Air NZ exercises Fujitsu exit clause

IBM adds the mid-range servers to its work for the national carrier. ADAM GIFFORD reports.

Air New Zealand has ended its outsourcing contract with Fujitsu early, giving IBM Global Services responsibility for mid-range servers as well as its mainframe.

IBM also replaced Compaq as supplier of PC hardware. Gen-i will continue to manage and support Air New Zealand's PCs and its local and wide area networks, beating IBM, Fujitsu and Compaq for the contract.

Fujitsu's northern regional manager, Jim Jericevich, said Fujitsu's two-year contract, which started in August last year, had a termination clause after the first year.

"Air New Zealand notified us it was electing to terminate the agreement on the basis it would combine its server management with its mainframe arrangement with IBM," Mr Jericevich said.

He said that at the peak Fujitsu had 40 people at Air New Zealand. The contractors and some of the permanent staff had now been laid off.

Mr Jericevich said the contract was worth "multimillions".

Air New Zealand runs all business applications, such as its Oracle Financials and SAP maintenance modules, on mid-range servers. The mainframe is used for traditional airline booking and reservations.

Mr Jericevich said much of Fujitsu's work had involved moving systems to Melbourne, where Air New Zealand was trying to combine its systems with Ansett's.

"We delivered a lot of diverse skills to that site.

"We did a lot of hard work and achieved our objectives.

"But a multivendor environment is very competitive, and sometimes a competing vendor can wrap a solution as part of a bigger solution, which is an advantage we didn't have," Mr Jericevich said.

Andrew David, Air New Zealand general manager for information technology, said that after buying Ansett, the airline decided to reduce the number of suppliers it dealt with.

"IBM offered the best deal for midrange support because it can consolidate with the data centre mainframe."

Mr David said the move back from Australia should be completed by the end of the year.



"We're working with the [Ansett] administrator on who owns what, and we're now bringing back the critical stuff we need to maintain operations here."

Mr David said Air New Zealand had expected to save $100 million over three years by rationalising suppliers and merging its IT infrastructure with Ansett's, but "the savings are not as big now because it is not the same scale."