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Finnair and IBM Join Forces To Develop Innovative e-Business Solutions

27 June 2002

Finland's flag carrier airline Finnair Oyj and IBM have signed an agreement
to run Finnair's IT systems and develop new e-business applications that
will help Finnair become an industry leader in e-business. Among the focus
areas will be wireless check-in, e-ticketing and Internet and wireless
ticket sales. The agreement is valued at $400 million over a 10 year period.

Finnair is leading the development of wireless Web commerce technology for
the oneworld alliance, which includes eight of the world's leading airlines.
Finnair and IBM will create an innovation centre to serve as an incubator
for new e-business solutions. The centre will draw on IBM's research,
technology, and industry expertise as well as Finnair's deep airline
industry know-how and experience. The innovation centre will become an
important vehicle for Finnair as the airline transforms its infrastructure
and provides new e-business services to its customers.

"This relationship represents a significant departure from traditional IT
outsourcing," said Joseph Benaroya, general manager, travel and
transportation sector, IBM Europe. " It builds on Finnair's in-house
capabilities, provides leading edge industry solutions and strengthens
Finnair's competitive advantage in the global marketplace as well as IBM's
airline industry expertise." 

"This will further improve our competitiveness and speed up the development
of new e-business solutions. The resources IBM is bringing to Finnair
through the new innovation centre will be invaluable to us as we work toward
our goal of generating more than half our ticket sales via the Internet by
2006," said Eero Ahola, senior vice president, corporate business
development and strategy, Finnair. "As a result of this relationship,
Finnair will also be able to reduce IT-related expenses and release capital
for our core airline business."

The venture is forty percent owned by Finnair and sixty percent by IBM.
Approximately 200 employees from Finnair's information technology group will
be part of the venture, along with a number of IBM employees with expertise
in the technology and airline industries. Tuomo Haukkovaara, from IBM, will
be the chief executive officer.

The arrangements require the approval of the Finnish Competition Authority.

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