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Air Niugini Targets Fleet Replacement Program

Papua New Guinea’s major airline Air Niugini is making progress with a financial turnaround and is ready to begin a major fleet refresh program.

Papua New Guinea’s major airline Air Niugini is making progress with a financial turnaround and is ready to begin a major fleet refresh program, a senior executive said.

The airline is “now in a position to start looking to the future” by renewing its fleet, and this will be “our priority over the next two-to-three years,” Air Niugini executive manager for network and fleet David Glover said. The carrier will probably concentrate on its widebody and narrowbody jets first, then its regional fleet, Glover told Aviation Week Network at the Association of South Pacific Airlines conference in Christchurch, New Zealand.

Air Niugini’s only widebodies are two Boeing 767-300ERs, and it will likely replace these in 2021 when their leases expire, Glover said. The airline will probably look for used widebodies such as Airbus A330s or even Boeing 787s, he said.

On the narrowbody side, the airline already has four Boeing 737 MAXs on order. The first two of these are due in the last quarter of 2020, and these will replace the two 737s currently operated by the airline, Glover said. The carrier is still considering financing options for the two new aircraft.

The third and fourth 737 MAXs—intended for fleet growth—were originally due in 2021, but will probably be delayed, he added. The carrier is now discussing the schedule for these aircraft with Boeing.

The airline is still keen to receive the MAXs, and has “every faith in Boeing,” Glover said. There is “no doubt the [MAX problems] will be resolved” from a technical perspective, and after that, it is a question of addressing customer confidence and “getting the regulators on board.”

Air Niugini is also beginning to consider the replacement of its regional jet and turboprop fleet. The airline operates 13 Fokker 70 and 100s, and eight DHC Dash 8s, according to Aviation Week Fleet Data Services. The carrier is likely to evaluate newer turboprops for these fleets, Glover said.

However, the replacement of the regional aircraft will take longer than the larger jets. Glover noted it will be a more complex process, and the airline does not want its domestic fleet replacement to begin while some of the country’s airports are being upgraded. While the airline is “supportive” of these airport projects, they are disrupting scheduling.

Glover described 2018 as “a very tough year” for Air Niugini. The year began with pilot shortages which caused cutbacks on some domestic routes. A major earthquake in Papua New Guinea in February 2018 disrupted the country’s important resource industries. Civil unrest resulted in the burning of a Dash 8 by protesters, and in September 2018 an Air Niugini 737 landed short of a runway at Chuuk airport and sank in a lagoon.

After all these incidents, the airline suffered a “substantial loss” for 2018, Glover said. The carrier launched a transformation plan to reduce costs and increase revenue, which included the suspension of some nonprofitable international routes. Alan Milne took over as MD in October 2018.

The aim of this program was an improvement of PGK60 million ($17.3 million) to turn around the airline’s annual results. Air Niugini is “on track” to achieve this, and has boosted the target to PGK80 million, Glover said. “The outlook is much better” for 2019.

Air Niugini has started bringing more of its aircraft maintenance checks in-house, although it has been limited by lack of hangar space. Because of this, it will soon look for partners to build a hangar that can accommodate either a 737 or two Fokkers.

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