Delta wants to outsource computer maintenance to IBM

ATLANTA (AP) - Delta Air Lines Inc. asked a bankruptcy court judge Tuesday to allow the nation's third-largest carrier to use IBM 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 the Delta technology unit that currently operates and maintains the airline's computer infrastructure would be affected, though it's unclear how many might lose their jobs, Talton said.

Terms of the deal with Armonk, N.Y.-based IBM Corp. were not disclosed in the court filing. Delta did not attach a copy of the agreement to the filing, but said it would provide one to the court upon request.

A hearing on the request, if necessary, is set for Aug. 22 in U.S. Bankruptcy Court in New York.

An IBM spokesman declined to comment.

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 mid-range 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 of its 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. It believes pension reform legislation will save its other employees' pensions.

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.


On the Net:

Delta Air Lines, Inc.: http://www.delta.com