Papua New Guinea's National Executive Council has approved a government guarantee for the national airline, Air Niugini, to enable it to proceed with a code-share arrangement with Australian carrier Qantas.
Prime minister, Sir Meker Morauta, says the code-share arrangement is neccessary for the financial future of the airline.
Sir Mekere says a temporary code-share arrangement between the two airlines from October last year to February this year, proved very sucessful in terms of increased revenue.
He says the airline now wishes to enter into a five-year agreement beginning in September. Sir Mekere says the airline will need to borrow nearly 11 million US dollars, to lease a new boeing 767 aircraft, provide maintenance, retain staff and secure working capital.
Sir Mekere says the go-ahead for the code-share would coincide with a significant restructuring of Air Niugini management and its finances, prior to privatisation.
