Papua New Guinea plans to liberalise its airline sector and gradually implement an "open skies" policy, which will eventually allow full competition on all domestic and international sectors from the country.
"Full competition will be allowed on all domestic aviation routes with airlines being permitted to use aircraft of their choice on these routes, subject to safety and airport capacity requirements," the country's civil aviation minister Don Poyle told local journalists.
Under the plan's first phase, which the country hopes to implement by end-2009, Papua New Guinea could allow foreign airlines to compete on domestic routes.
The second phase will be to "encourage domestic operators to compete against other existing operators" and third will allow "the full entry of international operators into domestic markets". Poyle did not spell out a time line for the implementation of the second and third schemes.
"Foreign owned companies will be allowed to operate PNG's domestic air transport market, subject to them providing evidence that the equity holding of PNG citizens will be 51% within five years of establishing the local operation," says Poyle.
Papua New Guinea is also negotiating an air services agreement with South Korea, says Poyle. This comes after agreements with Fiji, Malaysia and Australia.
The country has two carriers, Airlines of PNG and Air Niugini, which operate on both domestic and international routes. Officials from both airlines were unavailable for comment.
There are also some air charter operators in the country, which has several mountainous and remote areas that do not have a proper road network and require air links.