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BEIJING, Nov. 19 -- German flag air carrier Lufthansa has signed an outsourcing contract with IBM worth 1 billion euros (1.25 billion U.S. dollars) , according to media reports on Wednesday.

When announcing the contract on Tuesday, Lufthansa said the move is part of the company’s plan to restructure and cut costs.

Under the seven-year deal, IBM said it will help the airline build a range of services for customers and employees, including cloud computing, mobile and analytic tools, through which IBM intends to make the airline's IT processes more efficient, saving about 70 million euros a year.

Around 1,400 Lufthansa Systems employees will transfer to IBM as part of the deal, which was first outlined in October.

“Outsourcing the IT infrastructure to IBM will strengthen the competitiveness of the Lufthansa Group as a whole,” Lufthansa‘s chief financial officer Simone Menne said.

The deal is now subject to approval by antitrust authorities and the Lufthansa supervisory board.

(Agencies)