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Bid to Acquire PNG Air – A Terrible Choice

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The decision by Link PNG Ltd, (subsidiary of Air Niugini Limited) to acquire some of PNG Air starts the creation of a monopoly of the airline industry in Papua New Guinea.

It will be a terrible move which will be extremely detrimental to the travelling public of Papua New Guinea as there will be no competition. In a monopoly, price of airfares will rise, efficiency will decrease and Link PNG through its Holding Company Air Niugini will have absolute power to dictate to the travelling public how, when and where they will travel in the future. There will be no choice to the travelling public. There will also be no choice for businesses for their Charter and Freight.

Air Niugini has already lost over 15% of passenger market share to PNG Air over the last few years. Our Freight Revenue has increased by 30% and Charters by 25%. PNG Air now has 50% of the market share and is at an even level playing field with Air Niugini.

Undoubtedly PNG Air has demonstrated an efficient, open, competitive operation to the Papua New Guinean public and businesses as seen by its increase in all areas of revenue generation and market share. Besides, its fares are an average of 10% lower than that of Air Niugini where the public has gained because of open market competition.

This intended merger is therefore nothing but a way for Air Niugini to claw back market share in a purely easy self-interest manner and without due regard for competition which is detrimental to the interest of the Papua New Guinean people who wholly own PNG Air Ltd.

PNG Air questions Link PNG Ltd’s intention to even be part of PNG Air as a conflict of interest may arise if it so happens. Jobs will definitely be lost both in Port Moresby and at out ports if this was allowed to go ahead
because of consolidation. Departments will merge, outports will close and other operations will merge. Relying on a single airline in a country like Papua New Guinea for much needed air travel is not advisable and can cause huge issues should this single airline fail to deliver.

Other shareholders of PNG Air and the PNG Air Board were neither contacted nor consulted by Air Niugini regarding this move which may breach Corporate Governance and Listing Rule proticals. There is no merger as they suggested which is misleading the travelling public. PNG Air is operating with a strong well qualified team of Executives, Pilots, Engineers and other dedicated staff and a strong Board of Directors.

PNG Air is a private company wholly owned by Papua New Guineans. It goes to more destinations than Air Niugini with 2 additional destinations to come on board. It has a young and modern fleet of ATR aircrafts and over 80% of pilots and first officers are Papua New Guineans.

PNG Air is on the verge of releasing its Strategy Plan to move forward post Covid-19 to ensure that a milestone of paying Shareholders a dividend is reached while continuing to maintain Safety as its No 1 priority and look after its travelling public no different to what it has done in the past.

For now it is business as usual at PNG Air Limited.

PNG Air Media Release – 28 May 2020

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