Airlines In PNG Facing Bankruptcy, Says Maru
National carrier Air Niugini, PNG Air, and other third-level airlines may be facing bankruptcy in the next 12 months, People’s National Congress deputy leader Richard Maru has warned.
“This will happen unless there are significant cost-cutting measures, including the government going to their rescue,” he said.
Mr Maru said the Minister for Public Enterprises and State Investments Sasindran Muthuvel proposed on June 12 that the government should provide a relief package of K300 million for Air Niugini because the airline was “currently facing liquidity issues and is in dire need for more capital injection and support to mitigate the economic slowdown”.
“Alarmingly, at this critical time when Air Niugini desperately needs a K300 million bailout, the government appears to be facilitating a deal for Air Niugini to buy out Nasfund’s shares in PNG Air,” Mr Maru said.
“This is at a time when PNG Air is about to go bankrupt; Air Niugini will likely take over existing routes anyway.”
He said to any independent observer, the proposed transaction would appear suspicious, makes no business sense and can be perceived as a corrupt deal by people with vested corporate interests.
Mr Maru said concerns are being raised as to whether there is any validity in claims of conflict-of-interest for decision makers at Air Niugini in relation to their private business interests as well as partnerships with Nasfund.
“The question must be asked – why is this purchase just for shares held by Nasfund, and not shares held by other investors such as MRDC and private shareholders?” he said.
“James Marape must explain where the government, on behalf of Air Niugini, is getting the money to buy out Nasfund’s interest in PNG Air.
“This is particularly important at a time when Air Niugini itself can go ‘belly up’ if the government does not come to its rescue with the K300m that it needs.
“I call on my brothers in the National Executive Council, to wake up your sleeping Prime Minister and urge him to take decisions now to safeguard Air Niugini from going belly up and reorganise the airline industry.”