PNG Air reaches halfway point in fleet renewal exercise, bringing new aircraft to the Papua New Guinea domestic market

17 July, 2017

Papua New Guinea's PNG Air is hallway through an ambitious fleet renewal and expansion programme, which has enabled the airline to improve its product and increase domestic capacity.

PNG Air, formerly known as Airlines of PNG, took its first ATR 72-600 in Nov-2015. It used the occasion to complete a rebranding exercise, introducing a new livery and logo.

PNG Air has since taken delivery of another five ATR 72-600s with the sixth aircraft arriving in late Jun-2017. The airline initially placed an order in 2014 for seven ATR 72-600s and 14 options. In Nov-2016 it exercised five of the options, which will give PNG Air enough ATR 72-600s to phase out its fleet of ageing Dash 8-100s.

PNG Air expects to phase out its Dash 8 fleet by 2022, at which point it will be operating all 12 ATR 72-600s. The airline is slowly transitioning to the ATR 72-600 as it cannot entirely phase out the Dash 8-100 until a new short takeoff landing (STOL) variant of the ATR 72-600 becomes available in 2020. Several of the smaller airstrips in Papua New Guinea cannot be accessed with the current version of the ATR 72-600 and are now served by PNG Air with its remaining Dash 8-100s.

PNG Air initially had a fleet of 17 Dash 8-100s and has so far phased out eight of the aircraft. While the airline is reducing the total size of its fleet from 17 aircraft in 2015 to 12 aircraft by 2022 its capacity in Papua New Guinea's domestic market will increase as the ATR 72-600 seats 72 passengers compared to 36 passengers on the much smaller Dash 8-100.

PNG Air, which in recent years has captured a 20% to 30% share of the Papua New Guinea domestic market, aims to increase market share as the ATR 72-600 fleet expands. PNG Air is the second largest airline in Papua New Guinea after Air Niugini.

Air Niugini recently completed a transition to an all jet fleet, which has resulted in several domestic routes and short haul international routes to Queensland switching from 74-seat Dash 8 Q400s to 80-seat Fokker 70 regional jets. Air Niugini has acquired nine Fokker 70s, seven of which have been delivered, and returned six Q400s. Air Niugini continues to serve smaller domestic routes with 37-seat Dash 8 200 and 50-seat Dash 8 300s, which are operated by its subsidiary Link PNG.

Air Niugini is now touting its all jet product on the main domestic trunk routes. However, PNG Air's ATR 72-600s are much newer than Air Niugini's Fokker 70s, which are more than 10 years older than the Q400s they replaced. PNG Air is also using ATR 72-600s on some of the routes Air Niugini serves using Link PNG-operated Dash 8s - and over the next few years the entire PNG Air network will transition to ATR 72-600s while Air Niugini will continue to use older turboprops on smaller routes.

All the Fokker 70s Air Niugini has acquired are at least 20 years old. The average age of the Link PNG Dash 8 fleet is also over 20 years, according to the CAPA Fleet Database. Air Niugini's ATR 72-600s are brand new, representing a drastic improvement over their Dash 8 100s, which are all at least 20 years old.

See related article: Air Niugini goes all-jet all the time

New aircraft are unusual for the Papua New Guinea domestic market. Offering an increasing number - and eventually all its flights - with the new generation ATR 72-600 enables PNG Air to significantly improve its product and reliability. PNG Air is hoping this turns into a competitive advantage and results in market share gains.

PNG Air also has been looking at using the new ATR 72-600 fleet to resume international services. The airline dropped international services in 2013, when it suspended flights to Cairns.

If market conditions are favourable the airline may resume Cairns and launch services to eastern Indonesia. However, PNG Air does not have big aspirations for the international market, which Air Niugini is better able to serve with its all-jet fleet including 737s and 767s. PNG Air plans to stick with an all turboprop fleet and is focused on improving its position in the domestic market, where PNG Air and Air Niugini have similar networks with 24 destinations each.

PNG Air network