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Korean Air, IBM in outsourcing deal

Korean Air inks a 10-year, $120 million outsourcing deal with IBM Global Networks.

Korean Air is catching a flight with IBM Global Networks.

The airline has inked a 10-year $120 million outsourcing contract with IBM. Under the contract, IBM will provide data center service management and take responsibility for all of the company's major computer systems.

IBM has formed a subsidiary, IBM Global Services Korea, to deliver outsourcing services to the airline, which is one of Asia's largest passenger airlines and the world's second largest cargo freighter.

The two companies are also close to reaching a final agreement on a second phase of their relationship-building a global network intended to expand Korean Air's international reach and link the airline closer to its customers. That deal is expected early next year.

The deals will provide Korean Air with a competitive advantage by reducing its information technology costs and improving passenger services, said Y.H. Cho, president of Korean Air.

IBM provides outsourcing services to other airlines including Cathay Pacific, Varig, Air Canada, Air New Zealand and Ansett Australia.