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PORT MORESBY, Papua New Guinea (August 17, 2000 - The National/PINA Nius Online)---The government will encourage full competition on all domestic aviation routes, while foreign-owned companies may operate in the domestic civil aviation market subject to increasing PNG citizen equity participation to 51 percent within five years, Transport and Civil Aviation Minister Bart Philemon said.

Mr. Philemon said the deregulation of the domestic aviation industry would result in a reduction in domestic airfares, with price control regulations no longer justified. He unveiled the Civil Aviation Policy 2000 statement to Parliament yesterday, adding that the government would continue to ensure that PNG is a safe place to fly.

"The state will implement all its international and domestic safety obligations. Aviation safety regulations will be carried out with a high degree of independence from the industry," he said.

He said that with deregulation of the domestic aviation industry, a policy of user pays would be introduced and the continued regulation of airfares would no longer be justified.

He said the removal of price controls would allow for a reduction in airfares as competition increases.

Price control of domestic airfares would be reviewed from time to time in full consultation with the Price Controller to reflected legitimate costs to the aviation industry, he added.

Mr. Philemon said access to the domestic aviation system would be controlled through a licensing system supported by a system of safety regulation.

"I want to remind the honorable members that civil aviation is vital to our country. We must have a safe, effective and efficient industry to service the transport needs of our country. The industry will be an enabling factor in the social and economic development of our country and its people."

In relation to international aviation, Mr. Philemon said foreign airlines would be encouraged to serve Papua New Guineans with a more flexible and liberal international aviation policy that promotes the development of bilateral deregulated markets and the granting of fifth freedom rights to foreign airlines.

He said PNG would participate in the Pacific Forum countries' plan to jointly deregulate air services to encourage economic growth.

"PNG airlines wishing to be designated under the bilateral agreements may be 49 per cent offshore with 25 percent being the maximum share holding by a single foreign airline."

In relation to infrastructure and airline ownership, Mr. Philemon said the government would participate in the ownership and control of PNG airlines and aviation infrastructure to the extent necessary to ensure that national interests and objectives are protected. 

He said PNG international airlines should be at least 51 percent effectively owned and controlled by PNG citizens.

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

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