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International Air Transport

There is an “open sky” policy of full competition on all domestic routes with airlines being permitted to use aircraft of their choice on these routes, subject to safety and airport capacity and capability requirements.

A phased approach to competition was adopted, first allowing free competition on international routes, followed by free competition on domestic routes by national owned airlines and finally entry of foreign operators into the domestic market, which has not so far been permitted. Fifth freedom rights to foreign airlines were promoted when in the economic interests of PNG. The policy committed to continuing support for the APEC and Forum policies and the Forum States’ plans for joint deregulation within their group of countries.

Bilateral air services agreement were to be negotiated incorporating features of: multiple destinations; multiple carriers; airlines to determine capacity; “double disapproval pricing” of airfares; liberal charter arrangements; and practices that support fair and equitable competition.

Non-scheduled air services for the carriage of passengers, freight and mail were to be decided on a case-by-case basis, having regard to the need to strike a balance between the commercial interests of the existing operators in the market and those of the non-scheduled operator and their clients, while taking into account the overall economic interests of PNG.

International non-scheduled services of a regular or periodic nature conducted by a majority foreign operator were not to be approved unless authorized by law or permitted under an agreement with the Government.

Entry of foreign owned airlines into the domestic market will continue to be subject to a maximum of 49% foreign equity and minimum of 51% PNG national ownership.

PNG participates in the Pacific Forum plan to deregulate air services within the Forum countries and will continue support for the Asia Pacific Economic Cooperation (APEC) and Forum policies for liberalising air services. All PNG carriers will be treated fairly and equitably in seeking access to international markets, with disputes being resolved by the Secretary of Transport.

Domestic Air Transport

The National Government seeks to encourage the private sector to provide a comprehensive range of affordable aviation passenger and freight services throughout the country. Access to the domestic aviation system will continue to be controlled through a licensing system supported by a separate system of safety regulation.

Domestic air services competition will be subject to the following conditions:

  •  Full competition will continue to be permitted on all domestic aviation routes;
  •  Airlines may use aircraft of their choice on all domestic aviation routes, subject to certification through CASA in regard to safety and NAC and PNGASL in regard to compatibility with PNG’s airport and airways infrastructure, present and future (such as aircraft dimensions, tyre pressures etc.);
  •  All air operators in the domestic market, except for those permitted on a temporary basis, must be majority (51%) PNG citizen owned;
  •  Charter services contracted by business and industrial companies, mining companies and others operating within the country will be allowed only if such charter operators enter into a joint venture agreement with a majority PNG owned air services operator. This requirement will be written into all future mining and other major foreign investment agreements; and
  •  The temporary importation of aircraft for operation in PNG, renewable three monthly, will be limited to a maximum of six (6) months in total and will be subject to the prior approval from NAC and PNGASL regarding compatibility with PNG’s airport and air navigation infrastructure and systems.