British Airways to Outsource Core Systems

FRAMINGHAM (04/28/2000) - British Airways PLC has struck a 10-year deal under which Amadeus Global Travel Distribution will operate and develop its reservation, inventory and departure control systems.

Amadeus has built a Madrid-based reservation system through which 110 competing airlines can use the same platform as Amadeus-linked travel agencies. The deal will give British Airways a seamless reservations link with other members of the Oneworld alliance of airlines, such as Iberia, Finnair Oyj and LanChile SA, the companies said.

"This partnership should enable us to operate core commercial systems more cost-effectively and improve time to market, delivering better functionality faster and cheaper," said Bryan Wilson, director of information management at British Airways.

Growing Trend

Jeffrey Osborn, a transportation industry consultant at Science Applications International Corp. in Peachtree City, Georgia, said the deal reflects a growing trend in the airline industry.

"Airline executives are saying, ‘My core business is flying airlines and moving people,'" Osborn said. "It's not a telecom business."

Amadeus will set up a site for British Airways near London's Heathrow Airport to support its architecture and develop a new generation of inventory and departure control systems. The current British Airways transaction-processing facility team will be incorporated into the Amadeus group to help develop those technologies.

IT Support

Osborn pointed to American Airlines' spin-off of Sabre Inc., Deutsche Lufthansa AG's information technology deal with Deutsche Telekom AG and Delta Air Lines Inc.'s wireless broadband support deal with San Francisco-based SoftNet Systems Inc. as examples of air carriers drawing a line between air travel and IT functions.

"As old as these airline systems are, a lot of their IT guys are just trying to keep their heads above the water and doing yeoman work just to stay at that level," Osborn said. "Providing those core IT services is literally an all-encompassing, all-occupying event. It makes a lot of sense to have someone else handle that stuff for you."

Amadeus was formed in 1987 out of an alliance among four airlines, including Deutsche Lufthansa and Air France. Its global distribution system puts users on the same pricing and passenger records platform.

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