Polye: Do not fear proposed merger

A MERGER of two airlines is not such a bad thing and no one should fear it, Transport and Works Minister Don Polye said yesterday, The National reports.

Polye told The National the proposal for Airlines PNG and Air Niugini to merge was his, and he was floating the idea among fellow ministers and industry stakeholders.

He said the government’s “open sky” policy would attract more competitors to the country as PNG becomes an attractive destination for commerce, trade and holiday.

“Our skies will get busier as we have seen with the entry of Qantaslink and Virgin Blue.

“The merger proposal might be the best option for both airlines (APNG and Air Niugini),” he said.

“Air Niugini may not like this, but it must remember the playing field has never been even. Air Niugini has survived over the years, and re-fleeted through massive capital injection from the government.

“APNG may not be government-owned and funded, but it is about 30% PNG-owned. It has served the country well, flying to some very rural and tough areas and is helping to deliver our development programmes.

“It might have debt, or suffered losses, but that will be taken into account when determining equity in the merger.”

He said his advice was that a merger would save both airlines K150 million, give the merged entity a better capital base to work from and remove the need for capital injection by the government.

“I believe this strategy is best for both airlines going forward.

“I have discussed this with the prime minister and he is supportive.”

Polye said the merger proposal would be thoroughly discussed.