Posted 14 February 2007 @ 02:14
Updated 14 February 2007 @ 02:18
JAKARTA, 14 February 2007 - Adam Skyconnection Airlines said the Jan. 1 crash of one of its aircraft will not affect expansion plans as the Indonesian budget carrier will pursue adding 60 planes within five years and searching for a strategic investor. The airline also plans to lease 10 Boeing 737 planes this year, bringing its total fleet to 32, according to the company's president director, Adam Suherman, whose family owns the Jakarta- based carrier.
Adam Air is seeking to renew its fleet after the plane crash over Sulawesi dealt a blow to its safety reputation. Expanding the fleet allows Adam Air to tap rising travel demand in Asia's third-most populous nation where a government ban on overseas-based discount carriers means the airline is shielded from at least 17 other budget rivals in the region.
"The industry is clearly growing and the low-cost model is very well-suited," Damien Horth, an analyst at UBS Securities Asia in Hong Kong, said in a telephone interview Friday. Indonesia "has impressive demand growth," he said. Domestic passenger volume has grown by an average of more than 25 percent since 1999, according to data from the Indonesian National Air Carriers Association. About 34 million people traveled by air in Indonesia last year compared with 28.9 million in 2005, the data showed.
An Adam Air Boeing 737-400 disappeared on its way to Manado in North Sulawesi from Surabaya in East Java, prompting a nearly monthlong search that has yielded only small amounts of debris. Officials estimate the plane plunged into the ocean off South Sulawesi, killing its 96 passengers and six crew members as it sank to a depth of over 1,000 meters, or nearly 3,300 feet.
"The accident hasn't affected our business," Suherman said in an interview last week. Adam Air is replacing its fleet because "we want to maintain the age of our planes," he said. Adam Air said in February last year it had taken the first step in its five-year buildup for a 60-plane fleet by leasing six Airbus A320 planes and buying another 24 to replace its 10 year-old Boeing planes. For the other 30 planes, it might use Boeing 737-800 or 737-900 jets, Suherman said.
The airline has yet to decide on which model to acquire for the remaining 30 planes, Suherman said in the interview. Adam Air is also still looking for strategic investors and has been in talks with several, Suherman said, without identifying them. Investors must understand "the Indonesian local culture" and bring added value to the airline, he said.
Qantas Airways, Australia's largest airline, said on Jan. 23 that it had no plans to restart talks with Adam Air for an investment or alliance. The International Herald Tribune reported on Jan. 30 that Adam Air had safety issues before the accident, citing complaints by pilots alleging low maintenance standards. Suherman said the airline has tight safety requirements and planes leased from GE Capital Aviation Services have been inspected at random.
Adam Air has also been in contact with the salvage companies Smit Internationale and Phoenix International to recover the flight data recorder of its missing plane from the ocean, Suherman said.
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