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Air Niugini & Airlines PNG merger approved

APNG Dash 8 AIRLINES PNG has expressed delight at the Papua New Guinea government’s announcement approving its merger with Air Niugini, the state owned national carrier.

A memorandum of understanding between the three parties will see the establishment of a Merger Implementation Office led by Sir Mekere Morauta, Minister for Public Enterprises.

The Office will establish a transaction structure and implementation timeline.

Airlines PNG says the merger is expected to bring great opportunities and it has immediate plans to extend routes into a range of rural areas not presently well served.

The merger will enable the combined airline, which will operate one of the largest fleets in the South Pacific, to better cover an extensive range of international and domestic destinations.

A larger, stronger national carrier is also expected to provide increased employment opportunities for PNG staff.

The merger is subject to the approval of Airlines PNG shareholders and approval of the final transaction by the government, together with corporate, regulatory and third party approvals.

Spotter: Peter Kranz


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Colin Huggins

Leonard - You can be assured of one thing - this will go from bad to worse with internal airfare pricing. It is a case of "stuff you", and where will the so-called extra revenue come from?

For PNG'ian travellers - answer NO. Tourism - NO. Corporate bodies - maybe YES. Government members and bureaucrats - do they pay?

Just look at how Vanuatu is doing - brilliantly. As for the 300 extra overseas landings - well? The major airlines of the world in code-sharing couldn't match this.

Just see who is behind all this nonsense - someone is making you look like fools. Utterly ridiculous. Good luck with finding out.

Peter Kranz

On the other hand, Airlines PNG was not profitable and Air Niugini had to be heavily subsidised by the government. Better to have one viable airline than two that might fail.

But there are many questions such as APNG being a private company... What are the terms of the merger? And who stands to benefit? What will the public stake be in the new airline?

And what about air infrastructure and safety (e.g., I believe Kundiawa airstrip is still closed because no one could be bothered to fix the perimeter fence and keep the runway clear)?

What is happening about the investigation into the Kokoda crash?

I think air safety regulations and enforcement are more important than having a national airline.

Maybe it's too early yet to draw conclusions.

Leonard Roka

The national government is doing bad for us, the poor people, by denying us the freedom to select the best services.

Competition is a must in PNG where the cost of living is sky-rocketing.

By not providing us with a conducive environment to earn money, where does Waigani thinks we will get the money to pay for the cost of travel put forward by its airline monopoly?

The PNG government is absolutely irresponsible.

Basil Peutalo

Could the new airline service, being born of such controversial circumstances, be the reason for this merger?

Now excellent competition has been eliminated and wider coverage of this new merger would mean more paying passengers at higher fares.

Joe Wasia

Why does Sir Mek allow these things to occur in state owned entities like PNG Power, which is providing inefficient services to the people, and BSP, which has been a monopoly for many years.

I thank the former government for allowing Digicel to enter competition in the telecommunication industry in PNG. Now people are enjoying the service. When competition is higher prices gets lower.

Colin Huggins

Daniel and Poyap - This is indeed sad news. You can be assured that as a result there will be a merger of ground staff and redundancies will occur.

You can also be assured that fares will not be lowered, probably will rise with no competition - both airlines presently fly the POM/BNE route.

The only ones really to benefit are the shareholders.

Reginald Renagi

The merger may be good for our International routes in the Pacific where the new flag carrier will go from servicing some 30 airports to over 300.

This will mean more employment opportunities for our people.

But I doubt the domestic benefits for several reasons. Before the merger the national flag carrier Air Niugini gets the government to bail it out now and then to keep it flying.

Overall it tries to improve its international flights expenses at the cost of the domestic flying public.

For many years now, our domestic airfares are among some of the highest in the world for a small developing country; and in-flight service leaves a lot to be desired.

Airlines PNG provided some competition to Air Niugini as by coming up with some low airfares in the early stages.

But other existing operational overheads in the long run still made it difficult for the airline to sustain itself on a cost-effective basis for a long time for the public.

The new merger would mean the continual survival of Airlines PNG but in another form.

Air Niuginin will not be called that anymore. I think the new airline will be called 'Airlines of the Pacific'.

I do not think this new merger will in fact not further reduce our domestic airfares much. In fact it will get worse.

What PNG needs now is a new "Open Skies" policy where we have other airlines company competing with each other.

The benefit will be cheaper domestic airfares and may also force International airfares down as well.

Phil Fitzpatrick

This is a bit curious because Airlines PNG has a share deal with Virgin, and Air Niugini has a similar deal with Qantas. If they merge where will that leave Virgin?

I agree that it is a bad move for commuters. Hopefully the shareholders show a bit of community spirit and knock it back (probably unlikely?).

Daniel Doyle

APNG gave PX the competition that was so desperately needed on the POM CNS and BNE routes. It is sad to learn of its possible merger with PX.

Poyap J Rooney

Airlines PNG as a separate entity brought much needed competitition to the airline industry in PNG.

It was a delight to see much lower fares, especially between Cairns and POM.

I wonder if these lower fares, offered by APNG, will stay now that they are merging with Air Niugini.

Some people are obviously standing to benefit immensely while others, the public, may once again get the short end of the stick.

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