Air Niugini is looking to expand its services to other Melanesian countries from 2015, and possibly China in coming years. The plans follow the launch of its new low-cost domestic subsidiary, Link PNG, which has implications for other state-owned enterprises.
Air Niugini’s chairman Sir Frederick Reiher made the announcement of more international flights, as he handed over a K100,000 sponsorship cheque for the Melanesian Spearhead Group Trade and Investment Roadshow and Fair, (which will be held later this week).
‘We are looking forward to the delivery of a Fokker 70 aircraft in the new year which will help Air Niugini to initially expand its services to Fiji, Vanuatu and other Melanesian countries in the future,” he said.
Prime Minister Peter O’Neill has also revealed he discussed an air service agreement to allow direct flights by Air Niugini to Beijing, during talks with China’s President Xi Jinpingin Fiji last weekend.
This is to encourage more Chinese tourists visit PNG, O’Neill said.
Air Link launch
The launch this month of Link PNG sees the first stage of a radical restructuring of the airline, which has implications for other state-owned enterprises (SOEs).
The subsidiary has been created as Air Niugini prepares to move to a new ownership structure that will invite a 50 per cent private-sector shareholding, with the Government retaining the other 50 per cent.
Link PNG will operate as a low-cost carrier, principally serving provincial areas, and will involve all of Air Niugini’s Dash 8 fleet operations.
‘The carrier will also serve PNG routes on a community service obligation, ensuring that not only are remote and less-profitable services maintained, but progressively expand to meet the growing transport needs of the nation and its people,’ Sir Frederick said.
‘Air Niugini will provide to Link PNG technical, engineering, and other professional and administrative support including HR, financial, and IT and reservations systems.’
Air Niugini is also providing a K20 million interest-free loan for as long as is necessary.
Lesson for other SOEs
Independent Public Business Corporation (IPBC) chairman, Paul Nerau, described Link PNG as a ‘milestone’ for the country.
He said this was part of Air Niugini’s community service obligation to the country.
‘To give that service, we need to make money somewhere, to provide a service,’ he said.
‘This is very important for us as SOEs.
‘Bringing in private investments is the next chapter for Air Niugini through divestment of shareholding in Air Niugini, inviting our own Papua New Guineans to take part.
‘This decision to do the restructure sets the blueprint for other SOEs to also look at-breaking down what I call the ‘sleeping giants’ of SOEs, so that we can see where we can improve, where we can sell off, so that we increase the business of SOEs.’
Link PNG CEO, Daniel Wanma, said Link PNG would continue the current provincial services provided by Air Niugini but in the long term plans to grow.
‘Our objective is to look at second airports in each province, out in the districts,’ he said.
“For example in Sandaun (West Sepik) province, we’re looking at Telefomin as a potential starter, we’re also looking at Hayfield in East Sepik, and there are a few more airports including Kiriwina (Milne Bay).’
Captain Wanma said Link PNG was starting off with seven aircraft, 145 staff, of whom 105 are pilots and cabin crew, and an administrative staff of about 40.