ICCC releases Link PNG draft determination

The Independent Consumer and Competition Commission has released its draft determination for the authorisation application lodged by Link PNG on the proposed joint operating agreement and code-share agreement with PNG Air Limited.

On 09th April, 2021, Link PNG lodged an application for authorisation pursuant to Section 70 of the Independent Consumer and Competition Commission Act 2002, to enter into, and give effect to, a proposed JOA which includes provision of a proposed code-share agreement with PNG Air for the duration of five years.

According to Link PNG’s application, the proposed JOA is for the purpose of, among other things, the coordination of flight schedules, fleet allocation, operational and maintenance of services and charter airline operations between the two airlines.

Link PNG’s proposed code-share agreement will be on a free-sale basis.

ICCC Commissioner and Chief Executive Officer, Paulus Ain, said the ICCC identified the relevant markets to be the market for the provision of domestic scheduled or regular passenger transport services, the market for the provision of domestic air freight services and the market for the provision of domestic air charter services, to destinations within PNG.

“Overall, the ICCC has considered that the proposed code-share agreement should be authorised only with a number of conditions, which are aimed at amending the proposed code-share agreement to minimise likely anti-competitive effects and ensuring the two airlines continue to compete in the long term,” Ain said.

“The ICCC has considered that the proposed JOA should not form part of the authorisation, because it constitutes an unjustifiable intrusion by Link PNG into the management of PNG Air such that the former would gain decision-making control over key aspects of the strategy, operations and, consequently, the financial structure of the latter and, therefore, would be likely to substantially lessen competition and result in greater detriment than benefit to the public.”

Ain added that the ICCC proposes to grant authorisation with conditions to Link PNG and PNG Air to enter into and give effect to the proposed code-share only including, but not limited to, the removal of the proposed JOA from the proposed arrangements.

“The details of the ICCC’s assessments are in the draft determination.”

Ain also advised that Link PNG’s application to acquire 40 percent of Nasfund shares in PNG Air is still going through the normal competition assessment process and that the general public will be informed of the ICCC’s determination once the competition assessment process is concluded.

As part of the authorisation process, the ICCC now invites comments and submissions from relevant stakeholders and the general public on the draft determination released. Public copies of the draft determination can be obtained upon request through email: buraliu@iccc.gov.pg.

All comments and submissions should reach the ICCC by 20th July, 2021 and addressed to Mr. Paulus Ain, Commissioner and Chief Executive Officer of the ICCC.

All submissions will be treated as public information, except where information is designated “confidential” by the submitter. Where information is designated confidential, the submitter must provide reason(s) as to why that particular information should not be disclosed to the public. The ICCC will assess and make a decision on the confidentiality claim(s).

All queries relating to this matter should be directed to Steven Sugl, Executive Manager, Competitive Markets & Fair- Trade Division, on telephone 312-4600 or e-mail to: ssugl@iccc.gov.pg.

Press release