Singapore Airlines and IBM Announce IT Services Agreement

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ARMONK, N.Y. & SINGAPORE - 26 Oct 2004: Singapore Airlines (SIA) today signed an agreement with IBM, valued at around S$300 million (Singapore dollars) over seven years, to outsource its IT infrastructure functions. The contract formalizes SIA's plans to outsource its IT infrastructure functions.

Under the agreement, IBM will manage SIA's data center, end-user computing support service, and information technology help desk. SIA staff in the affected areas have been offered the opportunity to join IBM on a package comparable in both remuneration and role. The employees will also have access to broader IT skills development and training opportunities at IBM.

Mr. Mak Swee Wah, Singapore Airlines' senior vice president of planning, who is responsible for SIA's IT services, said this agreement will tap on the wealth of IBM's expertise to manage Singapore Airlines' IT needs going forward.

"By outsourcing these functions to IBM, Singapore Airlines will meet its goal of focusing on its core business, enabling both efficient cost management and a high standard of customer service and satisfaction," he said.

Ms. Patricia Yim, Managing Director, IBM Singapore, said, "We are happy to be part of this strategic agreement with Singapore Airlines, one of the world's premier airlines. This agreement will enable Singapore Airlines to be more focused on its core business of delivering world-class services, more responsive to its passengers and help improve its overall competitiveness. We are also delighted to welcome the SIA staff to IBM. Their presence will ensure we continue to provide the highest level of service to SIA and its customers." SIA anticipates one-off costs associated with the transition of around S$10 million, and is projecting cost savings of approximately S$15 million per annum.

The agreement will come into effect on November 18, 2004.

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