Sabre is to sell its airline information technology outsourcing business to Electronic Data Systems (EDS) and focus on travel distribution. The unit of the Dallas, Texas-based company provides IT services for American Airlines, US Airways and others.

EDS will acquire the outsourcing business for $670 million in cash, and receive a 10-year $2.2billion contract to manage Sabre's IT systems. The companies will jointly market Sabre's airline software products.

EDS will provide $20 million over two years towards developing Sabre's software business. The two companies will eventually merge their airline software portfolios.

Sabre's outsourcing business employs 4,800 people and generated revenues of $600 million last year. The company was formerly part of American's parent, AMR, and as part of the deal the airline will take back revenue management and capacity planning functions now performed by Sabre.

Source: Flight International