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...Largest outsourcing deal in Japanese Airline Industry...

IBM Japan and Japan Airlines (JAL) will begin a 10-year information technology partnership
valued at 80 billion yen ($US664 million) to IBM.

JAL will outsource a wide range of systems development, operations and other services to IBM
Japan beginning in July to strengthen its use of information technology to meet its corporate
strategies and manage costs.

IBM Japan will invest in and provide a number of its managers and engineers to JAL
Information Technology Co., Ltd. (JIT), the IT subsidiary of JAL. This will merge IBM's
leadership and experience in outsourcing in both the Japanese and global markets with JIT's
know-how in the airline business and JAL operations.

In addition, IBM Japan will provide JIT with marketing and technology expertise to enable JIT
to grow external sales and profit.

"In an era where IT is developing at a rapid rate, this partnership with IBM will allow us to
develop new technology solutions that will drive customer satisfaction and help us meet our
corporate strategy, while increasing the external competitiveness of JIT," said Mr. Katsuo
Haneda, Senior Managing Director of JAL.

Mr Teruo Shimizu, General Manager, IBM Global Services, Japan, said, "This outsourcing
agreement is the largest of its scale for the Japanese airline industry. It combines the
strength and knowledge of both JIT and IBM to provide long-term outsourcing services to JAL
in a very cooperative manner. IBM is a leader in providing a broad range of products,
services and integrated solutions to all segments of the travel and transportation industry,
including such Asia Pacific leaders as Ansett Australia and Air New Zealand, Singapore
Airlines, Cathay Pacific and Korean Airlines."

Initially, JAL will take a 51% equity position in JIT, however after a transition period this
will change to IBM Japan holding a majority equity position.

The July 1 start date follows the signing of a basic agreement in January. The contract will
be carried out by IBM's services arm, IBM Global Services.


About JAL

Japan Airlines and its affiliates, which together comprise the largest air-transport operator
in Japan and Asia, serve a global network of 140 international and domestic locations in 31
countries. The JAL Group's core operations are in air transport and encompass hotel and
resort management, in-flight meal catering, cargo, trading and logistics, information
systems, credit card and leasing and temporary staffing.

JAL inaugurated scheduled domestic air-transport services in October 1951. Fully privatised
in 1987, the JAL Group today is one of the world's largest airlines. In FY2000, the JAL Group
had record revenues of US$14.8 billion, with net income of US$332 million

About IBM Global Services

IBM Global Services is the world's largest information technology services provider, with
nearly 150,000 professionals serving customers in 160 countries and annual revenue of more
than $33 billion (2000). IBM Global Services integrates IBM's broad range of capabilities -
services, hardware, software and research - to help companies of all sizes realise the full
value of information technology. For more information, visit:

For further information contact:

IBM Travel and Transportation Industry
Richard Whitaker, (44) 20 8818 4339,

Fenella Grey, (44) 20 7841 5487,

Geoffrey Tudor
Director, International Public Relations Japan Airlines, T: 81 3 5460 3109,

Jonathan Batty/Nicky Morgan
On Behalf of IBM
Tel: 44 (0)1753 790700

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