British Midland, the UK's second-largest scheduled airline, aims to dedicate its IT skills toward e-business and customer-facing projects by outsourcing all its IT and communications infrastructure.
In a bid to overcome the constraints of its legacy systems, the airline has named ICL in a £30m deal, anticipating savings of about £2m in running costs over five years.
ICLhas already taken over British Midland's IBM mainframe operation at Castle Donnington, East Midlands, and its service desk.
Some 40 staff have transferred to ICL and it will move the mainframe operations to its Salford, Greater Manchester, datacentre in September.
By then British Midland hopes to have outsourced its mid-range and desktop operations to ICL. The airline's telecoms operations are expected to be outsourced soon after, though they may not go to ICL.
Richard Dawson, British Midland's IT manager, told Computer Weekly that efficiency, rather than direct cost savings, was driving the move.
"This is about service improvements, best practice, improved resilience and reduced failure rates, rather than straight bottom-line saving," said Dawson. "We are not going to pay a huge premium though," he added.
Key British Midland staff would be better deployed on e-business and customer relationship management projects, rather than struggling to bring legacy systems up to date, Dawson said.
"Our IT was not really aligned to the needs of the business. We didn't have the skills capability we needed and we weren't providing the quality of service a growing company needs.
"We could either spend a lot of time and money developing our internal capability, with no guarantee that we'd achieve best practice, or turn to an established supplier."
ICL beat IBM, Sema and ITNet to win the contract.
Ian Leath, Business Director at ICL, said the company expected to partner British Midland's move into e-commerce as well as managing and upgrading the infrastructure. "We can work both sides of the coin," he said.