By ISAAC NICHOLAS
THE National Executive Council has approved in principle a merger by Air Niugini and Airlines PNG, The National reports.
Prime Minister Peter O'Neill announced the cabinet decision yesterday morning before flying off in the Falcon jet to attend the United Nations General Assembly in New York.
O'Neill said details of the merger would be worked out by a special Merger Implementation Office to be chaired by Public Enterprises Minister Sir Mekere Morauta.
It will comprise the chief executives of Air Niugini, Airlines PNG and independent valuers.
He said the independent valuers would undertake a due diligence exercise to ascertain the exact value of assets and business of each airline.
"At this early stage, it is likely that Air Niugini will have the majority of shares in the new merged airline,'' he said.
"The exact break-up of the shareholding will be determined by the valuations."
O'Neill gave an assurance there would be no job losses as a result of the merger.
O'Neill said: "I give that guarantee to employees of Air Niugini and employees of Airlines PNG. In fact, jobs will grow and there will be better opportunities for promotion and training.
"Air Niugini and Airlines PNG will complement each other and be in a position to provide the services our people need without capital injections from the government."
The prime minister said Air Niugini would continue to operate.
"In fact, instantly Air Niugini will grow," he said.
"It has 21 aircraft. Straight after the merger it will have 33, as the 12 Dash 8 aircraft owned by Airlines PNG will be transferred to Air Niugini and painted in Air Niugini livery (colours and logo) for operation on major routes.
"This will result in increased frequency of services for passengers at more convenient times."
O'Neill said the major result of the merger would be the significant expansion of services.
He said only 32 ports had scheduled airline services.
"The plan is that by Christmas, 132 airports will have scheduled passenger services," he said.
"By April 2012, 169 more airstrips will see services commence and, by August next year, 328 cities, towns and villages will have regular services."