Article: Indonesia's Adam Air mulls stake sale to Qantas

[Yada Yada]

Indonesia's Adam Air mulls stake sale to Qantas
07 February 2006

JAKARTA: Indonesian budget airline Adam Air is considering selling a stake to Australia's Qantas Airways as part of wider alliance talks, a company official said yesterday.

The comment came after local media reported the Indonesian transportation minister saying he would welcome a bid by Qantas to acquire a 20 per cent stake in privately-owned PT Adam SkyConnection Airlines.

"Currently, we are still in talks over co-operation, including the acquisition of some shares," said Dave Fikarno Akbarsyah, Adam Air's chief communication officer.

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[JohnK]

Not sure of the benefits of another LCC in SE Asia for QF.

This would not be serious competition for Jetstar Asia but I thought the idea would be to pour more money into stabilising the Jetstar Asia business rather than purchasing another LCC.

Interesting to see where this deal ends up.

 

[Yada Yada]

Not sure of the benefits of another LCC in SE Asia for QF.

This would not be serious competition for Jetstar Asia but I thought the idea would be to pour more money into stabilising the Jetstar Asia business rather than purchasing another LCC.

Interesting to see where this deal ends up.

Yes, it will be interesting. I saw another report a day or two ago that said QF was talking to GA about a partnership. They are definitely up to something over there!

I also saw a report today that indicated they may launch Jetstar Int'l even sooner than expected.

 

[JohnK]

Not sure if you read these articles in crikey Qantas flying into troubled Indonesian skies and Qantas still looking for flak in Asia.

I don't think the Indonesian government would be making it too easy for them.

 

[Yada Yada]

Not sure if you read these articles in crikey Qantas flying into troubled Indonesian skies and Qantas still looking for flak in Asia.

I hadn't seen those artlices. Thanks JohnK. I found this quote interesting:

A criticism of Qantas management is that none of the top brass have any length of service on the ground overseas – a contributing factor towards the international operation failing to meet its cost of capital and having to rely disproportionately on exploiting the trans-Pacific route.

Ouch!

 

[BlacKnox]

Not sure if you read these articles in crikey Qantas flying into troubled Indonesian skies and Qantas still looking for flak in Asia.

I read something about this in crikey last week. Anyone know what QF is up to? On the surface it doesn't make much sense :? .

 

[Damien]

I read something about this in crikey last week. Anyone know what QF is up to? On the surface it doesn't make much sense :? .

This is one of the joint ventures that Geoff Dixon was talking about in the Sunday interview. My feeling is that it will be domestic only. There are about 250,000,000 million people in Indonesia, so it may be an easy money spinner.

 

[NM]

This is one of the joint ventures that Geoff Dixon was talking about in the Sunday interview. My feeling is that it will be domestic only. There are about 250,000,000 million people in Indonesia, so it may be an easy money spinner.

There may be lots of people, but how many of them can affort to fly at a ticket price that makes money for the shareholders?

 

[Damien]

This is one of the joint ventures that Geoff Dixon was talking about in the Sunday interview. My feeling is that it will be domestic only. There are about 250,000,000 million people in Indonesia, so it may be an easy money spinner.

There may be lots of people, but how many of them can affort to fly at a ticket price that makes money for the shareholders?

Surely their due diligence would have told them whether there is enough potential business to justify going ahead with the proposal.

 

[NM]

Surely their due diligence would have told them whether there is enough potential business to justify going ahead with the proposal.

I am certain they know what they are getting into. My point was that a huge population does not necessarily relate to a huge market. The important thing is how many people have the need/desire and financial ability to travel by air? I still struggle to see how airlines can operate sustainably with the low fares sold by some Asian LCCs. I know they have a low cost base, but they must be very exposed to fixed costs like fuel, maintenance and money.

 

[JohnK]

Not sure if you read these articles in crikey Qantas flying into troubled Indonesian skies and Qantas still looking for flak in Asia.

I read something about this in crikey last week. Anyone know what QF is up to? On the surface it doesn't make much sense :? .

Imo it doesn't make any sense as well. Foreign companies cannot fully own anything in Indonesia. Indonesia is also known for not co-operating with foreign companies. I think the whole deal sounds very dodgy.

QF is contemplating buying a 20%-30% share in an Indonesian LCC. If they couldn't make a profit out of Jetstar Asia what makes people think that they would make a profit out of Adam Air in a nation where more than 50% of people could not afford to have an old beat up motorbike let alone buy an airline ticket.