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DALLAS (The Street) -- AMR (AMR) and Hewlett Packard (HPQ) - Get HP Inc. Report say they will jointly develop improved passenger service technology, a venture that could make American more efficient while enabling HP to develop a new product to sell to airlines.

Already, H-P manages passenger service technology, including reservations, pricing, ticketing, flight information and check-in for American, using systems developed by Sabre. Now, H-P will take over development as well. American will retain Sabre, which it created and then spun off in 2000, for services including flight operations and airport staff management and may provide it with new work as well.

On a conference call with reporters, both companies declined to disclose the cost or revenue implications of the deal. However, Monte Ford, American chief information officer, said the technology would be built and implemented in steps over the next four years, enabling American to "pay for technology as we build it and use it in smaller increments."

In particular, Ford said HP will move to upgrade methods to interface with new technologies from mobile phones to social Web sites. He said the systems currently in place are "built around transactions," while new systems will be built to respond to customer needs.

Additionally, he said, the airline's information systems should be simplified. "We need to take the data, all of the data, and put it in a simple place and have a single version of the truth," he said. "Today's environment has multiple and disparate monolithic systems with their own data imbedded."

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HP formally acquired Plano, Texas-based information technology company


a year ago. Ann Livermore, HP executive vice president for technology solutions, said the deal with American provides "a perfect example of what we hope to achieve" through the EDS acquisition" and "really revolutionize what's available today in the industry.

"When you have an application originally created 50 years ago, over time those applications end up with a lot of additions, a lot of changes that you'd do differently if you were starting with a new approach," she said.

-- Written by Ted Reed in Charlotte, N.C.