Senior Qantas executives visited Papua New Guinea (PNG) capital Port Moresby in early February to study a PNG Government proposal for the Australian carrier to take control of Air Niugini under a management contract, in an attempt to ward off the collapse of the airline.
The review follows an approach to Qantas chief executive James Strong by PNG Transport Minister Vincent Auali, who says that the offer is Government backed, and is aimed at ensuring that the airline has top level management to encourage investor confidence ahead of its planned privatisation.
Qantas, which is understood to have been asked to take a 25% equity as part of the proposal, has not commented on the management contract offer, but the team in Port Moresby included the carrier's chief pilot and general manager, flight operations, Capt Ray Heiniger.
Qantas is known to be concerned over the safety implications of its codesharing arrangements with Air Niugini, largely because of deteriorating airfields, and breakdowns in other infrastructure.
Air Niugini has suffered crippling setbacks caused by the devaluation of the national currency (Kina) which has virtually doubled the price of fuel and spare parts, a Government rejection of fare-increase proposals and political intervention in its management.
Two of the airline's Fokker F28s have been written off following landing accidents, both partly attributed to airport conditions. Up to 50% of the airline's fleet of eight remaining F28s are grounded at any one time because of spares shortages and maintenance problems. Air Niugini is negotiating with Ansett to acquire two later-model F28Mk4000s.
Source: Flight International
