In a rare bit of good news from the aviation world, Air Niugini has posted a profit. Papua New Guinea's national carrier made a K500,000 (USD$146,600) profit in the last financial year. It is not a huge amount, but it sure beats a loss and the little airline from PNG now joins a select club of airlines that make money.
Papua New Guinea's financial year runs from 1 January through to 31 December.
What's more remarkable is that the profit follows a K133 million (USD$39 million) loss the previous financial year.
A remarkable turnaround for Air Niugini
The Port Moresby-based airline flies 26 aircraft to 39 destinations. In addition to serving several domestic airports, Air Niugini flies to Australia, Hong Kong, Micronesia, Fiji, the Philippines, Singapore, Vanuatu, and the Solomons.
The airline is attributing the sudden change in fortunes to a transformation program implemented by Managing Director Alan Milne.
The transformation program is called Higher Altitude. Following the profit announcement, Air Niugini Chairman Sir Kostas G. Constantinou, OBE, said;
“With the Board’s approval and support, management has been encouraged to implement a business restructure program. The Higher Altitudes’ results represent the commencement of these efforts, which will deliver positive results for both Air Niugini and Papua New Guinea as a whole.
“The 2019 result is a significant turnaround achievement for the airline, which enables us to continue offering an exceptional service experience for our PNG customers and international travellers.”
The driving force behind the change
The driving force behind the turnaround at Air Niugini appears to be the MD, Alan Milne. A Qantas alumni, Mr Milne has only been with Air Niugini for 18 months but he has brought new rigor to an airline that hasn't always been so polished.
In a statement, Mr Milne said;
“Air Niugini is a good airline but as a team we want to make this a great airline. I think this result is a huge step in that direction."
The transformation program tackled several difficult and entrenched issues at Air Niugini. The business’ cost control, revenue opportunities, customer service improvements and operations went under the microscope.
Unprofitable routes, including those to Bali and Townsville, were dropped. Frequencies to other destinations were changed. Some new routes were introduced, including a direct jet service between Port Moresby and Nadi and flying a 767 between Cairns and Hong Kong (via POM).
There was a review of management systems and an internal organizational restructuring.
A tremendous result against a lot of obstacles
Following the profit, Alan Milne was happy to share the credit. He said;
"This result is genuinely a team effort from everyone, from the baggage handlers to the cabin crew, to the engineers to the executive team and the Board of Directors. Air Niugini is an airline the people of PNG can be proud of.”
And he's right. It might not be a lot of money but it is a terrific result for an airline that faces a lot of challenges.
Air Niugini is based well off the beaten track and not a part of any major airline alliance. It flies a fleet of aging and relatively inefficient aircraft. It operates in an area with relatively poor aviation infrastructure and services a nation where GDP per capita is just USD$2,472. The airline has a history of institutional and cultural inefficiencies. It charges mostly in the local currency, the kina, and pays for its bills mostly in US dollars.
Considering this, it is a tremendous result and a huge coup for Mr Milne and his team. Maybe Etihad could send someone over to Port Moresby and the Air Niugini team could show EY how airline transformation programs are done and profits are made.