Air Niugini privatization OK’d

Port Moresby (Papua New Guinea Post-Courier) – The Papua New Guinea Government has launched the privatization plan for one of its statutory organizations, the national flag carrier Air Niugini.

Prime Minister and Finance Minister Sir Mekere Morauta launched the first phase for privatizing Air Niugini saying, it was the realization of a dream of many governments and for him one with a personal meaning as a long-time supporter and the longest serving director of the airline.

Sir Mekere said the launch now saw PNG “on the doorstep of a new age in the way it conducts its business”. 

He said the privatization would have the flag-carrier emerge in a much healthier condition, “capable of taking its place as a generator of economic and employment growth, and as a foundation stone for the development of tourism in our country.”

“Everyone knows that Air Niugini has been unable to fulfill its potential and that it has struggled to keep pace with the rapid changes taking place in the industry in the region,” he said.

“Its prices have been rising and its services have been deteriorating. It employs fewer people than it did.”

He said privatizing the airline would change all that.

He gave an assurance that the airline, like all other institutions to be privatized, would be controlled in their ownership but added “those wishing to buy Government businesses will pay a full and fair price.”

“There is no hidden agenda. Details of the sale processes will be made public,” Sir Mekere said.

He said a number of airlines were interested in Air Niugini and the sale process in the next few weeks would sort out the serious bidders from the rest.

The amount of foreign involvement in Air Niugini will be subject to restrictions to ensure that bilateral air service agreements with other countries were not jeopardized.

The details will be developed through the preparatory work undertaken by the Privatization Commission and its advisers. These advisers are Deloitte Touche Tohmatsu PNG management consulting, financial, audit and tax professionals, as the team leader, the Ambidgi Group Pty Ltd., an independent international consulting firm specializing in the development of institutions and infrastructure to support air transport and related industries and Allens and Arthur Robinson, a leading law firm in Asia-Pacific.

Air Niugini was created in 1973. It serves five international cities Singapore, Honiara, Manila, Brisbane and Cairns – and a domestic. It has a fleet of 10 aircraft Ð one Airbus A310-324, three F28-4000s, five F28-1000s and one Dash-200B. It has 1500 employees.