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PORT MORESBY, Papua New Guinea (May 1, 2000 - The National/PINA Nius Online)---More than 200 jobs will be axed at Air Niugini as the airline restructures to save costs and improve its performance.

Managing Director Andrew Ogil said a working committee comprised of senior managers has been formed to carry out the restructure.

Already, a number of employees have been retrenched and a number of offices closed to save costs.

"The current retrenchment exercise being implemented by Air Niugini is part of phase three of the ongoing organizational restructure to trim the airline's workforce to a desired staff ceiling as well as the reassessment of other areas of cost savings," Mr. Ogil said in a statement.

"The (working) committee has been actively reviewing the company's manpower structure in consultation with management of all divisions over the past three weeks and has identified certain areas where staff reductions are going to take place.

"Phase three will initially affect about 200 employees throughout the airline's network. The restructure process however is ongoing and will continue to review and reassess the appropriate manpower requirements for the company.

"Apart from reduction in staff numbers, management will also consider other areas where cost cutting can be achieved such as through the outsourcing of non-core airline activities and more improved ways of performance."

Mr. Ogil said in some areas the company would continue to recruit, especially in areas where generation of revenue is paramount.

"Improved technology is also a likely outcome of this exercise because it will contribute to efficiency and productivity," he said.

He said that although this would initially involve some financial outlay, the long-term benefits would result in significant savings for the company.

Mr. Ogil said as the restructure is still in progress, it is not known exactly how much the airline will save through the retrenchment exercise.

But he said he was confident the exercise will result in improved financial performance of the company, work output, and overall productivity.

Mr. Ogil described the retrenchment exercise as "absolutely necessary" for the survival of the airline, and added that he was confident the restructure will address the needs and challenges that lie ahead and will position the flag carrier as a viable commercial entity.

Air Niugini is in such a bad financial situation it borrows from the National Government to stay afloat. The airline is earmarked for privatization under the government's privatization program.

For additional reports from The National, go to PACIFIC ISLANDS REPORT News/Information Links: Newspapers/The National (Papua New Guinea).

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