Finland’s flag carrier airline Finnair Oyj and IBM have signed an agreement to run Finnair’s IT systems and develop new e-business applications that will help Finnair become an industry leader in e-business. Among the focus areas will be wireless check-in, e-ticketing and Internet and wireless ticket sales. The agreement is valued at $400 million over a 10 year period.
Finnair is leading the development of wireless Web commerce technology for the oneworld alliance, which includes eight of the world’s leading airlines. Finnair and IBM will create an innovation centre to serve as an incubator for new e-business solutions. The centre will draw on IBM’s research, technology, and industry expertise as well as Finnair’s deep airline industry know-how and experience. The innovation centre will become an important vehicle for Finnair as the airline transforms its infrastructure and provides new e-business services to its customers.
“This relationship represents a significant departure from traditional IT outsourcing,” said Joseph Benaroya, general manager, travel and transportation sector, IBM Europe. ” It builds on Finnair`s in-house capabilities, provides leading edge industry solutions and strengthens Finnair`s competitive advantage in the global marketplace as well as IBM’s airline industry expertise.”
“This will further improve our competitiveness and speed up the development of new e-business solutions. The resources IBM is bringing to Finnair through the new innovation centre will be invaluable to us as we work toward our goal of generating more than half our ticket sales via the Internet by 2006,” said Eero Ahola, senior vice president, corporate business development and strategy, Finnair. “As a result of this relationship, Finnair will also be able to reduce IT-related expenses and release capital for our core airline business.”
The venture is forty percent owned by Finnair and sixty percent by IBM. Approximately 200 employees from Finnair’s information technology group will be part of the venture, along with a number of IBM employees with expertise in the technology and airline industries. Tuomo Haukkovaara, from IBM, will be the chief executive officer.
The arrangements require the approval of the Finnish Competition Authority.
Finnair, one of the world’s oldest operating airlines, was established on 1st November, 1923. The company is a pioneer in its field in exploiting e-commerce and has developed a number of Internet and mobile telephone based services. By 2006 Finnair estimates that most of the passengers will be using Internet services, from making their ticket reservations to clearing check-in. Finnair`s route network covers over 50 international destinations and 21 destinations within Finland. The number of personnel of the Finnair Group is approx. 11 000 and turnover is 1,6 billion euros. Annually Finnair carries 7,5 million passengers. www.finnair.com
IBM is the world`s largest information technology company, with 80 years of leadership in helping businesses innovate. Drawing on resources from across IBM and key Business Partners, IBM offers a wide range of services, solutions and technologies that enable customers, large and small, to take full advantage of the new era of e-business. The fastest way to get more information about IBM is through the IBM home page at www.ibm.com