Sriwijaya Air targets Indonesia regional market with launch of full-service subsidiary Nam Air

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.