Sabre to sell off IT, outsourcing operations to EDS

Sabre Holdings Corp. today announced a US$3 billion deal to sell its airline IT outsourcing business and its internal technology assets to Electronic Data Systems Corp. -- a move that's prompting Sabre outsourcing customer American Airlines Inc. to pull some of its application development activities back in-house.

About 4,200 employees at Sabre will transfer to EDS as part of the agreement between the two companies, which is expected to be completed by midyear. The deal includes a sale of Sabre's outsourcing business and IT assets, valued at $778 million, plus a 10-year, $2.2 billion contract for EDS to manage Sabre's IT systems.

The two companies said the sale will also include Sabre's existing outsourcing contracts with American Airlines, US Airways Group Inc. and dozens of other airlines. That would put EDS in charge of key check-in and passenger management systems that are used by the airlines.

In a separate announcement, American Airlines said select technology management functions now provided to it by Sabre are expected to be transferred over to EDS after the deal closes. Included are American's data center operations, network services and some application development functions.

But American, also based in Fort Worth, said development of key applications related to revenue management and capacity planning will now be done internally. The airline added that it expects to absorb about 250 Sabre employees, many of whom worked for American when Sabre was owned by parent company AMR Corp.

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