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)