Air NZ set to dump IBM for Gen-i after system collapse

Air New Zealand chief executive Rob Fyfe. Photo / Mark Mitchell

Air New Zealand is tipped to be dumping IT services company IBM in favour of Telecom's Gen-i business.

An industry insider said Gen-i had been signed to replace IBM for running the airline's Newton data centre.

The airline last night would say only that its "contract with IBM will not expire in its entirety until at least 2012".

But the airline's 13-year partnership with IBM soured last year when a power failure at the company's Newton data centre, run by IBM, crashed online bookings, call centre systems and check-ins, affecting at least 10,000 passengers on the last day of the school holidays.

In an internal email sent after the disruption, Air New Zealand chief executive Rob Fyfe said he struggled to recall during his working career "a time where I have seen a supplier so slow to react to a catastrophic system failure such as this and so unwilling to accept responsibility and apologise to its client and its client's customers".

Air New Zealand has invested heavily in technology to gain efficiencies and improve customer service, including self-service kiosks, bag drops and selling tickets over the internet.

Fyfe said the airline was "left high and dry" by IBM.

"My expectations of IBM were far higher than the amateur results that were delivered, and I have been left with no option but to ask the IT team to review the full range of options available to us to ensure we have an IT supplier whom we have confidence in and one who understands and is fully committed to our business and the needs of our customers," said Fyfe.

Scoring the Air New Zealand job would be a coup for Gen-i, which has seen big clients such as Fonterra stall its switch to the XT mobile network after a series of outages.

The deal extends an existing relationship between Air New Zealand and Gen-i to supply telecommunication services.

IBM leases the Newton facility from Air New Zealand but is in the process of spending $80 million on a new facility at Highbrook Business Park in East Tamaki.

One of the issues facing the ageing data centre is it is running at full capacity and additional computing equipment cannot be added at the site, an industry insider told the Herald last year.

IBM's New Zealand business recorded profits of $20 million last year, up 41 per cent, mainly through cutting the cost of sales.

Last night IBM said it "values the long-term relationship we have with Air New Zealand".