KLM, MAS set to enter partnership

KLM, MAS set to enter partnership

AMSTERDAM (Reuters): KLM Royal Dutch Airlines said yesterday
it expected to reach a code-sharing agreement soon with Malaysia
Airlines.

The deal would be another link in KLM's Asia-Pacific chain,
increasing its destinations in Australia and would offer Malaysia
Airlines an opening to more European cities.

It would also open the prospect of Malaysian Airlines joining
KLM's partnerships with Northwest Airlines and Alitalia.

The two airlines signed a memorandum of understanding in
December and will study code-sharing opportunities with a view to
concluding a detailed agreement this spring. Code-sharing enables
airlines to sell seats on each other's flights.

Initially at least, the agreement would not cover all routes
operated by the airlines.

The two carriers intend to code-share on all their services
between Amsterdam and Kuala Lumpur. In addition, KLM said it had
expressed an interest in code-sharing on services operated by
Malaysia Airlines between Kuala Lumpur and a number of Australian
destinations, while the Malaysian carrier had said it wished to
code-share on KLM's services between Amsterdam and other European
cities.

The two airlines, which have operated joint cargo services
since mid-1996, may also cooperate in ground handling, loyalty
programs, marketing and sales.

The deal would not be the first involvement of KLM in Asia,
but would be its first code-sharing deal there. In October, KLM
reached agreement with Japan's third-ranked airline Japan Air
System to cooperate in marketing, airport and flight operations.
KLM also has ties with Indonesia's Garuda Airlines.

In December, KLM managing director Leo van Wijk said the
company's priority in 1998 would be to find an Asian partner,
although yesterday a KLM spokeswoman said the company was not
looking for a single Asian carrier.