Adam Air may soon halt all flights

The Jakarta Post ,  Jakarta   |  Tue, 03/18/2008 1:16 AM  |  Headlines

Budget carrier PT Adam Skyconnection Airlines (Adam Air) announced Monday it was scaling down operations and might stop all flights this Friday until further notice, due to its inability to settle insurance payments.

In a statement made available to The Jakarta Post, the airline said the insurance payments were due March 20 and no agreement had been reached on the issue.

The airline has reduced its flights since Monday, currently serving passengers traveling between Jakarta and a number of major cities only; Medan in North Sumatra, Padang in West Sumatra, Denpasar in Bali, Surabaya in East Java and Bengkulu; with 11 planes.

Normally, the company serves 21 destinations per day using a total of 22 planes.

This comes just days after two shareholders pulled out of the company amid an internal rift, which included an allegation of the misuse of company funds totaling Rp 2.1 trillion.

The two shareholders are Global Transport Service (GTS), a subsidiary of PT Bhakti Investama, which owns 19 percent of Adam Air, and the Bright Star Perkasa business consortium, which holds a 31 percent stake.

The allegation of misuse of funds was made by the shareholders' legal adviser, Hotman Paris Hutapea. Adam Air has flatly denied the accusation, saying the two shareholders knew all along about the company's financial condition.

The Suherman family, including Adam Air president director Adam Suherman, and Sandra Ang own a 50 percent stake in the airline.

Adam said the airline had yet to receive any legal notification that the shareholders had pulled out of Adam Air.

The rift with shareholders has led to the company scaling down operations, forcing the government to step in and facilitate negotiations.

A meeting was held between the airline and shareholders on Monday, facilitated by the Transportation Ministry's director general for air transportation, according to J.A. Barata, spokesman for the National Committee for Transportation Safety.

"Adam Air's planes can't fly because the investors (shareholders) can't settle their differences over investment problems. Meanwhile, insurance is mandatory for every flight," Barata said, in explaining the reasons behind the company's decision to scale down operations.

The airline's decision prior to a long national holiday later this week has left thousands of ticket-holders in the lurch.

In Yogyakarta, hundreds of customers and travel agents gathered at Adam Air's office on Jl. Diponegoro seeking refunds.

"Right now, I'm more worried about how I can get to Jakarta on the 20th," said Dewi after receiving a full refund for her ticket. (Photo on P. 13) (lva)

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Good Riddance (not verified) — Tue, 03/18/2008 - 6:12pm

Couldn't agree more with Conundrum. The only reason this reckless firm continues to operate with impunity despite endless string of mishaps is the classic case of knowing the right people in power, this time personified by Mr Agung Laksono.
In the name of profit, it had forsaken public safety. All I can say is good riddance. I hope this is a wake up call for Indonesia's young budget airline industry.

LInda (not verified) — Tue, 03/18/2008 - 5:37pm

This has been overdue, i am appaled with how long it took for the government to finally put a gun on Adam Air's chest.

Their disrespect to safety, passengers and their employees is almost a disgust an the arrogance in public appearances makes one sick.

There has not been a single heartfelt public apology by the "Adams Family" for the families of the vistims of the Boeing which crashed in January 2007 and it looks like they had tried everything to avoid the Data Recorders to be recovered and finally analysed.

KNKT where is the report ???

Indonesian skies will hopefully be safer without the orange factor

Conundrum — Tue, 03/18/2008 - 9:56am

Of cos it should halt it's operations, or should have been halted. The cavalier way in which the company reacts to all it's catastrophies leaves much to be desired. Now, they are halting their services for the wrong reasons, being unable to pay for insurance. Wouldn't it be better for reasons of incapability to run an airline safe enough for us to fly with. If anyone is just thinking of just money, money and more money, please don't go into any business that would endanger the lives of the public if dedication and sense of responsibility are the least of your concerns. Adam Air is run by a kid for crying out loud. Like doctors and hospital owners, public land transportation operators who can't even (or should I say won't) maintain their vehicles properly due to greed for money, money and more money, for the safety of those they profit from, only does so at their own peril. For the private airline owners whose only reasons are for self pride of being an 'airline owner' and nothing else, please don't get rich and arrogant at our (the public's) expense. If you do, where's the pride in that?

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