Lufthansa (LH, Frankfurt International) parent, Lufthansa Group, has announced it is to split its IT subsidiary, Lufthansa Systems, into three separate companies with plans to outsource its Infrastructure division needs to IBM.
Under the provisional terms of the tentative 7-year agreement, IBM is expected to take over the Infrastructure division of the current Lufthansa Systems AG.
"It will enable Lufthansa to benefit from a permanent reduction of IT infrastructure costs by average approximately EUR70million (USD88.63million) annually. An offer to this effect has been submitted and is now subject to final negotiations," it said. "According on the current status of the negotiations, the new partner is expected to take on all approximately 1,400 employees of the Infrastructure division. The Kelsterbach and Budapest sites are to be retained. Clear commitments have also been made regarding the preservation of the jobs at the other sites."
Lufthansa Systems' Airline Solutions and Industry Solutions divisions will meanwhile be spun off into independent operations though this is still subject to antitrust and board approval.
The split-up of Lufthansa Systems and the formal launch of the new companies are due to take place in the first quarter of 2015. The completion of the Infrastructure sale is planned for March 31, 2015.
Overall, Lufthansa Group expects to incur a one-off EUR240million (USD303.89million) charge as a result of the restructuring.
