Garuda signs alliance pact with KLM

Garuda signs alliance pact with KLM

JAKARTA (JP): The national flag carrier Garuda Indonesia yesterday signed a technical agreement with Royal Dutch Airlines KLM, a Garuda statement read.

"The agreement, which was signed today, is a follow-up of the memorandum of understanding signed by the two parties on Dec. 14, 1994, in Amsterdam," said Garuda.

The technical agreement, which was signed by Garuda's president, Soepandi, and KLM's president, Pieter Bouw, covers cooperation in passengers services, cargo transportation, aircraft maintenance and a few unspecified areas.

Garuda has stated its desire to carry out a privatization plan which would include the sale of part of its common shares to a reputable foreign partner through direct placement and the sale of another part to the public through a capital market.

The statement, however, did not address the privatization issue.

Minister of Finance Mar'ie Muhammad last December told members of the Budgetary Commission of the House of Representatives that Garuda's privatization plan, which has been approved by President Soeharto, will require the investment of a foreign airline with a good reputation.

Mar'ie said that the government will tender the sale of the stake among prospective foreign investors. He added that the government is also determining the ceiling of the stake to be offered to foreign parties.

However, he said that the alliance may lead to the sale of a Garuda stake to KLM. (hdj)