Papua New Guinea's transport and civil aviation minister wants Air Niugini (PX, Port Moresby) and PNG Air (CG, Port Moresby) to pay off legacy debts owed to the National Airports Corporation (NAC).

Walter Schnaubelt told Port Moresby-based media outlets last week that "it is now necessary that operators such as Air Niugini and PNG Air make timely payment of the aeronautical charges to sustain the safety of aircraft operations into NAC-controlled airports," he said.

The reports did not say how much PNG Air owed the NAC, but they did say the larger Air Niugini owed the state-owned airport operator PGK120 million kina (USD32.2 million). Schnaubelt said Air Niugini had entered into a deed of settlement in May 2023 to pay down its debt, and while monies were forthcoming, the total debt had grown.

"NAC is in dialogue with ANL [Air Niugini Limited] to amicably resolve the outstanding debts," the minister said. "Given the re-fleeting programme at Air Niugini involves the introduction of heavier aircraft, the impact on the existing aircraft pavement and passenger facilities will be significant," he said.

However, Air Niugini's acting CEO Gary Seddon told The Nation newspaper that the airline was gradually paying down its NAC debt, saying it had paid PGK90 million (USD24.1 million) this year. "Air Niugini has been paying NAC between PGK1.3 million (USD347,000) and PGK1.5 million (USD402,000) each week," he said. "In addition to this, Air Niugini has agreed to pay PGK38 million (USD10.2 million) in final settlement of legacy debts between the parties."

The state-owned carrier operates 27 aircraft, of which around half are parked, and flies to 30 destinations in nine countries. Since the start of the year, it has actioned re-fleeting plans, ordering two B737-8s in June and committing to eleven A220s earlier this month. In addition, it is leasing several other aircraft to plug short-term capacity gaps.

The smaller PNG Air is finalising a debt restructuring agreement and aiming to exit a formal restructuring programme by the end of the year. It operates thirteen ATR - Avions de Transport Régional and Twin Otter types and flies to 22 airports within Papua New Guinea.