Germany's Lufthansa plans to sell IT division to IBM as part of proposed outsourcing deal

Technology Associated Press

Germany's biggest airline, Lufthansa, says it plans to sell its information technology infrastructure division to IBM as part of a deal aimed at reducing the company's IT costs.

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Lufthansa said Wednesday that it expects to cut costs by about 70 million euros ($89 million) per year under the proposed deal, which will see the airline outsource all its IT infrastructure services to IBM. It said negotiations have still to be completed.

Lufthansa says it will take one-time charges this year of 240 million euros due to restructuring and other costs resulting from the deal. It didn't give the value of the sale, which it expects to take effect in March. The division has some 1,400 employees.

Lufthansa shares rose 1.4 percent to 12.24 euros in Frankfurt trading.