Garuda to cooperate with Dutch airline
JAKARTA (JP): The national flag carrier Garuda Indonesia, which plans to sell part of its shares to a foreign party through direct placement, has signed an agreement with Royal Dutch Airlines KLM of the Netherlands in order to improve its air services.
Garuda's director for commercial affairs, Kussuyono, said here Monday that the agreement was signed by Garuda's director for general affairs Supandi and KLM's president Pieter Bouw in Amsterdam on Dec. 15 in a ceremony attended by Minister of Transportation Haryanto Dhanutirto.
Kussuyono said that the air cooperation deal was part of Garuda's new policy to set up alliances with foreign airliners as a means of developing and improving its services and management.
"But so far we have not discussed details of the cooperation. All items of the deal, including the planned stake to be offered, will be negotiated in our meetings with KLM's executives next year," Kussuyono was quoted yesterday by Kompas daily.
He said that his company chose KLM for one of its partners due to their long-standing cooperation with Garuda in serving some of its European flight routes.
Garuda and KLM have also made a deal to open new non-stop flights from Surabaya in East Java to Amsterdam.
Networks
Kussuyono said that with the new cooperation, Garuda will be able to tap KLM's existing flight networks linking Africa and some European countries. "Garuda even has an option to use flight networks owned by KLM's alliance, Northwest of the United States, which serves almost every region in the world, including America, Australia, Europe and Asia.
The government has officially announced its plan to sell some of Garuda's stake to foreign investors to help the company realign both its management and financial structure, thereby enabling it to offer common shares on the domestic and international capital markets.
Minister of Finance Mar'ie Muhammad early this month told members of the Budgetary Commission of the House of Representatives (DPR) that Garuda's privatization plan, which has been approved by President Soeharto, will require the investment of foreign airlines with good reputations.
Mar'ie said that the government will tender the sale of the stake among prospective foreign investors. He added the government is also determining the ceiling of the stake to be offered to foreign parties.
The privatization plan for the 45 year old airline was also a result of its poor financial performance over the past years. The Government Audit Agency (BPKP) qualified Garuda's financial performance as unhealthy last year. Based on its profitability, liquidity and solvability, the airline was regarded as less healthy in 1989, 1991 and 1992, but it was very healthy in 1990. (fhp)