PNG Air says the revenue for 2017 is expected to surpass 2016 following improvements in the company’s capacity as well as positive economic developments around the country.
PNG Air board chairman, Murray Woo, said at the company’s Annual General Meeting (AGM) yesterday that following a financially challenging year in 2016, the airline is now positioned strongly to achieve improved returns.
Woo said in 2016, the airline made K34.8 million operating loss before abnormal items and tax, mainly off the back of the general softening of the PNG economy, the global downturn in the resources sector, a significant drop in the revenue from charter operations due to expiry of existing contracts and lack of new charter opportunities, and the weakness of the PNG Kina.
However, there has been significant progress made by the company following its re-fleeting with ATR aircraft, rebranding to the PNG Air name and focusing on regular passenger transport (RPT) services around PNG.
“2017 revenue will be better than 2016 and with the capacity the airline now has and the improvement expected in 2018 in the resources industry and the PNG economy in general, PNG Air’s board believes the airline is in a strong position to achieve further improvement in returns in 2018,” Woo said.
CEO Muralee Siva says RPT revenue is expected to grow strongly in 2017 with additional revenue from a charter contract with Newcrest Mining.
He said there was a significant drop in the airline’s charter revenue from 2011 to 2016, although that had been reversed in 2017 with the airline winning the Newcrest contract.
There was also an increase in overall revenue from K209 million in 2015 to K215 million in 2016, of which RPT revenue grew from K170 million to K199 million, a 17 percent increase year on year.
“Indications are that RPT revenue will grow significantly again in 2017, along with overall revenue which benefits from the Newcrest charter from August.
“Because the overall aviation market remains flat, we believe that the increases being achieved in RPT revenue show that the company is increasing its share of that market,” Siva said.
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