Papua New Guinea Minister Urges Air Niugini and PNG Air to Settle Airport Debts

Papua New Guinea’s Transport and Civil Aviation Minister, Walter Schnaubelt, is pressuring national carriers Air Niugini and PNG Air to settle outstanding debts owed to the National Airports Corporation (NAC). Schnaubelt emphasized the importance of timely payments to sustain safety and operations at NAC-controlled airports.

While the exact amount owed by PNG Air was not disclosed, it was revealed that Air Niugini has a debt of PGK120 million kina (USD32.2 million) to the state-owned airport operator. Schnaubelt disclosed that Air Niugini had entered into a deed of settlement in May 2023 to address its debt, but the total outstanding amount had increased despite ongoing payments.

“NAC is in dialogue with ANL [Air Niugini Limited] to amicably resolve the outstanding debts,” stated Minister Schnaubelt. He highlighted the impact of Air Niugini’s re-fleeting program, involving the introduction of heavier aircraft, on existing airport infrastructure.

In response, Air Niugini’s acting CEO, Gary Seddon, clarified that the airline has been gradually reducing its NAC debt. Seddon noted that Air Niugini had paid PGK90 million (USD24.1 million) this year and continues to make weekly payments ranging from PGK1.3 million (USD347,000) to PGK1.5 million (USD402,000). Additionally, the airline has committed to a final settlement of PGK38 million (USD10.2 million) for legacy debts with NAC.

Air Niugini, a state-owned carrier, operates a fleet of 27 aircraft, with recent re-fleeting efforts, including the order of two B737-8s in June and a commitment to eleven A220s. The carrier has also leased additional aircraft to address short-term capacity needs.

On the other hand, PNG Air, a smaller carrier, is in the final stages of a debt restructuring agreement and aims to exit formal restructuring by the end of the year. Operating thirteen ATR and Twin Otter aircraft, PNG Air serves 22 airports within Papua New Guinea.

As both airlines navigate financial challenges and restructuring efforts, the resolution of outstanding debts with NAC remains a critical aspect of ensuring stable and sustainable operations in Papua New Guinea’s aviation sector. Stay tuned for updates on the ongoing developments in this financial scenario.