EDS acquires airline IT outsourcing business

EDS is to become the biggest player in the airline IT outsourcing business after signing a deal with flight reservation...

EDS is to become the biggest player in the airline IT outsourcing business after signing a deal with flight reservation specialist Sabre.

Chris Mugan

EDS has acquired Sabre's airline IT outsourcing business for $670m (£470m) while Sabre has also awarded EDS a 10-year, $2.2bn (£1.5bn) contract to manage its own IT systems.

The deal means that EDS will now act as the outsourcer to American Airlines and US Airways, taking its share of the airline IT outsourcing market to 10%. These companies will join 80 firms that have already outsourced their IT requirements to EDS, including British Airways, Virgin Atlantic and Continental.

Sabre will retain a stake in its outsourcing business, which is valued at $778m (£545m) in all.

Sabre aims to focus on its core businesses, the Sabre distribution system that travel agents use to reserve tickets and its direct flight sales sites for consumers and business, Travelocity and GetThere.

An EDS spokesman said, "This takes us into a leadership position in a sector where we see enormous growth potential as airlines continue to consolidate."

EDS also agreed to develop and market Sabre's portfolio of IT services to the travel industry. This would be significant to both companies, said the outsourcing giant's spokesman.

"It's a very interesting market opportunity. Sabre have a world-class offering, but we can invest in developing further the application service provider (ASP) model of their software," he said. Sabre launched its eMergo ASP suite at the end of last year.

This was last published in March 2001

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