PNG's Air Niugini Cancels Its B787-8 Order

Why It Matters

The cancellation forces the state‑owned airline to reassess its fleet renewal strategy, impacting regional connectivity and Boeing’s order book in the Pacific market.

Key Takeaways

• Air Niugini cancels two Boeing 787‑8 aircraft orders.
• B767‑300ER fleet to exit service in 2026 without replacement.
• New CEO Alan Milne returns, focusing on profitability and privatisation.
• Earlier board cautions cited “changing circumstances” for order review.
• Airline explores bridging lift capacity options pending new aircraft delivery.

Pulse Analysis

Air Niugini’s abrupt cancellation of its 787‑8 order underscores the financial tightrope that many Pacific carriers walk when modernising ageing fleets. The B767‑300ERs, which have served the airline for decades, are due back to lessors this year, and the loss of a direct replacement threatens route continuity on high‑yield international sectors. For Boeing, the withdrawal of two Dreamliners from a government‑backed customer dents its growth narrative in a region where demand is modest but strategically important for market diversification.

Without the 787s, Air Niugini must bridge the capacity shortfall through interim solutions. Its existing mix—A220‑300s, 737‑800s, and a robust turboprop fleet—offers some flexibility, yet the wide‑body gap limits long‑haul ambitions. Leasing a used wide‑body or accelerating the acquisition of additional A220‑100s could preserve service levels while the airline evaluates longer‑term financing options. Competitors such as Qantas and Virgin Australia are expanding low‑cost offerings into PNG, raising pressure on Air Niugini to maintain competitive frequencies and fare structures.

The leadership shuffle adds another layer of strategic recalibration. Alan Milne’s return, coupled with the board’s stated intent to prepare for partial privatisation, signals a shift toward commercial discipline and potential external investment. Milne’s experience with regional operators may help craft a sustainable fleet plan that balances cost, performance, and market demand. Investors will watch closely for any partnership or financing deals that could reshape the carrier’s asset base and restore confidence in its growth trajectory.

PNG's Air Niugini cancels its B787-8 order

By Dirk Andrei Salcedo · 18 Feb 2026

Air Niugini (PX, Port Moresby) has cancelled its order for two Boeing 787‑8 aircraft, according to Boeing orders and deliveries data for January 2026. The move leaves the state‑owned carrier without a confirmed replacement for its B767‑300ER fleet, which is scheduled to exit service this year.

Both B767s are due to be returned to lessors in 2026 upon lease expiry. The B787s had been intended to directly replace these aircraft and open new routes to Asia, Australia, and New Zealand.

The cancellation aligns with earlier caution expressed by the airline’s board. In a January 2025 press release detailing the carrier’s refleeting programme, chairman Karl Yalo noted that while the government had previously approved the purchase, “changing circumstances” had compelled the airline to review the agreement.

However, Air Niugini then‑chief executive Gary Seddon told ch‑aviation in May 2025 that the commitment remained “intact” and was central to the carrier’s long‑term international strategy, although he acknowledged the delivery timeline had slipped to late 2027. Seddon said at the time that the airline was “actively considering bridging lift capacity options” to ensure operational continuity.

ch‑aviation data shows that Air Niugini operates a passenger fleet comprising two A220‑300s, three B737‑800s, two B767‑300ERs, eleven Dash 8 turboprops, five F100s, and four F70s. It has remaining commitments for eight A220‑100s directly from Airbus Canada.

Leadership change

Meanwhile, Air Niugini announced on 16 February that Alan Milne would return as CEO, replacing officer‑in‑charge Samiu Taufa, who has led the airline for the past six months after the departure of Seddon.

Milne, who previously led Air Niugini from 2018 to 2020, joins from Skytrans (2025), where he served as chief executive until 2025. He is also the owner of East Air (Australia), having acquired the entity from Townsville Airlines in 2025.

“In the short term, Mr Milne and his team will be focused on maintaining and enhancing operations and profitability,” Yalo said. “In the medium term, we will prepare Air Niugini for initial partial privatisation at the right time.”