Indonesia closes low-cost airline

updated 2:05 p.m. ET March 18, 2008

JAKARTA, Indonesia - Indonesia’s low-cost carrier Adam Air, which has had a string of accidents over the past two years, has been grounded for at least three months over safety concerns, the head of the government’s air transportation agency said Tuesday.

Adam Air began operations in 2003 and at its peak had 22 aircraft that flew across Indonesia and to Singapore and Malaysia. It recently sliced its number of routes from 52 to 12.

Last year, one of its jetliners plunged into the sea from 10,000 feet, killing all 102 people on board. Another plane broke in half on a hard landing, with no reports of serious injury. Last week, a Boeing 737 skidded off a runway, slightly injuring five people.

Budhi Mulyawan Suyitno, director general for air transportation, said the airline would stop flying as of Wednesday. The Transport Ministry had found the airline’s operating and maintenance standards inadequate and training of personnel substandard, he said.

Adam Air’s operating license will initially be suspended for three months, he said, and will be withdrawn for good if there are no improvements by then.

Dozens of airlines emerged after Indonesia deregulated its aviation industry in the 1990s, raising concerns that growth outpaced the supply of trained aviation professionals, regulatory oversight and ground infrastructure.

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