unique benefits of increased efficiency and quality that HERMES can bring to the industry.”

About HERMES Logistics Technologies
HERMES Logistics Technologies Limited, a subsidiary of Magic Software Enterprises (Nasdaq: MGIC), develops, markets and supports software solutions that enable independent cargo Ground Handling Agents and Airlines gain competitive edge by increasing service levels and operational efficiency while reducing operational costs. HLT’s products provide Real-time data capture capability and availability of information together with unique profiling abilities that allows cargo handlers realise measurable, accountable and tailored levels of services to their customers.  The Company's HQ offices are located in the United Kingdom, Forth House, Brant’s Bridge, Bracknell RG12 9BG, +44-1344-667052.