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PNG Air CEO Pereira: Survival is focus for 2020

Survival is the first primary focus of businesses following prolonged lockdowns and ‘new normal’ brought on by the global Covid-19 pandemic that has impacted everybody worldwide. This was the crux of the message from acting CEO of PNG Air, Mr Anthony Pereira during a recent interview with PNG Business News at their 7 Mile head office, in Port Moresby.

While optimistic a vaccine for Covid-19 will soon be found and business will get back on track overtime, Pereira however predicted a ‘slow pick-up of business in reaching pre covid-19 levels’ adding that ‘many companies will also go bankrupt along the way’. “This is already happening and will continue to be so which is a sad and a desperate reality” Pereira said.

“We at PNG Air are very fortunate to have a great bunch of staff and senior managers who are working very hard to keep the airline going,” he said. “We must have confidence as air travel will always be needed now and into the future. Confidence will grow, but it will be a struggle” Pereira said.

“Following the Covid-19 pandemic, global airlines have been the hardest hit, along with tourism and the hotel industries and many other similar businesses, as nations implement strict measures to contain the spread of the Coronavirus, which has affected traditional models of doing business” Pereira said.

PNG Air, like many other businesses in PNG has been hard hit as well while support to businesses has not yet really been felt. Staff have been stood down while many others including pilots and engineers are on rotating shifts. “It’s all about survival for us for 2020 like many other airlines and other businesses,” said Pereira.

“We are currently operating at 50 per cent and as mentioned have staff on rotating shifts so at least they get some hours and earn some income,” Pereira said. “This is a world pandemic affecting everyone, but at the end of the day we must have that confidence that it will get better,” he added. “When things are back to normal eventually, we will see benefits returning to our staff, but it will be a struggle for a few years” he predicted.

PNG Air services 29 destinations across PNG, many of them rural airstrips where we transport customers to and from and where fresh produce are moved from farms to markets in Port Moresby.

According to Google search, globally, more than 17,000 planes have been grounded, 400 million jobs affected and an estimated 100,000 plus pilots laid off due to the impacts of Covid-19. Billions of dollars have been lost in revenue and profits which is a very sad situation, “Pereira informed.

“Unlike international airlines, we have been lucky because our business is servicing domestic routes for pax, moving of cargo and adhoc charter especially for our mine customers,” Pereira said. The 55 pilots at PNG Air are mostly local staff with a few expats. To cope with the situation, PNG Air has stopped engaging ‘touring pilots’ and stood down those overseas currently utilizing the 55 on ground at Port Moresby for its operations until operations get back to normalcy” he said.

Measures the airline has taken to address the challenges brought on by the pandemic include;

  • Reduction in travel and accommodation costs

  • Stand down of pilot numbers

  • Rotating staff and placing a freeze on new employment

  • Minimising capital expenditure, though spending on safety remaining a priority and untouched

  • Review of schedules and improving load factors

  • Re-negotiation of loans and contracts which are still ongoing

On hold are other Capex projects like the planned purchase of two fuel trucks at an estimated cost of K2 million for ground services division. “We are also renegotiating supplier deals and finding ways to limit other general expenses”.

“It is really tough and therefore we need to tailor our costs to ease cash flow burdens,” Pereira said.

Plans for 2020 have been deferred for another year or two. PNG Air currently has 13 planes in operation and has suspended its Dash 8 replacement program with ATR aircraft until January 2022. The new ATR fleet on order is a 48 seat, turbo propelled aircraft suitable for short take-offs and landings unlike jet planes.

“The team at PNG Air, is fully devoted to making things work and constantly looking at ways and means to improve and add value during these trying times”. Pereira said.

“We have completed our three year Strategic Plan to commence from January 2021. Every department and every single staff member is behind this plan to make sure we achieve the targets for all of our stakeholders and shareholders in the future” said Pereira.

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