Virgin Atlantic Renews Tech Outsourcing Contract with Tata Consultancy Services

Britain-based Virgin Atlantic is renewing its technology-outsourcing contract with Tata Consultancy Services of India, according to reports. Under the terms of the agreement, Tata Consultancy will keep maintaining Virgin Atlantic’s network, including its computing infrastructure as well as application development requirements until 2011.

Tata is also contracted to establish a 24-hour help desk offering for Virgin Atlantic and it will also manage the airline’s relationships with other IT vendors.

Virgin Atlantic’s IT director, Mike Cope said in a statement, airlines today are required to make us of IT more than in the past in order to be fully operational and excel in an extremely competitive market.

Reports say that the financial terms of the contract between the two sides have not been revealed.

Most airline companies tend to outsource their tech and customer services to low-cost countries and India is a typical example of a cheap outsourcing destination. However, these savings are somewhat compromised in the wake of higher jet fuel prices, spurred on by record crude oil prices. So many airline firms are saying the savings are limited when it comes to outsourcing.

Some airlines, including Midwest, have responded with cuts in their service, while other airlines like American Airlines and Delta are supplanting record fuel charges on to ticket prices.

For Tata Consultancy Services, the travel and transportation segment has become business that is even more significant. It accounts for a sizable 4 percent in the firm’s $5.7 billion total revenue. Tata recently unveiled a travel and hospitality innovation lab in order to come up with software and services geared toward airlines and travel firms.

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