Papua New Guinea aims to increase air passenger numbers and enhance internal flight connectivity

Improving internal air connectivity has been identified as a priority for government in Papua New Guinea. Under the Medium-Term Development Plan (MTDP) there are a number of key targets to be achieved by 2030. These include: ensuring all 22 national airports meet international safety standards, upgrading 10 domestic airports to handle large jet planes and rehabilitating 50 small rural airstrips in order to ensure adherence to basic safety standards. In February 2019 former Prime Minister Peter O’Neill pledged $13m for airport upgrades. Whether this budget commitment will be kept by his predecessor, the incumbent Prime Minister James Marape remains to be seen.

Uprgrades

The National Airports Corporation (NAC) has set a goal to refurbish at least one airport every two years until 2030. In 2009 the Asian Development Bank (ADB) committed PGK1.8bn ($546m) for national airports under the Civil Aviation Development Investment Programme (CADIP), which was disbursed in three tranches. The first tranche, for the upgrade of Wewak, Hoskins, Gurney, Mount Hagen and Jacksons International Airport, has already been completed. The second tranche, which is primarily for the maintenance of facilities at Girua, Chimbu and Vanimo, is 80% complete as of mid-2019, and the third tranche has been awarded for construction work at nine airports. CADIP has largely focused on constructing security fences, strengthening pavements and extending runways. While the programme was originally due to conclude in 2019, it has since been extended until 2021.

The ADB and the government are now in the process of working on CADIP II, which is expected to be announced by the end of 2020. This is a timely move, as national airports require expansion in order to accommodate the expected increase in traffic resulting from work on the Wafi-Golpu and Papua LNG projects. “I expect a 10% increase in passengers and around a 15-20% increase in cargo when the projects are confirmed in 2020,” Paul Abbot, CEO of PNG Air, told OBG.

Capacity 

By 2030 the government estimates that 9m passengers will take domestic flights annually, equating to nearly a five-fold increase in passenger demand growth. The average annual air freight is around 30m tonnes-km. Sustained GDP growth projection of 8.4% implies an annual growth in freight movement of 8-10%. Even if growth is more modest than expected, the stress on aviation infrastructure will still need to be relieved.

Most regional airports do not have the capacity to handle jets and heavier planes such as the Fokker 100, nor do they have the capacity to operate around the clock. This means planes only fly during daylight hours, putting a tight squeeze on airline operations. PNG Air lost PGK3.5m ($1.1m) in 2018. According to Abbot, the inability to run services after sundown and optimise aircraft utilisation limits the growth of aviation. “Demand will grow once you make it available, however, this change also relies on a number of other factors in the wider social environment to occur,” he said.

Meanwhile, plans are ongoing to tender a public-private partnership (PPP) for the operation and maintenance of Jacksons International Airport. “We are in discussions to decide if we include both the air and land sides of the operations in the PPP, or keep the air side as it is and tender the land side,” Ephraim Wasem, general manager of NAC’s commercial division, told OBG. The air side of the airport’s business operations covers landing fees and terminal parking charges, while the land side includes taxis and duty-free retail. As Lae sets to become a major centre for business, the need for an international airport may be felt more strongly moving forwards. Internal air connectivity remains dependent on national road network improvements, and more than 200 rural airstrips are believed to have become inactive due to lacking road connections. Establishing a network of agriculture cold-chain facilities and last mile connectivity through link roads will be necessary in order to make these viable and help the government reach its goal of enhancing internal air connectivity.

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The Report: Papua New Guinea 2019

Transport & Logistics chapter from The Report: Papua New Guinea 2019

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