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Tuesday, 16 November 1976

The considerations of Ministers set out below are subject to final approval by the Papua New Guinea and Australian Governments.

Ministers agreed that a commercially viable national airline should be set up as quickly as possible, on or before 1 December 1 973. It was felt by Ministers that it would be appropriate that Papua New Guinea should go into selfgovernment with its own national airline.

It was agreed that the Papua New Guinea Government would take up 60 per cent of the equity in the national airline, that the Australian Government nominees would take up 24 per cent and that 16 per cent would be offered to Ansett Transport Industries Limited.

The Papua New Guinea Ministers pointed out that ATI was a private enterprise which has considerable investments in Papua New Guinea. This indicated confidence in the country's future. It was therefore considered appropriate that ATI be offered an equity in the new national airline.

Papua New Guinea Ministers were also conscious of the contribution that had been made by the Australian Government through Government airlines and the Department of Civil Aviation in establishing efficient aviation services and facilities, and the Ministers welcomed the involvement of the Australian Government in the new airline.

The Australian Government would give immediate consideration to financing the Papua New Guinea equity purchase by providing a special low-interest loan. The Papua New Guinea Government would have the right to acquire the shareholding of the other participants, at par as and when it desired to do so, proportional to their percentage holdings.

On the assumption that ATI agrees to participate in the airline that company would have the right to nominate one member to the board of the national airline, the Australian Government would have the right to nominate two members, and the Papua New Guinea Government would have the right to nominate four members to the board, including the chairman whose appointment would be agreeable to all parties.

The Ministers agreed that any significant change in the operating principles and policy of the national airline, as specified in the terms of this communique, would be subject to the agreement of both Governments.

The Ministers agreed that managerial skills already available in Papua New Guinea should be fully utilised. As agreed between the previous Australian Government and the Government of Papua New Guinea in September 1972, the top management of the airline should be provided by Qantas.

It would be the responsibility of the national airline to absorb all existing TAA and AAPNG staff in Papua New Guinea who seek to continue employment with the national airline. Further, there is to be clear understanding with the unions that where initial over-manning of positions occurs it shall be agreed that, in time, this will be adjusted by natural wastage.

It was re-affirmed by the Ministers that training programmes would be intensified so that the move to complete control and staffing by Papua New Guineans would be achieved as quickly as possible.

Both Governments agreed to the immediate establishment of a task force to work out the detailed requirements for bringing the airline into operation by the target date.

Australia offered to help provide any specialist staff who might be required for this purpose.

Pending independence, at which time a bilateral agreement governing air services between the two countries would be negotiated, the Australian Government agreed to the Papua New Guinea airline operating under its own identification on the Port Moresby/Brisbane route, with capacity equal to that of Ansett and TAA combined. It was envisaged that the Papua New Guinea airline 's share of capacity would be leased from the Australian carriers. The Ministers agreed that no Australian domestic airline will be permitted to operate international air services out of Papua New Guinea.

The Australian Ministers also agreed to explore with Qantas the possibility of a pooling agreement with the Papua New Guinea airline, covering Papua New Guinea/Australia traffic carried on their combined services following independence, and with the Australia domestic operators prior to Qantas' entry onto the route.

The Australian Government re-affirmed its willingness to provide, on an agreed agency basis, aviation facilities and services and skilled personnel as required.

Papua New Guinea Ministers noted the contribution that was being made by skilled DCA personnel, both in daily operations and in the development of training programmes to provide for localisation as soon as possible.

DCA would transfer all its existing aerodromes, navigation facilities and other assets, mutually agreed, to the Papua New Guinea Government at no cost. The total value of these assets is approximately $24.5m. Aerodrome works at Post Moresby and Nadzab, involving an estimated expenditure of $ 13.5m, would proceed as planned, with costs being met by the Australian Government.

All Ministers expressed satisfaction with the agreements which had been reached and looked forward to continued close co-operation in the establishment of an efficient national airline and civil aviation system for Papua New Guinea.

Hon. W. L. Morrison, MP







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