IBM today announced that it has signed a seven-year 1 billion Euro outsourcing contract to deliver IT infrastructure services for the Deutsche Lufthansa AG and its Group companies. According to the agreement, which is subject in particular to the approval of the Lufthansa Supervisory Board and antitrust authorities, IBM will first optimize the airline's IT processes to increase efficiency, which is expected to generate an estimated cost savings by an average of approximately 70 million Euro annually for the Lufthansa Group.

Over the life of the contract, IBM will bring new solutions that incorporate business analytics with mobile computing and social business.

"Outsourcing the IT infrastructure to IBM will strengthen the competitiveness of the Lufthansa Group as a whole. The transformation plan will directly improve our cost base. Together with IBM we will have access to the latest IT technologies not only to lower our IT cost but also to continue digitalizing our business processes in order to increase efficiency and customer focus," said Simone Menne, Member of the Executive Board and CFO at Deutsche Lufthansa AG and Chairperson of the Supervisory Board of Lufthansa Systems AG.

The Lufthansa Group, with its airline brands and its logistics, aircraft maintenance and catering businesses, is realigning the Group's IT activities. By partnering with Lufthansa AG in this transformation, IBM will first optimize the Lufthansa IT infrastructure for maximum efficiency, make it ready for the cloud computing and then bring in technologies such as business analytics, mobile computing and social business to help Lufthansa meet its business objectives.

IBM will begin the multi-stage transformation of the Lufthansa IT landscape by implementing collaboration and messaging tools for social business, new network and voice services, an optimized electronic workplace solution and IBM's security framework with its security solutions and monitoring.

With IBM's MobileFirst device management framework, Lufthansa Group will also benefit from a global mobile infrastructure allowing Lufthansa to provision, secure and manage mobile devices and apps easily, giving Lufthansa customers and employees simplified access and new capabilities for its reservation systems and business processes.

As part of the outsourcing agreement, IBM will manage Lufthansa Systems' entire data center operations, help desk and printer services along with individual infrastructure services. Around 1,400 Lufthansa Systems employees will transfer to IBM. Infrastructure services are scheduled to begin from IBM on April 1, 2015.