Jakarta - Indonesian authorities on Tuesday banned cash- strapped budget carrier Adam Air from flying over safety concerns. "The transport ministry has decided to revoke Adam Air's operational specification, effective 12:00 am (1700GMT), March 19," the country's air transportation chief Budhi Muliawan Suyitno told reporters.
"With this, Adam Air is banned from operating its aircraft. All of its planes must be automatically grounded," Suyitno added.
Adam Air president Adam Suherman on Monday said the beleaguered airline has defaulted on debt payments to airplane leasing companies, which has forced the company to ground 12 of its 22 planes.
Also on Monday, Global Transport Service (GTS) and Bright Star Perkasa - which jointly control a 50-per-cent stake in the airline - said they had decided to sell their shares back to the owner, citing financial mismanagement.
GTS director Gustiono Kustianto told a news conference that Adam Air's life expectancy is "less than a month" and that its outstanding debt amounted to 14 million dollars owed to aircraft leasing companies and free capital of just 4.8 million dollars.
Indonesia's airline industry has grown rapidly in the past decade following liberalization, with the launch of new players and a wider choice of routes across the sprawling archipelago.
But the country has suffered a string of airline disasters in recent years, raising concerns about safety standards and prompting the European Union to ban all Indonesian airlines from its airspace.
Adam Air has had a string of accidents in just over a year, including the crash of its jetliner into the sea off the western coast of Sulawesi on New Year's Day 2007 that killed all 102 people on board.
Last week, an Adam Air Boeing 737-400 skidded off a runway on Batam island's airport while landing in heavy rain, injuring five people and badly damaging the aircraft.
