News Air Niugini starts cost-cutting after tough 2018

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Air Niugini (PX, Port Moresby) is aiming to generate savings of PGK80 million kina (USD23.7 million) through its “Higher Altitudes” transformation program.

Managing director Alan Milne told The Post Courier newspaper that the decision to restructure the company’s costs came after a painful 2018 saw it suffer a “substantial” loss.

“Coupled with the loss of a [Link PNGDash 8-200 aircraft in Mendi due to civil unrest and the loss of a B737-800 in a landing incident in Truk, the business struggled to drive change,” he said during a leaders’ summit in Port Moresby last week. “However, in the last quarter, we suspended several loss-making routes and focused on diligent cost control in all areas.”

Milne said Higher Altitudes had resulted in savings of PGK20 million (USD5.93 million) during the first quarter of 2019, primarily through cost control, revenue enhancement, and human resource development including operational and customer service improvements. The operation returned a profit in both December 2018 and January 2019.

Air Niugini will also cut unprofitable routes while expanding codeshare agreements with key partners. It will also focus on growing its East-West strategy and hub at Port MoresbyJacksons Airport.

“The business outlook for our airline company for 2019 is good as we experienced more staff engagement and strict management of cash flow has resulted in the reduction in expense. Plus we are seeing steady revenue generation,” Milne added said.

Air Niugini operates one B737-700, one B737-800, two B767-300(ER)s, seven Fokker 100s, and seven Fokker 70s on regional flights throughout the South Pacific/Oceania, Southeast Asia, and Japan. Its Link PNG subsidiary operates five Dash 8-300s and two Dash 8-200s on extensive flights throughout Papua New Guinea’s various regions.

Milne said Air Niugini will still take delivery of its four B737-8s despite the MAX’s recent global grounding. The executive said the airline would add two MAX jets in 2020 and two in 2021.

“We have full confidence in the Boeing product and we look forward to introducing these new aircraft into our fleet,” Milne said.

Source :  ch-Aviation