Niugini to Qantas, TAA

‘Three’s a crowd’ says Air Niugini to Qantas, TAA

Negotiations began in September between the governments of Papua New Guinea and Australia on ter mination of the Australian Government’s shareholding in the PNG national airline, Air Niugini.

Under the agreement establishing Air Niugini, the Australian Government’s international and domestic airlines, Qantas and Trans- Australia Airlines, each holds 12 per cent of the shares in Air Niugini. The country’s major commercial carrier, Ansett Airlines of Australia, holds 16 per cent. The remaining 60 per cent is held by the PNG Government.

The agreement, concluded under the former Labor government in Australia, makes clear provision for an eventual take-over of the Australian government interest, on the initiative of the PNG Govern ment. It is this provision that PNG is now seeking to put into effect.

Difficulties first began to appear in the arrangement after Air Niugini went international in 1975.

A spokesman for Air Niugini ad mitted at a press briefing that, in negotiations seeking traffic rights overseas, some foreign civil aviation authorities had gone so far as to suggest that Air Niugini was just a front for the Australian government airlines. PIM understands that US and Japanese officials have been among those raising such objections.

Speaking at a September press con ference in Port Moresby, PNG Prime Minister, Mr Michael Somare, denied reports of friction in the agreement, but conceded that a problem arose from the fact that Qantas, as a shareholder in Air Niugini and as an international carrier itself, knew the boardroom secrets of Air Niugini.

Although Qantas and Air Niugini had an effective working arrangement between themselves, the shared secrets became an inhibiting factor when Air Niugini wanted to conduct independent negotiations with other international carriers and their governments. ‘‘We sometimes hear things back from Australia practically before we know them ourselves,” he said, ad ding: “If a country like PNG and its

airline want to be independent, they have to be independent in fact as well as in name. What’s the use otherwise?”

Mr Somare brushed aside specula tion, some of which was aired in the PNG National Parliament, that Air Niugini would offer the Qantas and TAA shares to Ansett.

He said his government’s sole con cern was to build up its equity in its national airline, and that this would be done by proper negotiation under the terms of an existing agreement with the Australian Government.

But nothing said by Mr Somare ruled out the possibility, which is be ing discussed in airline circles, of Air Niugini entering or seeking to enter a business deal with Ansett involving fleet-usage and maintenance arrangements. The stumbling block to this could be the attitude of the Australian Government, in the light of its own airline policies.

While talks on the Australian government shareholding were getting

under way, Air Niugini confirmed that it was involved in con tinuing discussions with US civil avia tion authorities on the possibility of obtaining landing rights in Guam and Hawaii. It said the talks were still in a very tentative stage, and that market surveys would have to be completed before the airline firmed up its own at titude to the proposed route expan sions.

Air Niugini will begin flying into Sydney early in November under an agreement concluded with the Australian Government. At present its Australian operation terminates at Brisbane.

It is due to begin flying to Kagoshima, southern Japan, in January.

The airline plans to buy a Boeing 707 from Qantas in 1977. Seven Air Niugini pilots, most of them Australians, have been training with Qantas in Australia for conversion to Boeing 707 crew work.