Adam Air

Adam Air was a Jakarta-based Indonesian carrier that began flying in December 2003 and grew quickly on cheap fares with meals. After the loss of Flight 574 in January 2007, safety concerns, lost investors and lease defaults followed, and its operating certificate was revoked on 18 June 2008.

How it started

Adam Air, incorporated as PT Adam SkyConnection Airlines, was established in 2002. According to Wikipedia, it was founded by Agung Laksono, later Speaker of Indonesia's House of Representatives, and Sandra Ang, whose family owned the airline. That founding detail carries a "citation needed" tag there. The airline was named after Ang's son, Adam Suherman, who became chief executive aged 26 after suggesting the family start an airline following his studies in the United States.

Operations began on 19 December 2003 with two Boeing 737-400s leased from GE Commercial Aviation Services. The first flights ran from Jakarta to Medan and Denpasar, according to the same source. Simple Flying confirms the start date and the two leased aircraft.

The heyday

Adam Air was based at Soekarno-Hatta International Airport in Jakarta, with Medan and Surabaya as focus cities. It flew to more than 20 Indonesian cities and internationally to Penang and Singapore. It positioned itself between low-cost and full-service flying, offering low fares and an on-board meal, a model similar to Singapore's Valuair. Aviation consultant Gerry Soejatman credited its success to a "fresh image", meaning its bright livery and uniforms. Before Flight 574 it was the fastest-growing low-cost carrier in Indonesia.

Foreign investors took notice. Wikipedia lists talks over a 20% stake for Qantas, a takeover bid from Texas Pacific Group and a planned Singapore share listing. The fleet was all Boeing 737s, mostly older Classic and -200 models, with one Airbus A300-600 leased briefly in 2005. A CEO quote from March 2008 mentions 22 aircraft.

What went wrong

• Safety reputation. Soejatman posted a public warning in August 2006 about poor maintenance. In February 2006, Flight 782 lost its navigation systems and landed on Sumba, about 481 km from its intended destination. Pilots later told the Associated Press they were pressed to break regulations, as Wikipedia reports.
• Flight 574. On 1 January 2007 the aircraft crashed into the Makassar Strait, killing all 102 people on board. The investigation found that the pilots were preoccupied with the inertial navigation system and lost control of the aircraft. Foreign investment interest evaporated.
• Regulatory pressure. In March 2007 Adam Air was named among seven airlines that risked losing their licences within three months. By June 2007 it had been moved up to the middle safety tier and escaped closure. Pilots resigned in May 2007 over poor navigation systems, and the airline sued them.
• Investors leave, leases default. PT Bhakti Investama and a partner, together holding 50%, announced they would sell their shares back to the founders. On 16 March 2008 the government gave the airline 21 days to decide whether to close. The next day Suherman said 12 of its 22 aircraft had been declared in default.

The last flight

The date and route of the final passenger flight are not documented in the sources found. After a 737 skidded off the runway at Batam, the government suspended the air operator certificate on 18 March 2008 and gave the airline three months to show improvements. Wikipedia says the certificate was revoked on 18 June 2008, ending the airline. Its infobox gives March 2008 for the end of flight operations and 18 June 2008 for liquidation.

What happened next

By the end of 2008 almost all of the fleet had gone back to the lessors. One 737-200 stayed behind and was scrapped in Bandung three years later. At closure, 30 Airbus A320s were on order. No successor airline took over the brand or routes.

The finances were examined afterwards. Wikipedia reports allegations that Sandra Ang embezzled company funds, with losses reported at Rp 2.1 trillion (about US$210 million). Police named her a suspect on 12 August 2008, and she was reportedly arrested and barred from leaving the country.

Sources: Wikipedia: Adam Air, Simple Flying: What Happened To Indonesian Carrier Adam Air?