Sriwijaya attempts to maintain its position as Indonesia’s third largest airline as market explodes

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.