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Nam Air is an Indonesian full-service carrier operated by Sriwijaya Air. The carrier provides domestic passenger services from its hub at Jakarta's Soekarno-Hatta International Airport. Nam Air utilises Boeing 737-500 aircraft leased from Sriwijaya Air.
Location of Nam Air main hub (Jakarta Soekarno-Hatta International Airport)
5 total articles
The Indonesian airline group Sriwijaya is planning further expansion in 2016, with a focus on regional growth using its Nam Air subsidiary. Sriwijaya will take several additional Boeing 737-800s in 2016 enabling it to transfer smaller 737-500s to Nam which will be used to open new secondary bases and compete against the expanding regional operations of Garuda and Lion.
Privately owned Sriwijaya has emerged as Indonesia’s third largest airline group, well behind Garuda and Lion but ahead of AirAsia. Surviving an extended period of consolidation and challenging market conditions has strengthened Sriwijaya, leading to a brighter outlook.
Sriwijaya has been profitable for the last two years and is confident that it can stay in the black and maintain its current position in the market. However, it will always face the risk of being squeezed out by Garuda and Lion.
Indonesia’s third largest airline group, Sriwijaya, is planning to resume expansion in 2015 as conditions improve in Indonesia’s domestic market. Sriwijaya plans to add four 737-800s in 2015 and is close to placing an order for up to 30 new turboprops which will be operated by its regional subsidiary Nam Air.
Sriwijaya adopted a dual-brand strategy in 2013 with Nam being used as a full-service regional carrier. At about the same time Sriwijaya tried to move up market by introducing a business class.
But Nam has not expanded since launching in late 2013 while Sriwijaya shrunk in 2014. Sriwijaya is now again adjusting its strategy by removing business class.
Competition in Indonesia’s dynamic domestic market has increased another notch with the launch of Sriwijaya full-service subsidiary Nam Air. Sriwijaya, Indonesia’s third largest airline group after Lion and Garuda, is using Nam to expand its presence in the fast-growing regional market.
Nam Air commenced operations on 10-Dec-2013 and is currently operating one daily Boeing 737-500 flight between Jakarta and Pangkal Pinang, a trunk route also served by Lion, Garuda and Sriwijaya. Six more domestic routes are planned as part of Nam’s initial phase, including five routes connecting secondary markets which are new to the Sriwijaya group. Four of these routes are currently not served by Lion or Garuda.
Sriwijaya could have used Nam to enter the budget end of the market, which has accounted for most of the recent growth in Indonesia but has become fiercely competitive. The group has instead positioned Nam as a full-service carrier with a similar product to Sriwijaya Air but a different network strategy, targeting point-to-point markets which are relatively thin but are underserved and have big potential.
Lion Air Group new full-service subsidiary Batik Air is planning further expansion as it starts to focus on longer routes, including international services.
Two medium-haul domestic routes will be added in Dec-2013 as the carrier takes delivery of a fifth and sixth 737-900ER. More domestic and the start of international expansion is expected in 2014 as Batik takes the first batch of A320s from the landmark 234-aircraft deal signed by Lion and Airbus in Mar-2013. In 2015 Batik intends to start operating 787s, supporting further international expansion.
Batik is also preparing to move its base from Jakarta Soekarno-Hatta to closer-in Halim Airport, which Indonesian authorities are opening up for commercial jet services in a bid to relieve congestion at Soekarno-Hatta. Halim will provide further differentiation and product segmentation for Batik as the main Lion brand will focus on operating aircraft in single-class configuration from Soekarno-Hatta.
Sriwijaya Air is seeking to renew its fleet, expand its network and launch a new full-service subsidiary in a bid to maintain its position as the third largest airline in Indonesia’s fast-growing market. The low-profile airline group, which is already one of the 30 largest in Asia, has big ambitions to expand domestically and to a lesser extent internationally with new Boeing 737-800s and Embraer E190s in two-class configuration. But the group plans to stay away from the faster-growing Indonesian budget airline sector and, in a rather odd strategy, have two full-service brands with one positioned at the premium end and one in the middle.
Sriwijaya risks getting squeezed out as much larger Lion and Garuda pursue rapid expansion in both the budget and full-service sectors while the Indonesian affiliates of AirAsia and Tiger grow rapidly at the low end of the market. But within Indonesia’s large group of second tier full-service carriers, Sriwijaya has the strongest position and stands to benefit in the likely event of consolidation.