PX to receive govt aid

The National Business

By PETER ESILA
STATE-owned airline Air Niugini will receive some aid from Kumul Consolidated Holdings Ltd (KCHL) to prop up its operations.
The Motor Vehicle Insurance Ltd (MVIL) gave K50 million to Kumul Consolidated Holdings Ltd in Port Moresby yesterday.
Prime Minister James Marape said MVIL was one of the State-owned enterprises (SOEs) that had good returns over the years.
KCHL managing director Isikeli Taureka said some potions of the fund would be given to Air Niugini after an evaluation.
“We have established a transformation committee and will work out on how to pay their existing creditors, how much on the working capital and how much on restructuring the balance sheets,” he said.
Prime Minister James Marape said instead of Air Niugini going to a bank or financier to fund its operations, KCH was recommended to look into dividends within SOEs to help Air Niugini.
“In this instance, MVIL was posting substantial yield, KCH will then support Air Niugini to ensure the airline is given enough input of liquidity to keep its operations running as we sail past 2020 and hopefully that should resuscitate its operations for a better 2021,” Marape said.
“A current business reform that is currently taking place in Air Niugini will ensure it stand on its own feet and make a profit again.”
State Enterprise Minister William Duma said MVIL was one of the few State-owned companies that was doing well.
“It was considered by Cabinet after considering the financial performance of MVIL and there were surplus funds for distribution to the shareholders under the Companies Act,” he said.
“We are aware that Air Niugini continues to struggle with its operations during the Covid-19 pandemic.
“It was timely that MVIL, being the better performing State-own enterprice, should assist the struggling company.”

5 comments

  • SOEs such as Air Niugini must be able to compete and sustain commercial viability rather than relying on bail out money from another SOE. That dividend should be paid to the consolidated revenue to enable delivery of essential goods and services to the public. If Air Niugini cannot maintain commercial viability let alone other SOEs it’s time to corporatize/ privatize such SOEs. You don’t have to look beyond BSP as a case in point.

  • Good assistance at the time when businesses have been affected by the pandemic. Such timely help should also go to other businesses as well.

  • Air Niugini is being bailed out time and time again. Can the management of this SOE get the business metrix right, and start making profit to support government operations. Its time for SOEs to think about what they should do to support the government operations, rather than thinking about how government should support SOEs. Thanks to the management of successful SOEs who are able to assist our government in these trying times.

  • MVIL should lower there rates. They are killing all small businesses. K50M is too much it clear shows that the government is not liniat to its people.

  • Air Niugini has been operating Domestically and overseas for cargo and passengers. The airfares are normal economy fares and there are no social distancing within the aircraft. The flight to Manilla are nearly always full. Unlike airlines such as SIA, Air Niugini continues to operate with cash flow. If the management is unable to operate within their means and the Govt. continues to bail out, the management becomes incompetent.

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