Air Niugini - History

History

The airline was established in November 1973 as the national airline of Papua New Guinea with the government holding 60% of the shares, Ansett (16%), Qantas (12%) and Trans Australia Airlines (TAA) (12%). It started as an exclusively domestic carrier; however it expanded to offer international services shortly thereafter. In founding the airline, the government aimed to encourage regional development in a country without an extensive road network. The airline was established using DC-3 and Fokker F27 aircraft.

International services commenced very early on in the history of the airline with a leased Boeing 720 from 6 February 1976 to 2 February 1977. This was later replaced with a Boeing 707 purchased from Qantas. During the late 1970s, internal services were performed by a combination of Fokker F28 jet and Fokker F27 turbo-prop aircraft. By the end of 1975 Air Niugini leased Boeing 727-200 type aircraft from Ansett and TAA to serve routes to Brisbane. The airline also acquired a lease of a Boeing 707 from Qantas to commence a weekly service to Manila and Hong Kong. In 1976, the government bought out the Qantas and TAA holdings and in 1980 acquired the Ansett shares to make the airline wholly government owned. The fleet of F-27s was phased out in the early 1980s with the introduction of the newly developed de Havilland Canada Dash 7 four-engine turbo-prop.

In 1979, Air Niugini opened routes to Honolulu and to Singapore via Jakarta. That same year, new facilities were opened at Jacksons Airport and new Sales Offices opened in Hong Kong, Tokyo, Europe and the United States. Air Niugini operated their Boeing 707 from Auckland to Hong Kong via Port Moresby in a tripartite agreement with Air New Zealand and Cathay Pacific. This service ran from 1981 to 1985.

In 1984, the airline replaced the two Boeing 707 aircraft with an Airbus A300 on lease from TAA. This was replaced several years later with two Airbus A310s as the carrier expanded to offer flights principally between Australian Eastern capital cities and destinations in Asia such as Singapore and Manila via their hub Port Moresby.

The airline endured considerable hardships in the 1990s, with unrest in Bougainville and a volcanic eruption in Rabaul destabilising the company's busiest domestic services. The Asian currency crisis also made an impact, with Air Niugini posting financial losses during this decade. The government of Papua New Guinea responded by cutting jobs from the airline, suppressing wages, as well as opening offices in Asia and Europe in an attempt at having the airline run profitably. The reforms bore fruit by 2003, with the airline posting a profit of US$15.8 million for that year.

A Boeing 767 was acquired in August 2002, replacing the Airbus aircraft, and was used to offer expanded international services. Combined with aggressive pricing, this made it the most competitively priced airline on many of its routes. A sharing agreement still exists with Qantas in which that airline buys "blocks" of seats on Air Niugini's flights between Port Moresby and Australia.

The financial turnaround seems to have stymied pressure from various sectors, including the IMF and the Australian Government, to privatise the national carrier. The PNG government has voiced concerns that privatisation would jeopardise domestic routes that provide a vital service to regional people and encourage economic development, but which fail to realise a profit.

From September 2004, Fokker F100s have been introduced to start to replace the aging Fokker F28 aircraft that are used on domestic routes, the daily Cairns service, and the twice a week service to Honiara in the Solomon Islands.

In March 2006, Transport and Civil Aviation Minister Don Polye announced an open air policy, which would allow other airlines to fly international routes into and from Papua New Guinea. The policy will take effect in 2007.

On December 2007, Air Niugini returned its leased Boeing 767 aircraft to its owners, Air New Zealand. The airline briefly entered a wet lease arrangement with Viva Macau before taking up a lease with Icelandair for a Boeing 767-300ER and a Boeing 757-200W. The 757 was returned in March 2011 and replaced with two additional 767-300ER aircraft..

On 18 April 2008, flights commenced on the Sydney-Port Moresby route initially using leased Embraer 190 aircraft leased from SkyAirWorld of Australia.