KLM denies planning budget airline
      AMSTERDAM, Netherlands - November 18, 1997 10:30 a.m. EST
 (1530 GMT) -- Dutch flag carrier KLM Tuesday dismissed a report
 it was considering following British Airways into the cut-price
 airline market.
      A spokesman said KLM was talking with subsidiaries Martinair,
 Transavia and Air UK about launching new products. "But at this
 moment we are not considering establishing a new company," he told
 Reuters.
      Dutch daily De Telegraaf Tuesday quoted KLM chief executive Leo
 Van Wijk as saying the company was in talks with Martinair and Tran-
 savia about entering the budget market.
     Martinair is a 50-50 freight and passenger joint venture between
 KLM and P&O Nedlloyd. Transavia is a charter airline and is 80 per-
 cent owned by KLM.
     "We are indeed talking about this with all parties involved,
 including P&O Nedlloyd," the paper quoted Van Dijk as saying.
     Charters on their way out
     The KLM spokesman said the new products under consideration were
 competitively priced and geared to the wishes of different markets.
 The airline already offers promotional fares on several European and
 international routes.
     "We want to be as flexible as possible," the spokesman said,
 adding KLM did not feel threatened by British Airways' planned move
 into the budget market. "We have always said we are not afraid of
 competition."
     According to De Telegraaf, Van Wijk thought charters would soon
 be a thing of the past in the airline industry.
     "It is a dated product, an airline politics arrangement from the
 past," he was quoted as saying. "Now that that has disappeared with
 the liberalization (of the market) in Europe, another task division
 is necessary."
     "Low-cost companies, specialized in specific destinations, as
 an extension of KLM will now become the way forward."
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