Delta Seeks To Outsource 200 IT Jobs to IBM
Delta Air Lines Inc. asked a bankruptcy judge Tuesday to let the nation's third-largest carrier use IBM Corp. rather than its own employees to maintain its computer systems.
Delta Air Lines Inc. asked a bankruptcy judge Tuesday to let the nation's
third-largest carrier use IBM Corp. rather than its own employees to maintain
its computer systems.
Delta spokeswoman Betsy Talton said the outsourcing agreement, if finalized
and approved by the court, would result in "substantial savings"
for the Atlanta-based company, though she declined to say how much.
About 200 of the 1,800 employees in Delta's technology unit would be
affected, though it's unclear how many might lose their jobs. Often in
such arrangements, some employees transfer to the company to which the
work is being outsourced.
Terms of the deal with Armonk, N.Y.-based IBM were not disclosed in the
court filing. An IBM spokesman declined to comment.
A hearing on the request, if necessary, is set for Aug. 22 in U.S. Bankruptcy
Court in New York.
Delta said it solicited proposals from several computer service providers,
though it didn't name the others. Delta's computer systems run a variety
of applications including customer reservations, company record-keeping,
communications, flight management and maintenance tracking services, the
filing says. Under the deal, IBM would be responsible for operating and
maintaining Delta's mainframe and other computer hardware.
"The agreement will allow Delta to take advantage of IBM's computer
expertise so that Delta can focus its restructuring efforts on air transportation,
and entering into and performing under the agreement will lead to cost
savings for Delta," the airline said in its filing.
Delta has streamlined costs since filing for bankruptcy last September.
It currently outsources some reservation tasks to India.
The airline has also cut jobs, restructured aircraft leases, negotiated
concessions from its pilots and imposed pay cuts on other employees. It
is seeking to terminate its pilots' pension plan effective Sept. 2.
Delta expects to emerge from Chapter 11 by the middle of 2007. It is
scheduled to report its second-quarter results and file its monthly operating
report for June on Wednesday.