QF into Adam Air (Indo)

[Chocks Away]

Qantas is considering acquiring a share of Indonesian budget carrier Adam Air to strengthen its position in the high-growth Southeast Asia market. Adam Air CEO Gunawan Suherman confirmed that Qantas CEO Geoff Dixon and CFO Peter Gregg were in Jakarta last Friday to discuss the acquisition of 20%-30% of the operation. According to Gunawan, Qantas is planning to establish Jakarta as a second Asian hub after Singapore. Adam Air began flying in December 2002 with 737s and currently operates 20 aircraft to 39 destinations, including Malaysia and Singapore. The privately owned LCC has flagged ambitions to triple its fleet over the next three years to 50 aircraft. Qantas already owns 49% of Singapore-based LCC Jetstar Asia. Under Indonesian law, foreign carriers may buy up to 49% of domestic airlines.

ATW
8/2/06


Indonesia just announced a 20 year age limit maximum, on it's ageing jet fleets also... don't want to get caught with an old fleet (not sure what a/c orders Adam has to come).

[Ron & Edna Johns]

Qantas gets green light to buy Adam Air's shares

Business and Investment - February 06, 2006

The Jakarta Post, Jakarta

Qantas Airline, one of major airlines in the Asia Pacific, appears unlikely to face any problem in acquiring a 20 percent stake in growing local airline company Adam Air.

Minister of Transportation Hatta Rajasa said Saturday that the government welcomed the Australian airline's plan to buy a part of the locally owned Adam Air.

He, however, warned that the acquisition of Adam Air's shares should be in line with the Cabotage law in which a foreign airline should be allowed only to buy up to 49 percent in a local airline company.

"There will no problem for Qantas to buy Adam's shares and become its strategic partner as long as it complies with the existing regulation," the minister was quoted as saying by Antara.

He said that under the Cabotage law, foreign airlines were not allowed to become a majority shareholder in a local airline company. "They may only own up to 49 percent of the shares," he added.

Adam Air said Friday it would sell 20 percent of its shares to Qantas. "The Australian company actually offered to buy 30 percent of the shares but we are only prepared to sell 20 percent because another 20 percent will be sold during Adam Air's initial public offering (IPO) in Singapore next year," Adam Air's chief executive officer Gunawan Suherman said Friday.

Qantas CEO Geoff Dixon visited Soekarno Hatta International Airport Friday to take a look at Adam Air's operations. He said Qantas was very much attracted to Indonesia's airline industry whose growth last year was predicted to reach more than 10 percent.

Minister Hatta Rajasa said more foreign airlines would likely enter the domestic airline industry in partnership with local airline operators within the next few years to take the advantage of the growing market in the country.

He said the entry of the foreign airlines was also needed to help local players compete globally.

Meanwhile, the Indonesian National Air Carriers Association (INACA) has demanded that the government enforce the Cabotage law, fearing that foreign airlines would damage the nation's airline industry.

According to international law on air traffic as stated under Article 1 of the Chicago Convention 1944, every country has the exclusive right to control air traffic within its control. This restriction is more popularly called Cabotage.

[soldier of fortune]

what to the hell is going on with qf.
1. why would any one invest in the airline industry in indonesia.
2. the country is nothing but graft and corruption.
3. their track record in safety is nothing short of appaling

hey you might as well throw money down the toilet-
is jq asia a complete failure.
why can't they tie up with air asia

[qcc2]

darth dixon can see low labour costs, easy access from indonesia to all other asian countries. then down the track the next darth wants to tie up various airline cheapies (all geoffstars )to get volume.he got to hurry up his contract is running out.

[LightweightAC]

is jq asia a complete failure.
why can't they tie up with air asia Hi everyone! A newbie here.
The last time i heard of JQ Asia, it couldn't gain entry into many major airports in Asia, particularly those in China. Losing the market share in the region, it started to lose interest as well. Don't know what's it up to at the moment, though...

[Ndicho Moja]

The relevant authorities in Indonesia have been very public with regard to LCCs and protecting the 'home' market/players. As a result J* Asia have not been able to gain access rights into Indonesia. However, OrangeStar, J*Asia's parent company do have access through a susidiary, ValuAir. With regard to China, I would hazard a guess that the dollars/passenger numbers would not 'stack up', so they elected to stay out or quit until the market conditions improve. The Chinese cities that could be of interest are a long way from Singapore.

With ragrd to Air Asia,and if the stories are true, they do not need another partner and doing OK on their own.

Just a guess.

[planemad2]

Might be buying into it as another place, closer to home, to get their heavy maintenance done cheaply. :rolleyes:

[Keg]

One of the guys on Qrewroom posted a link to a SMH article here (http://www.smh.com.au/news/world/plane-flies-without-navigation-equipment/2006/02/12/1139679470872.html)! :eek:

A plane carrying 145 passengers flew for hours without navigation and communications systems over Indonesia before making a safe emergency landing, reports said today.

The systems on the Boeing 737-300 of Indonesian regional airline Adam Air broke down 20 minutes after take-off from Jakarta's international airport at 6.20am (1020 AEDT) yesterday, the Kompass newspaper reported.

The pilot flew the plane, which also had seven crew, without knowing where he was going for about four hours over the main island of Java after discovering the problem.

The pilot decided to make an emergency landing at 10.45am (1445 AEDT) after sighting a runway on the eastern island of Sumba which was only 1800 metres long, the paper said quoting aircraft crew.

Boeing 737-300s usually need at least 2200 metres to land and take-off.
No-one onboard the plane, which had been bound for the South Sulawesi province capital of Makassar, was injured.

Passengers were not told of the problems during the flight, Kompass said, although many suspected something was wrong as the plane kept changing altitudes.

"How would we not be worried after hours of going around and no announcement from the stewardesses or the pilot about what was happening," passenger Made Aming said.

"We only knew that the airplane continued to go around sometimes at high altitude, sometimes it was going to descend but then it would climb up again," Aming said.

He described the landing as like being in "a speeding car when one of the tyres suddenly bursts".

"We are lucky the brakes were good because after we stepped out, the airport turned out to be small and not the type for large aircraft like ours to land."

Passengers were later flown to Makassar after planes were sent to the area from West Timor's airport.

An investigation into the incident has been launched and the government will demand a report from both Adam Air and Boeing, the newspaper quoted a transport official as saying.

Adam Air's management could not be reached for comment today.

AFP

[LewC]

According to a report in the Sydney Morning Herald today Messrs. Dixon and Gregg also held talks with Garuda and speculates that as Garuda is desperate for outside management expertise and capital to help it compete with low-cost rivals such as AdamAir,an alliance with QANTAS might be on,allowing QANTAS access to a growing aviation market and providing QANTAS and Jet* with a potential maintainance base for short haul 737's and A320's

[ANDRE25i]

It's alright Qf gets increasing market share and expands slightly; as long as it doesn't influence safety and maintenance of both carriers in a negative way.
On another note, hope Singapore Airlines doesn't get the right to fly across the pacific to the US from Aus. Hopefully they'll have to wait for a very protracted period of time. Unless qf gets something back with equally as much worth........... have no option but to periodically cease proceedings.
I'm much more in favour of there being a Virgin subsidiary, derived from vb or virgin atlantic, flying across. There's more benefit from my perspective.
Hopefully in the meantime, qf will expands its market share in asia, and china particularly, considering there the growing economy.
I'd never much liked the idea of Australian Airlines, I much prefer the potential prosects offered by J* international/Asia....