PNG Air CEO Update

Transcript

Muralee Siva:So I think first of all, it'll be good for you all to look at the rebrand itself, the livery and the logo. So what we've done is when we went for the new aircraft, our focus was to go— our theme was next-generation airline. Like if you look at PNG, you've got a huge young population. And also PNG is a country pretty traditional and a lot of traditional links. So what we did was we gave the scope for the branding company to come out with something which links the future with the traditional links in the country. So if you look at the actual brand itself, it basically comes out with that. So what they did was took off different parts of the country's traditional links and modernised it. and came out with this amazing brand. So I'll obviously ask you all to have a look at the livery, which will give you a bit more on the brand itself. The response has been pretty strong, and I still have people who come to me and say, like, we never thought it'll be something like this, but when we saw that, it's something out of this world, like pretty modern, future-oriented. Exactly. And also it links with the business model we have. We are growing the airline, and improving the product and start, you know, looking at the future. So it's a very future-oriented, modern, younger sort of brand, which is reflected from the feedback we are getting from the customers. So we had 14 Dash 8-100s when we started the refleeting. We've delivered 3 ATR 72-600s and we have 4 more to come. And so at this stage we've got 10 We had 5 Dash 8s, so we returned 4, and have 3 ATRs operating. So by end of next year, we'll have 7 ATRs, and we have plans to return more aircraft. And our plan long-term is to have 10 to 12 ATRs by 2020, 2021. So that's, that's our plan. It's been amazing because the product itself is one of the best domestic regional aircraft you can have. And that's reflected from the comments we get. It's a pretty— if you sit in an ATR, it's a pretty, you know, the noise is non-existent compared to a typical turboprop aircraft. It's pretty comfortable, and that's reflected from the passenger response. And again, if you look at a new aircraft, and that's something which passengers love, and that's reflected in the marketplace as well. And the fact that we have only 3 now, it's not there yet. So hopefully by end of this year we'll have 5 operating. By that time we'll have more ATRs compared to a Dash 8, so that'll even improve. So I think the response, in one word, has been pretty good. Obviously the reliability is a huge factor because if you look at Papua New Guinea, we have interesting— like, you don't have maintenance bases all over the country. We operate to 25 places. 24, 25 ports, we have only one maintenance, which is Port Moresby. So when you have a reliability problem and you ground an aircraft away from the maintenance base, it really upsets the whole schedule. So when you have a very reliable aircraft, that really helps the schedule integrity, on-time performance, which is important. And so that gives us that edge compared to the competition, obviously, in terms of on-time performance. that's a huge thing as well. And also, if you look at our product previously, it had been Dash 8, so we couldn't compete with the Q400s and the Fokkers which is offered by the competitors. So this gives us the option to have that market as well, so we can compete on other markets, new markets. So the market has been growing at a pretty high rate, like double-digit rates. till about 2012 from 2007-8. That's big growth, but it's plateaued a bit now because one of the major projects, which is the Exxon gas project, has been completed. So that's plateaued with the oil price coming down as well. We think with a few new projects coming up next year and, you know, year after, that will really restart the growth, and that will be a pretty high growth as well for the domestic market. So we think we'll start the double-digit growth in the domestic market over the next 5 to 10 years. We got out of the international markets in 2013. We were flying to Brisbane with a codeshare and Cairns to focus on the domestic product and domestic strategy. We've completed that, or we're in the process of completing that. So this is the first stage of the international growth, going to Jaipur from Hagen, which is the mountain Hagen, which is the capital in the Highlands region. The reason we selected that is it's a new route, it's not operated by our competitor, so that gives us opportunity to create this new demand rather than trying to share the existing demand. And the main focus is that if you look at the geography of PNG, Highlands is where a large part of the population live. So that's where we give them an option rather than coming to Cairns or Brisbane or Singapore. They have a 1.5-hour flight just across to it for basic commercial and business needs and tourism needs. So that's where we thought that market we can generate or that demand we can generate. Like if you see what happened 3, 4 years ago where they were expecting huge growth you know, in 2015-2016. That didn't happen because the oil price coming down. But in terms of comparison, we still having good GDP growth around 3 to 4%, and it's a bit hard to predict in terms of going forward. It all depends on next year's, the new projects starting. I think we still think we'll achieve 3 to 5 year, 3 to 5% GDP growth over the next 5 to 10 years, and I would think it'll surprise us on the upside. So cargo in PNG is pretty important. It's compared to even domestic markets, it's compared to regional operators in Australia, it's a much higher percentage. Our cargo percentage will be about 20%, and it's not something which is a pure cargo market, it's with the normal operations, so which is pretty high. And for us, at the moment we're using the Dash 8 for the cargo. We've got the option to use the combis, but since we have only 3 aircraft, we're not using that. We're using it for the passengers. But in the long term, when we replace the Dash 8, we'll start moving into this combi operation to use the freight services, for the freight services.

Copyright policy: All transcripts on this site are the copyright of CAPA - Centre for Aviation. Our reproduction policy is as follows: you may quote up to 400 words of any transcript on the condition that you attribute the transcript to CAPA - Centre for Aviation and link to the original video page. All other use is prohibited. While we aim for 100% accuracy in the transcript, there may be some minor transcribing errors.