Air Niugini delayed its Shanghai launch just a day ahead of departure, but remains committed to China growth

Papua New Guinea national carrier Air Niugini this week surprisingly announced it will defer the launch of its new Port Moresby-Shanghai service launch, a day before its scheduled launch. The carrier planned to serve the city pair through to 24-Nov-2018 as the route’s sole operator and would have been its longest international foray at 5284km. .


Summary:

  • Air Niugini has deferred the launch of a new Port Moresby – Shanghai service to a ‘later date’, bu says it remains committed to the venture;
  • China would have been the second international market opening from the carrier in two months, with Japan service having been launched in Sep-2018;
  • The planned international growth appears to not be in line with current Government aspirations for the state carrier.

The carrier puts the decision down to a busier than expected upcoming APEC 2018 session (the first time Papua New Guinea has been selected as host nation for the event, running from 17/18-Nov-2018), as well as increases in demand on its domestic and existing international routes during peak holiday and Christmas seasons.

Air Niugini says it will re-evaluate the introduction of services to China “at a later date”, stressing it remains committed to the venture of opening the Chinese market to Papua New Guinea “at the earliest possible opportunity”.

The highly anticipated route launch was seen as a way to complement the carrier’s existing domestic and international networks, and CEO Tahawar Durrani recently said, and even specified business and APEC delegates as part of the route’s target audience to take advantage of the “convenience” of the new direct China-PNG service.

But, PNG Public Enterprise and State Investments Minister William Duma recently stated that priority will to be given to development of Air Niugini’s domestic network, “including some of the non-profitable domestic routes”, potentially casting a shadow of doubt on the carrier’s international operations which span 12 Asia Pacific destinations including Australia (Sydney, Brisbane, Cairns), Hong Kong, Japan and Fiji.

CHART – Australia is the largest point in the Air Niugini international network that extends to 12 destinations across Asia PacificSource: CAPA – Centre for Aviation and OAG

On 01-Sep-2018 Air Niugini launched another market in which the carrier is the sole operator with weekly nonstop Port Moresby-Weno Island Chuuk-Tokyo Narita service, subsequently dropping Chuuk in favour of nonstop Port Moresby-Narita service from early Oct-2018.

PNG relies heavily on air travel as the single most important form of transport, with Port Moresby not linked to any other major centre. Air Niugini has a clear majority of total seat capacity in the country with 41,185 weekly seats (61.3%) including more than 11,000 international seats (based on schedule data for the week commencing 22-Oct-2018). This is followed by PNG Air, which operates an extensive regional and domestic commuter network across the country with seven ATR 72-600 and nine Bombardier DHC-8 aircraft.

CHART – Air Niugini is the largest operator in Papua New Guinea with a 61.3% share of total weekly seats (top), growing to 65.8% for international seats (bottom) Source: CAPA – Centre for Aviation and OAG (data: w/c 22-Oct-2018)

One would think this once in a lifetime opportunity during the APEC summit would have been an ideal time to meet the challenges (and opportunities) of peak demand with the introduction of the new Chinese route. However, with a relatively small medium range fleet size compared with the international network it serves, two 737 and two 767-300ER as indicated by the CAPA Fleets Database, with one 787-8 on confirmed order, it may seem a new route at the current time is an over extension of Air Niugini’s capabilities and appears to not be in line with current Government aspirations for the state carrier.