By WALLACE KIALA
PRIME Minister Peter O'Neill says the proposed merger between Air Niugini and Airlines PNG has been cancelled, The National reports.
The government's decision comes because of the tragic plane crash last Thursday, the worst air disaster in the nation's history.
The Dash 8 aircraft crashed near Madang, killing 28 of the 32 people on board.
While conveying his condolences to the families of those who lost their lives, O'Neill said the Independent Public Business Corporation would be directed to review other business alternatives.
It would also put in place aviation safety options and look at planning a way forward for the aviation industry.
"Government has heard what the people and the unions have said and has decided to cancel it (the merger)," O'Neill said.
He was speaking at the launch of the National Airports Corporation last Friday. His announcement was greeted with applause from the company's management and staff.
An NAC senior officer was reportedly among one of those killed in the plane crash.
The decision by government to have the merger dissolved now puts to rest speculation and issues from the public, individuals, private and public institutions and the airline workers unions on the implications of the merger.
The National Executive Council last month approved in principle the merger by the two major airlines.
There has been increasing concern raised against it by the public and private institutions.
When announcing the merger last month, O'Neill said the major result would be the significant expansion of air services.
He had said only 32 airports had scheduled airline services.
More than a week ago, members of the National Airline Employees Association, the National Pilots Union, Flight Attendants Association, Air Niugini Engineers Association and the airport fire fighter union marched from Jackson International Airport to the Air Niugini head office at 7-Mile to protest against the proposed merger.
They had a petition to the airline management, saying a merger would not deliver any financial, commercial and credible gains to Air Niugini and the people.