Nov. 10 (Bloomberg) -- PT Adam Skyconnection Airlines, an Indonesia-based low-fare carrier, expects profit will increase about 10 percent next year as it expands its fleet to meet travel demand.

The three year-old airline plans to increase capacity by 35 percent next year by adding 10 leased Boeing Co. 737 aircraft to its fleet, said Adam Air's President Director Adam Suherman in an interview in Singapore today. It forecasts a less than 5 percent growth in profit this year.

Suherman is adding routes and renewing Adam Air's fleet with newer aircraft that burn less fuel, while a government ban on overseas-based discount carriers flying major routes reduce the number of competitors in Indonesia.

The carrier is filling up about 95 percent of seats on its domestic flights, he said. In 2005, 30 million people traveled by air in Indonesia and the government is expecting 33 million this year, Suherman said.

Adam Air is still on course to boost its fleet to 60 aircraft in five years, Suherman said. The airline, which prefers a ``single model'' for its fleet, may decide early next year on its expansion, he said.

Fleet Expansion

In February, Adam Air said it has taken the first step in its five-year buildup for a 60-plane fleet by leasing six A320 planes and buying 24 of the same model to replace its 10 year- Aircraft by Boeing Co. For the 30 other planes, the airline may use Boeing's 737-800 or 737-900. It's also considering using aircraft by Empresa Brasileira de Aeronautica SA.

Adam Air is still assessing planes of the three aircraft manufacturers, Suherman said today.

Boeing's 737-800 aircraft, which can seat as many as 189 passengers, costs as much as $75 million each based on list prices while a 737-900ER fetches for as much as $80.5 million and seats up to 215 passengers in a single-class configuration.

Adam Air currently has 19 Boeing 737 fleet.

Share Sale

Adam Air may still push through with listing its shares in Singapore and Indonesia in 2008, Suherman said. In February, he said the carrier may sell up to 20 percent of the airline to the public and 20 percent to strategic investors.

The company has hired JPMorgan Chase & Co. to advise its stock sale.

``We are preparing for a listing in 2008 but it could be delayed if oil prices are high like today. It would not be appropriate for an airline to list,'' Suherman said.

The airline is also in talks with carriers and financial institutions for a stake sale, Suherman said. Qantas Airways Ltd. said in July it may expand in Indonesia to take advantage of increasing travel demand in Asia's third-most populous nation.

Adam Air has received proposals and is considering selling its stake to a buyer before the share sale, Suherman said.

``We're still investigating the opportunities in Indonesia,'' Qantas Chief Financial Officer Peter Gregg, said on July 26.``Adam Air is a possibility, there's a couple of others up there as well.''

Qantas is looking to bolster earnings and revive its international market share amid increasing competition from global carriers. The company already has an investment in Jetstar Asia, a Singapore-based low-cost carrier.

To contact the reporter on this story: Kyunghee Park in Singapore at kpark3@bloomberg.net.

Last Updated: November 9, 2006 23:07 EST