Indian software giant Satyam Computer Services has won a major Oracle deal with Qantas and is also neck-and-neck with competitor Tata Consultancy Services to win a multi-million application services contract with the airline.

Satyam has won an Oracle eBusiness suite application support and maintenance deal that will commence in August.

Yesterday's meeting of the application services review steering committee decided to begin due diligence and contract negotiations on the applications deal with Tata and Satyam, although a final decision on whether to go ahead with the outsourcing will not be taken until October.

Under pressure from rising fuel prices, Qantas has been pushing ahead with offshoring on a number of fronts, shifting some heavy maintenance checks for its Boeing 747 aircraft overseas.

In 2004 Qantas signed a $1.4 billion multi-year outsourcing deal with IBM Global Services and Telstra.

The airline's Sustainable Futures program -- which kicked off in 2003 with the aim of saving $3 billion by the 2007-2008 financial year -- has been hit for six by fuel costs, with analysts warning the company needs to slice its costs back further.

Unions are unimpressed by the IT offshoring plans, warning research they commissioned recently shows customers expect Qantas to employ Australians.

"It's short-term, short-sighted and show no commitment to Australia or to developing skilled IT jobs here," said Australian Services Union assistant national secretary Linda White. "Someone has to step in and tell Qantas its not acceptable."

A Qantas spokeswoman would not comment.