23 Aug 2010

Papua New Guinea leader opposed to airline merger

3:04 pm on 23 August 2010

The Papua New Guinea Prime Minister is opposed to a merger between state owned Air Niugini and Airlines PNG.

Sir Michael Somare, who's the minister responsible for Air Niugini, was responding to calls for a merger amid concerns at the impact of Qantas flying into PNG.

The Australian airline entered the PNG market last month hoping to capitalise on the country's ExxonMobil-led Liquefied Natural Gas project.

Sir Michael welcomes the competition and says he believes a merger is not in the national and public interest.

He also cites Airlines PNG's low profitability, its reliance on charters to mining projects and its poor safety record against that of Air Niugini, which has never had an accident.