Airfares in and out of PNG used to be astronomical! Competition has been the best thing that has happened to PX, they now run more efficiently and actually turn a profit. PX need APNG as it has made them improve and the people of PNG are the ones that have benefited the most.
There won't be any 'merger', however I do think the PNG govt need to buy into APNG and run a few auditors through the place. Then throw 'em a few more aircraft/refleet and let 'em loose.