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TMCNet:  IBM in pact to service Air India

[January 31, 2011]

IBM in pact to service Air India

Jan 31, 2011 (Mint - McClatchy-Tribune Information Services via COMTEX) -- Tweet Flag carrier Air India has signed a seven-year information technology (IT) deal worth a little more than $50 million ('228.5 crore) with International Business Machines Corp. (IBM), two executives at the airline firm said.

New York-based computer hardware and technology services firm IBM will implement the enterprise software SAP to automate various processes at Air India, the country's largest airline by number of aircraft.

It will also help the carrier with IT infrastructure and application support services, said the executives, who did not want to be identified.

An IBM spokesperson neither denied nor confirmed the development, saying, "We do not comment on rumours and market speculation." Cash-strapped Air India is majorly revamping operations. IBM will help improve Air India's operating efficiency and complement its expected entry into Star Alliance, a global grouping of airlines, one of the executives mentioned above said.

"This will also fast track the merger of Indian Airlines and Air India," he added, referring to a process that began in 2007.

In September, Jet Airways (India) Ltd, the country's largest airline by passengers flown, also opted for IBM for a 10-year deal for IT infrastructure and application support services, including employee transition, data centre operations, central helpdesk support, server and storage operations, Internet security services, network management, SAP and other operating systems.

Airlines will have to implement IT systems more effectively to meet increasing customer expectations in the coming decade, Nawal Taneja, professor and chairman at the department of aviation, Ohio State University, wrote in a January publication of the consulting firm Centre for Asia Pacific Aviation.

"Incremental changes to the business model are no longer sufficient to deal with the challenges facing the global airline industry; rather in order to survive and thrive airlines need to radically transform their business models through the deployment of game-changing technology, from new generation aircraft to advanced shopping engines to mobile and digital communications," Taneja said. "The new game-changing technology promises to change the way passengers search for, buy and experience air travel and the way airlines produce and market their products and services." Air India recently completed its migration from two different IT systems--its own and that of Indian Airlines--to a third system that will allow it to use a single code on its tickets, AI, rather than use both AI and Indian Airlines' IC.

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