IBM, Qantas ink seven year outsourcing deal

Qantas has signed a seven year agreement to outsource its project delivery functions to IBM.

Financial terms were not disclosed as part of the agreement; however, media reports have estimated the contract to be worth $200m.

In line with the airline's $1.5 billion drive to reduce costs, the agreement puts IBM in charge of Qantas' new computing projects.

According to IBM spokesperson Jan Walbridge, IBM will supply its project management delivery expertise, industry knowledge, and tools and training capabilities in support of Qantas' project portfolio.

"This is a services agreement where Qantas and IBM determine which products serve the project best," she told iTnews.

A total of 178 of Qantas's project delivery staff have been offered employment at IBM as part of the agreement. Those who do not accept will either be redeployed within Qantas or made redundant.

David Hall, Qantas Executive Manager of Corporate Services and Technology, said that access to  IBM's scale and expertise would enable quick, financially-efficient project delivery, and improved customer experience.

"We are confident that IBM will deliver significant benefits to our business," he said in a statement to the media.

The deal is the latest in a series of outsourcing agreements that has seen Qantas shed more than 1000 IT jobs in the past 12 years.

It builds on an existing relationship with IBM, which has managed Qantas' servers and IT infrastructure since 2004.

The airline also has outsourcing agreements with Indian IT service providers Tata Consultancy Services and Mahindra Satyam, as well as Fujitsu and Australian systems integrator ASG.