High stakes in airline bids

The aggressive knights of Pacific civil aviation are preparing to do bat tle once more, attracted by the decision of the Papua New Guinea Cabinet to turn Air Niugini over to private enterprise.

The new Minister of Civil Aviation, Mrs Nahau Rooney, said in Port Moresby that shares would be offered to employees and the public.

Foreign airlines would be allowed to buy shares and apply to manage the airline.

The government fa vored a long-term man agement commitment, she said at least 10 years, rather than the three years which KLM had been given under the current arrange ment.

“Management has been one of our big problems, and I don’t want to blame anyone in particular,” she said at a press conference which was attended by the Air Niugini general mana ger, Mr Masket langalio.

“I am not interested in the past. I want to look to the future and the profitability of the air line,” she said.

Mrs Rooney said pri vatisation of the airline was part of the Wingti

government’s policy of withdrawing from busi ness enterprises.

She said the number of shares to be sold initially would be deter mined after an indepen dent valuation of the air line’s total value of assets, but she hoped a substantial parcel would be bought by the air line’s employees.

Airline employees would not be affected by the decision, although current management personnel, supplied under contract by KLM Royal Dutch Airlines, and officials of the Na tional Airline Commis sion, would become “automatically redun dant.”

A couple of years ago it was Air Pacific, Fiji’s flag-carrier line, which was at the centre of a vigorous battle between Qantas and Air New Zealand on one side and Ansett Airlines of Australia on the other to keep the private com pany from extending its interests in the impor tant Pacific regional air line industry.

Air New Zealand put up a proposal, but was never seen as a hound in full cry after the fox.

Qantas eventually won the race with a three

year management con tract and very generous (for Fiji) financial terms.

Ansett made enor mous efforts to win the Air Pacific contract and was fairly clearly fa vored by Fiji’s prime minister, Ratu Sir Kamisese Mara.

Ansett chief, Sir Peter Abeles, has always had a globe-girdling vision for his huge transport conglomerate and still makes no bones about the depth of his di sappointment at losing this chance to demons trate the benefits of his private enterprise effi ciency.

Air Pacific was the plum because of its in ternational landing rights and its position at the hub of southern Pacific airline routes.

The obvious benefit for Ansett was the chance to, in effect, become a pretty full-scale in ternational airline, by taking over the running of Air Pacific’s quite ex tensive route rights.

Given the highly com petitive climate in which Australian domestic aviation works, and the limited potential for domestic growth seen by Ansett and the other main-route Australians, the benefits of the Air

Pacific link would have been considerable.

But, as the recent deal with the Cook Is lands shows, clearly, Sir Peter and his Ansett team have not let their disappointment over Air Pacific get in the way of continued efforts to achieve their goal.

There are new rumors in the industry that Ansett hopes to offer its con siderable expertise to still other Pacific air lines. The airline itself has said nothing, but that has simply im proved the range of the rumors flitting about among the islands.

As far as Air Niugini is concerned, by most accounts KLM has done a good job with the mess into which the air line had fallen, and was recently publicly com mended by Mrs Rooney for having reduced the airline’s losses.

Mrs Rooney has also been authorised by Cabinet to review all of PNG’s aviation industry, especially in relation to

operators’ licences.

General indication is that PNG will adopt an “open skies” policy.

“The government has given the leeway to be liberal in what were re stricted airways,” she said.