Minister dismisses claims of airline interest transaction scandal

State Enterprises Minister Sasindran Muthuvel has dismissed claims that a proposed transaction to acquire interests in PNG Air is suspicious.
Responding to comments by People’s National Congress deputy party leader Richard Maru, he confirmed that Air PNG would need more than K300 million to begin replacing its Fokker fleet.
Muthuvel said the airline’s re-fleeting strategy was a priority driven by the need to replace its ageing fleet with more modern, more fuel-efficient aircraft.
He also clarified that the transaction involving the acquisition of Nasfund’s shares of PNG Airlines was about strengthening domestic capacity at a time of substantial pressure in the industry.
He also stated that stakeholders and the public needed to be clear that the proposed transaction would progress through the proper regulatory and due diligence considerations before the Air Niugini board made its final recommendations.
“I agree that globally, the airline industry has suffered from the drastic drop in air travel because of the Covid-19 pandemic,” he said.
“This situation, however, provides us an opportunity to explore different business models to enable Air Niugini to evolve as a stronger national airline.”
Muthuvel said Air Niugini was undergoing extensive restructuring and cost-saving strategies.
“The restrictions imposed due to the Covid-19 pandemic has forced every organisation to adjust its business operations if it is to survive,” he said.
“Through a change in approach, airlines operating in PNG will have a better chance at preserving capacity and services, and importantly, the jobs of thousands of citizen airline workers.
“In a time of crisis, we must look for alternate strategies to not onlystrengthen the businesses, but also to keep them alive.
“The future of the industry in PNG is not just a government issue, all stakeholders’ views must be taken into consideration and I expect bipartisan support .”
for the optimal solution based on solid facts.”
The minister reassured the public that the Government would follow due process in examining both the Air Niugini restructuring and PNG Air equity transfer to reach a sensible decision based on commercial and financial facts, not idle speculation.