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Story URL: http://services.silicon.com/itoutsourcing/0,3800004871,39158982,00.htm

SITA takes off with City Airport's outsourced IT
Airport chief: "IT - we can't run without it but don't want to specialise in it"

By Tony Hallett

Published: Friday 19 May 2006

London City Airport has continued its push to concentrate on its core business, outsourcing all of its IT and communications to SITA in a seven-year deal.

Richard Gooding, London City Airport MD, told silicon.com: "We need to concentrate on our core business and our core business isn't IT and telecoms."

The airport already outsources its power needs to EDF and maintenance to PME.

Gooding said: "To us, this is a bit like a utility. We can't run without it but don't want to specialise in it."

A value on the deal hasn't been given but it follows a 10-year, $200m contract SITA signed with Düsseldorf airport last summer.

Gooding added that London City Airport - owned ostensibly by Irish billionaire Dermot Desmond but potentially up for sale as of last week with Morgan Stanley hired as advisors - "checked out Düsseldorf pretty closely". The airports are of similar size and the German facility was SITA's first European win of this type.

All bar one member of staff will transfer to SITA - the head of IT is moving out to set up his own technology business.

The deal is not thought to be about cutting costs. Gooding added that it is "about expertise, about getting it right and about the long term".

City Airport did consider other outsourcing giants but Gooding said that SITA's background - it is owned by airlines - was relevant to the ultimate decision.

The airport, east of the centre of the capital and close to London's Docklands, is seeing rapid growth - it carries just over two million passengers per year now, forecast to quadruple over the next 25 years - both in the build up to the 2012 Olympics and as London continues to boom as a financial centre. More than half of all its passengers are estimated to be related to that sector.

Francesco Violante, SITA CEO designate, described this latest airport deal in a statement as "further evidence of an industry trend" towards outsourcing.