Lufthansa Close to Selling IT Infrastructure Unit to IBM

German airline Lufthansa is close to selling its IT infrastructure unit to IBM and outsourcing its IT services to the technology major as part of a broader restructuring of its Lufthansa Systems division.

Lufthansa, in a statement on 22 October, said the move will help reduce its annual IT costs by around €70m (£55m, $89m) a year but will result in a one-off pre-tax charge of €240m.

Lufthansa said the charge will not impact on its operating result for 2014.

A Lufthansa spokeswoman told Reuters that a final price for the sale was still being negotiated.

Under the planned deal, Europe's largest airline by revenue will sell its IT infrastructure division to IBM and will outsource all of its IT infrastructure services to the American firm for a period of seven years.

The statement said: "According on the current status of the negotiations, the new partner is expected to take on all approximately 1,400 employees of the [IT] infrastructure division."

Chief Financial Officer Simone Menne said in the statement: "The Cooperation with a global and successful IT group like IBM will strengthen the competitiveness of the Group companies and the Lufthansa Group as a whole.

"It will directly improve our cost base and allows access to the latest IT technologies which we will use to continue digitising our business processes in order to increase efficiency and customer focus."

"This will also give the employees of the Infrastructure division clear job prospects and enable them to participate in future technological developments," Menne added.