Non-profitable routes put on hold

Air Niugini is undertaking a rationalization of non-profitable routes, as it aims to expand the company.

Managing Director Alan Milne said the airline has to make tough decisions to ensure it gets back to being a profitable company.

Speaking at the Port Moresby Chamber of Commerce and Industry Breakfast recently, Milne said it was unsustainable to continue to operate loss making routes.

A number of international routes have been put on hold due to the impact on the business.

“Townsville, Dempensar, suspension of China, and seasonal flying on Japan; really tough decisions for an airline to make, you can imagine the feedback we get from those destinations or port arrival ports. It’s really hard work, but for the sake of the business, we have to do it.

“We have to have the health of the business back and then we can start expanding and go into profitable areas and make the business work.”

Milne said under the company’s transformation program, reduced costs and having steady revenue will be among their goals.

Milne said the company has to become healthy again in order to expand into more lucrative routes.

“The bottom-line has to be that we have to make money for Air Niugini, and we’re not going to get into loss making routes again, or we’re not going to stay in them either.

“Because the business is unsustainable. You saw the margins that we make, they are very slim, if you are happy to sit on a loss making route for a couple of years, you’ll just go out the door backwards. It’s really important that you maintain a focus on that profit making room,” said Milne.

(Managing Director Alan Milne)

Cedric Patjole