FRANKFURT (AFP) – German airline Lufthansa said on Wednesday it will outsource its IT infrastructure services to US computer giant IBM to cut costs by 70 million euros ($89 million) annually.
“Deutsche Lufthansa today announced that in the course of realigning its IT activities, it will be entering into a long-term IT partnership shortly.
“According to the terms to be agreed, Lufthansa will outsource all of its IT infrastructure services to IBM,” the airline said in a statement.
IBM would also take over the Infrastructure division of the current Lufthansa Systems. The outsourcing agreement would run for seven years, and “will enable Lufthansa to benefit from a permanent reduction of IT infrastructure costs by average approximately 70 million euros annually,” the statement said.
Overall, the deal will result in one-off charges of 240 million euros for Lufthansa which would be reflected in the group’s bottom-line profit for 2014.