The Dutch government should not delay a decision on a partial privatization of the group which operates Amsterdam's Schiphol airport but it ought to keep a majority stake, an advisory council said on Thursday.

The independent advisory council on transport affairs made the comments in a report prepared for the government, which has been considering a flotation of Schiphol since 1997.

"The council is of the opinion that a partial privatization would allow the airport the sufficient strategic space which is necessary to be able to position itself optimally internationally," the advisers said in a statement.

In July, the government, which owns 75.8 percent of Schiphol Group, said it would float a minority stake to investors at a "financially opportune time", hopefully before the end of its term in early 2007.

"The council thinks that delaying taking a decision about a possible partial privatization would be more damaging than the limited risks which are associated with a partial privatization," the advisers said.

The council noted that the cabinet had not ruled out selling its majority stake but said while partial privatization was desirable the government should keep a majority stake because of the huge importance of the airport for the Dutch economy.

"The importance of Schiphol is too great for the Netherlands to just leave it to the market," the council said.

The group's management has repeatedly called for the state's go-ahead for an initial public offering, seeing a bourse listing as key to its international expansion.

Schiphol's main competitors BAA, which operates London's Heathrow and other airports, and Fraport, which runs Frankfurt Airport, are already listed, while Paris airport operator Aeroports de Paris (ADP) is due for privatization next year.

Schiphol operates three airports in the Netherlands, along with Terminal 4 at John F. Kennedy Airport in New York and Brisbane Airport in Australia. It is also among several parties interested in buying a 70 percent stake in Brussels Zaventem Airport, estimated to be worth as much as EUR500 million (USD$615.5 million).

The cities of Amsterdam and Rotterdam hold 21.8 percent and 2.4 percent of Schiphol respectively.

Some politicians from the ruling coalition have been reluctant to privatize Schiphol, seeking safeguards for public interests such as the effects on employment and environment.

Schiphol reported a net profit of EUR191 million (USD$235.1 million) for 2003 with 40 million passengers passing through its airports. It expects this year's earnings to be slightly lower, but sees the passenger figure rising to 42 million.

(Reuters)