25 August 2011

Lufthansa Close to Offloading Majority Share in IT Subsidiary

Lufthansa Group IT daughter company - Lufthansa Systems (LSY) has been the subject of much speculation as to its future following the decision in in 2005 to move its reservations functions to Amadeus ALTEA or the STAR Alliance Common IT platform.

With the loss of its anchor customer (parent Lufthansa and satellite airlines) for reservations – LSY embarked on an independent effort to replace its aging Unisys based platform known as Multi-Host with a new generation product based on Unisys’s Air Core Environment platform. However this project was abandoned and LSY never proceeded with any customers for the Unisys based system. You cannot find any current reference to this system called FACE on the LSY site but there are still historical references: http://www.lhsystems.com/resource/document/pdf/news/keydata_2004.pdf Instead the Frankfurt based company has concentrated on its line of Airline Solutions, Industry Solutions and Infrastructure Services.

There was much speculation that Lufthansa would want to align its IT services business with that of its part owned Amadeus company in which LH still retails a sizable share. The Financial Times and other news outlets are reporting that LH Group will offload the majority share in LSY. However it appears that the leading two contenders according to these news reports are TCS (India’s Tata Consultancy Services ) and IBM’s T&T Group .
The likely scenario is that the winning bidder will retain the name LH Systems but own a majority stake 51% leaving Big Yellow with 49%.

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