PNG Air warns of monopoly

The National Business

PNG Air Ltd says a recent decision by Link PNG Ltd, (a subsidiary of Air Niugini Ltd) to acquire a majority stake in it will start the creation of a monopoly of the airline industry in Papua New Guinea.
ICCC commissioner and chief executive Paulus Ain this week said Link PNG had proposed to acquire 60 per cent of PNG Air Ltd and the commission was reviewing the proposal.
In a statement yesterday, PNG Air acting CEO Anthony Pereira said: “It will be a terrible move which will be extremely detrimental to the travelling public of PNG as there will be no competition.
“In a monopoly, the 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.
“PNG Air questions Link PNG’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, out ports 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.”
Pereira said other shareholders of PNG Air and the PNG Air board were neither contacted nor consulted by Air Niugini regarding the move which may be a breach of corporate governance and listing rule protocols.
“PNG Air is a private company wholly owned by Papua New Guineans,” he said.
“It goes to more destinations than Air Niugini with two additional destinations to come on board. It has a young and modern fleet of ATR aircrafts and over 80 per cent of pilots and first officers are Papua New Guineans.”
However, Link PNG general manager Alex Kia earlier had said there would not be substantial changes at PNG Air. Kia added that the strategy was to integrate the Link PNG network into PNG Air’s schedule and rebranding Link PNG DHC-8 turbo-prop aircraft as PNG Air.