Chairman of the board Sir Frederick Reiher when commending staff and stakeholders of the 43rd anniversary in Rabaul, said when industries such as mining, Oil and gas construction slow, Air Niugini will be impacted seriously.
"I want to be frank and upfront about this. These are tough and challenging times for Air Niugini.
"Passenger numbers, especially on most of our domestic routes are down, well down.
"That is despite the fact that we have not increased fares, and have sought to offer as many concessional fares for families as possible," he said.
"But the simple truth is that spending on air travel is one of the first to be impacted when businesses are doing it tough, and when family budgets and incomes are under pressure, and of course when there is a general downturn in the national economy."
Meanwhile, Air Niugini also unveiled the naming of a F100 aircraft, Rabaul on Friday.