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Lufthansa to sell IT units to IBM

2014-10-23 08:50 Xinhua Web Editor: Qin Dexing
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German airline Lufthansa on Wednesday announced it would sell its information technology (IT) infrastructure unit to IBM to cut costs and gain expertise.

According to Lufthansa, the deal would be signed "shortly."

The firm will split its subsidiary Lufthansa Systems into three independent companies and sell the IT infrastructure division to IBM. Lufthansa also plans to outsource all its IT business to the U.S. IT group within seven years.

"It will directly improve our cost base and allows access to the latest IT technologies which we will use to continue digitizing our business processes in order to increase efficiency and customer focus," Lufthansa finance chief Simone Menne said in a statement.

The contract, still under final negotiations, is expected to help Lufthansa save approximately 70 million euros (88.62 million U.S. dollars) per year. However, the move will result in an additional one-time cost of 240 million euros this year due to restructuring.

Lufthansa said the deal will be subject to the approval of the Lufthansa supervisory board and antitrust authorities. The split-up and sale of IT infrastructure is set to be completed in the first quarter of 2015.

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