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Story URL: http://services.silicon.com/itoutsourcing/0,3800004871,39161735,00.htm

Delta and IBM shake hands on seven-year IT deal
Just waiting for the nod from bankruptcy court...

By Andy McCue

Published: Wednesday 23 August 2006

Cash-strapped Delta Air Lines has agreed a seven-year IT outsourcing deal with IBM - pending approval from the US bankruptcy court.

The airline revealed last week it had filed a request with the court for permission to outsource IT support and maintenance to IBM. Delta has been in Chapter 11 bankruptcy protection since last year and has just posted a loss of $2.2bn but is aiming to emerge from bankruptcy during the first half of next year.

The value of the outsourcing deal has not been disclosed but under the terms of the agreement IBM will partner with Delta's wholly owned IT subsidiary, Delta Technology, to provide mainframe and mid-range services.

The airline said it expects to make "significant" cost savings over the duration of the contract.

Shirley Bridges, CIO at Delta, said it will provide the airline with a more responsive and cost-effective service delivery model.

She said in a statement: "By working together, we will achieve our goal to reduce costs on a long-term basis while ensuring a positive customer experience."