BY GIFF JOHNSON
Marshall Islands Correspondent

MAJURO, Marshall Islands — The loss of an Air Niugini Boeing 737 aircraft in September in Chuuk lagoon combined with the Federated States of Micronesia government’s refusal to allow the airline to carry passengers or freight between the FSM and Majuro has resulted in the air carrier canceling previously announced plans to launch service to the Marshall Islands.

The Marshall Islands and Papua New Guinea signed an air service agreement Feb. 1, 2018 after more than two years of off-and-on negotiations, and PNG’s national airline had announced plans to start service to Majuro late last year. The route would have linked Majuro with FSM destinations and Port Moresby, giving passengers an alternative to flying through U.S. or Australian airports to travel internationally.

Then Air Niugini’s 737 aircraft failed to make it to the runway in Chuuk, crash landing on the lagoon in late September last year. The plane sank within minutes and one passenger died in the accident.

Air Niugini had earlier established a Port Moresby to Chuuk and Pohnpei route, which continues to the present time. The loss of the 737 hurt the airline’s ability to expand to new routes. “Due to losses on our international network, we have reduced or suspended a number of routes since [Oct. 1],” said Air Niugini Managing Director Alan Milne in a recent email to the Marshall Islands government and private sector officials. “As a result, and given the sluggish Papua New Guinea economy, the new board and management team is more cautious about new international expansion than perhaps was the case previously.”

Independent of the loss of the 737 aircraft, the FSM government refused Air Niugini’s request for “local traffic rights to carry passengers and freight between FSM and the Marshall Islands, making the proposed Port Moresby-Pohnpei-Majuro route that was being discussed less attractive to us commercially,” Milne said. “Without the FSM stopover we are not convinced there is sufficient demand to support a direct weekly B737 service between Port Moresby and Majuro, even with some connecting passengers to/from Asia.”

Milne estimated a direct Port Moresby-Majuro route using a 737 would need $3 million to underwrite it the first year, a requirement he asked if the Marshall Islands government would consider supporting for a year or shorter period in order for Air Niugini to be able to “test the market.”

He said the airline had been dealing with “difficult circumstances” in recent months and it still hoped to extend international air service “in [the] future when the business conditions are more favorable.” mbj