Aviation
PNG's Air Niugini Back on Track
With debts cleared, airline in good shape
Air Niugini is prepared to launch a scheduled weekly service to Tokyo from April 20, using its Airbus A310 wide-bodied jet. Chief Executive, Peter Roberts reckons that based on past experiences with seasonal charter flights the service should do well.
And Papua New Guinea¹s customer-starved tourist industry hopes the service will bring 6000 or more Japanese tourists to a country with war, cultural, scenic and natural history attractions that have a powerful draw for them.
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In April, the airline hopes to open a twice-weekly service between Port Moresby and Nadi, Fiji, via Honiara and Port Vila, in collaboration with Air Pacific, Air Vanuatu and Solomon Airlines.
The 70-seater Air Niugini Fokker 28 jet to be used would be much cheaper to run than the heavier Boeing 737s used by the other airlines.
Floundering deep in multi-million dollar losses three years ago, the government-owned Air Niugini, according to Roberts, is steadily recovering from debt, management and operational stresses. It has been put in shape for eventual privatisation when the time is right.
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Government's attempts to sell 49 percent of it foundered in 1998/99 when such potential buyers as Qantas decided that Papua New Guinea's political and economic troubles, plus the airline¹s own difficulties, made such an investment too risky.
International concern about Papua New Guinea's outlook continues to deepen. But government policy hasn't changed, Roberts says. "They've just found a buyer for the PNG Banking Corporation. Banks come together more readily than airlines, I suppose.
"I believe we should be prepared for privatisation, and the process has been quite helpful because everything is up-to-date. I can give you audited balance sheets for last year and you will get a timely one this year.
"In a legal and financial sense, the airline is in good shape. We know where we are. Operationally, there are quite a number of things we are doing to get to best practice.
"How we fly the aeroplanes is fine, as it always has been. The compliance changes going on in the airline world we have to address, and we are."
Roberts is an Australian aviation consultant who was a guiding hand in the redevelopment of Air Vanuatu, where he was chief executive, and the reorganisation of Air Nauru.
In September 2000, he was hired by the Papua New Guinea airline to replace a former bureaucrat the board felt it couldn't work with.
Roberts brought in some retired Qantas hands to help resolve technical and other deficiencies.
"There is probably more trimming we can do and the board has asked, and management has agreed to cut about 15 million Kina in costs out of the 2002 year's budget. I think we can do that."
The airline wants to trim its staff of 1500 and is choosing between redundancy plans or voluntary departure. An important booster for it came last year when it was agreed that Qantas should withdraw its own aircraft from the highly profitable Brisbane/Sydney/Port Moresby route and take seats aboard Air Niugini's A310 Airbus
"That's been a great help because in dealing with bankers it's a bit like developing a shopping centre. Your first tenant gives you a level of credibility," Roberts says.
"It is probably a little early to see the pattern we are going to see. But the Airbus is operating nearly 13 hours a day which is probably what Qantas would do for the same sort of aeroplane.
"It operates twice weekly to Singapore where it is maintained, weekly to Manila and to Brisbane and Sydney. Fokker 28 jets run domestically and to Cairns and weekly to Honiara."
Internationally, Roberts says, "the Singapore operation makes money. We have good connecting flights on to Europe and also back to Honiara.
"Manila is working for us. There is quite a community of Filipinos in Papua New Guinea and business interests bet-ween the two countries. We have strengthened the route by a schedule that gives us a sixth freedom opportunity to Australia. We now sell Brisbane/Manila and we sell Cairns/Manila with connecting flights, and we carry a useful number of people every week through from Australia."
The economics of the new Tokyo service is primarily business traffic.
"There is a lot of cargo to be carried. We have been carrying tuna out of Papua New Guinea as a growth industry. We take up to 15 tons on every Airbus flight out of Port Moresby, down to Brisbane and Singapore, up to Manila.
"There is a lot of optimism about it. But it is still seasonal and has to be treated with a certain amount of caution."
The airline has just bought two later model Fokker 28s from an Australian airline and will retire a couple of its older ones.
The Fokker 28s will remain in service for at least another five years, he says. "There are some things we do for them that we really don't know what we would do with an alternative aircraft; going into the Highlands with that size aeroplane and cargo capacity."
