PX set to lose its safety record

FOR every step, a sacrifice. And so it is for Air Niugini. The optimist among us would of course say, for every step, a gain. Whether or not the proposed merger of the national airline with Airlines PNG is a step forward or back or whether there are gains or losses only time will tell but immediately there will be one substantial sacrifice.

It is a sacrifice that has nothing to do with the bottom line, which seems to dictate all corporate decisions, but it is one that has endeared the traveller to this airline: safety, the airline traveller’s bottom line. If the national flag carrier is merged with Airlines PNG, gone will be its reputation as the safest airline in the world to fly in.

Through half a dozen go­vernments, ever shifting boards and management since 1973, Air Niugini has doggedly nurtured that reputation.

At the lowest point in its existence that reputation has never been sacrificed. And now, with one fell sweep, without losing an aircraft or a single life in a flying accident, the airline is about to lose that reputation – by go­vernment edict. Pity. At the other end, when Airlines PNG recently floated its shares, many little Papua New Guineans supported the airline with their hard earned savings. They did so knowing full well the turbulent times the airline industry was going through worldwide with heightened security risks as a result of 9/11 and associated terrorism targeting the tra­velling public.

They did so in the knowledge that flying in PNG, as a third level operator, is fraught with problems of costs and accidents. Still they supported because they saw an aggressive, young and vibrant airline that was growing in leaps and bounds. It was taking the competition right up to the national airline domestically and soon enough on international routes. Investors supported APNG in its own right, not because they saw a merger over the horizon.

And the biggest and almost immediate benefit from Airlines PNG long before the first dividend was declared was competitive and lower cost of air travel.

There can be no guarantee, is there, that the merged airline can offer cheaper air fares than that being enjoyed at present.

On the contrary, we need to hear what the current Public Enterprises Minister Sir Mekere Morauta has to say about the allegation by his prede­cessor that when the merger was first proposed last year, one of the reasons given in cabinet was that the merged airline would make money because it would increase airfares.

We cannot see how air fares will be kept low or be lowered in a situation of mo­nopoly except if the go­vernment were to step in and regulate the fares.

In this case, the government would be interfering and re­­gu­lating business in an atmosphere of deregulation and go against the minister’s own desire to corporatise and privatise state entities. Privatising Air Niugini might be in order but to do it by swallowing up the only competition in the country does not seem to be the right way to achieve that goal. There is also a case to be made for caution on privatisation.

In the 1980s and 1990s, there was a move globally to remove government from business, to privatise where it was involved and let business be carried on by those who did it best – the private sector.

Government was to do what it was elected to do – to make laws and policies and regulate. That made a lot of sense and many governments hurried to corporatise and privatise.

After about a decade of that particular wind sweeping the globe, it turned out that there were certain areas of public life where state involvement was crucial and even critical. This was in the area of public services like electri­city supply, water and sanitation, and telecommunication among others. In Papua New Guinea, one could add transportation.

That is because business are driven by the profit motive. In PNG, provision of electricity or communication in the rural areas where the bulk of the population live is unprofitable for any private company to undertake.

It can only be undertaken by the state.

State involvement has to continue in these important areas if the people in the outback were to receive these services. It is crucial. And competition is equally crucial to getting services out to the people. The mobile tele­phone sector is an excellent example of that. The benefits of a monopolised airline industry are unclear at present.

OP/ED The National