Airlines PNG posted a net loss of 7 million US dollars last year, after making a 700 thousand dollar profit in 2011, the company's annual report has revealed.
The airline blamed this on the after-effects of the global financial crisis in 2008.
It's Chairman Simon Wild says 2012 was a challenging year for the global airline industry and widespread effects were still being felt.
He says slower-than-expected recovery in the US and financial crises in Europe significantly affected global commodity prices.
He says these influences had an adverse effect on Airlines PNG with a number of its customers in the resources industry seeking to reduce costs and especially those associated with "fly in fly out" operations.
However, despite the difficulties, Wild says the board believes that the changes APNG carried out during the year, and its commitment to a high level of service will support a turnaround for the company.