July 26, 2019 / 8:35 AM / 22 days ago

Papua New Guinea's Air Niugini developing fleet replacement plan for its 25 planes

SINGAPORE (Reuters) - Papua New Guinea’s Air Niugini is looking to replace its entire fleet of 25 planes in the coming years and has sought information from manufacturers and lessors about options before launching a formal tender, its managing director said on Friday.

“Everything is on the table at the moment,” Managing Director Alan Milne, a former Qantas Airways Ltd (QAN.AX) executive who took on the role in November, told Reuters in a phone interview. “The board has asked me to do what we can in the fleet simplification space.”

The airline in 2016 placed an order for four Boeing Co (BA.N) 737 MAX jets that had been due to arrive in two batches in late 2020 and mid-2021 before the plane was grounded globally by regulators following a deadly crash in Ethiopia in March.

Two are meant to replace two 737 NG series planes in operation, but the need for the other two is unclear and they could be switched to Boeing widebodies or Embraer SA (EMBR3.SA) regional jets once Boeing’s deal to buy 80% of the Brazilian planemaker’s commercial division closes, Milne said.

“The 767s, I think one of them is due back (to the lessor) in 2020 so I have got a decision to make,” he said in reference to the airline’s two widebodies. “We can extend the lease. I don’t want to.”

Embraer’s E195-E2 jet visited Port Moresby this week as part of a global demonstration tour. Milne said it was a potential replacement for the airline’s aging Fokker jets. The carrier’s complex fleet also includes De Havilland Canada Dash-8 turboprops.

Air Niugini expects responses from lessors and manufacturers from its request for information soon and will later launch a more formal request for proposal, he said.

The airline in October lost one of its 737s when it crashed into a lagoon in Micronesia, killing one passenger and seriously injuring 6 others.

The pilots disregarded 13 aural alerts as the plane came in to land, according to a report from the Papua New Guinea Accident Investigation Commission released last week.

The accident was caused by pilot error, according to the report, but it did not delve into why the pilots did not abort the landing.

Air Niugini is bringing in human-factors experts to examine relevant safety issues, Milne said, adding the pilots involved were not currently flying but remained employed at least until an investigation was completed.

“Was it a criminal act? No. Was it an intentional act? No. Was there gross negligence? That is what we’ve got to answer,” he said. “That is the bit that we are doing at the moment.”

Reporting by Jamie Freed; Editing by Christopher Cushing

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