PNG gov’t to inject $28.6mn to transform Air Niugini

Papua New Guinea’s government is to invest PGK100 million kina (USD28.6 million) in the restructuring of state-owned Air Niugini (PX, Port Moresby), which it says has been severely impacted by COVID-19 travel restrictions over the past few months. EMTV reports the funds will come from a PGK1.65 billion (USD473.5 million) loan from the Asian Development Bank, of which the first PGK350 million (USD100 million) will be made available to the government next year. Treasury Minister Ian Ling-Stucky, in a statement, said he foresaw a difficult road ahead for Air Niugini, as was the case with airlines around the world because of losses sustained during the pandemic. He said the financial boost would assist in the restructuring and reorganisation of the carrier following the resumption of domestic and international flights. Ling-Stucky explained the full loan, to be repaid over 12 years, would be used to resume the transformation of the country’s state-owned enterprises, already started under former Prime Minister, Mekere Morauta. He said reforms would follow the example of those at Bank South Pacific and NASFUND, the largest private sector superannuation fund in PNG. Clearer frameworks for public-private partnerships would be established, protecting the public interest while ensuring a more level playing field for increased competition. The aim was to make state-owned enterprises more accountable, efficient, and reliable, and to appoint more capable boards on merit. The transformation would strengthen the nation as it emerged from the pandemic, he said. Ling-Stucky’s statement revealed a marked change in the airline’s fortunes. In June 2020, State Enterprise Minister Sasindran Muthuvel said the airline’s “decent financial standing” allowed it to use the crisis as an opportunity to accelerate a needed fleet renewal. Air Niugini did not receive any government assistance during the COVID-19 crisis. To weather the downturn, the airline drew on a PGK20 million kina (USD5.8 million) commercial loan. The airline resumed limited domestic services in April, adding flights as demand allowed. As it stands, it also operates international flights to Cairns and Singapore Changi, according to the ch-aviation schedules module.