Air New Zealand names five other navies it is doing engine repairs for

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Air New Zealand has revealed the other navies whom it has been doing engine work for through its gas turbines unit.

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Photo: RNZ / Samuel Rillstone

It comes after the airline terminated a third-party contract with the Royal Saudi Navy, saying undertaking of that work was “certainly not acceptable” and “not within the values of Air New Zealand” nor New Zealanders.

Since then, the airline has come under increasing pressure to name the other navies which the unit has been involved with.

In a statement, chief executive Greg Foran said engine repair work was underway for the Australian, Canadian, Taiwanese, Turkish and United States navies at its Auckland workshop, but these were now under review.

“Over the past decade, engine repair work has been completed for navies in Australia, Canada, New Zealand, Norway, Taiwan, Turkey, the United States and the recent one-off piece of work for the Royal Saudi Navy,” Foran said.

He said the airline would continue to assess past records, but at this stage these were the ones it was aware of.

“The type of work undertaken for these customers includes the overhaul and repair of gas turbines, the major components of these being gas generators or power turbines for navy ships.”

While the contract dates back to 2019, neither former chief executive Chris Luxon – nor his successor – were ever made aware of the contract because it did not meet the company’s $5 million escalation threshold. Luxon labelled the process “a mistake”.

The airline apologised and commenced two reviews into its processes – an internal investigation and an independent external review carried out by PwC.

Air New Zealand chair Dame Therese Walsh said QC Mike Heron had also been appointed to the review team.

He would “review the licensing requirements for exporting these specific types of engines with the Ministry of Foreign Affairs and Trade”, Walsh said.

“We expect to hear the outcome of that review in the next week.

“The full audit will likely take at least two weeks because we will be going over all the files – in some cases manually kept or paper records – even more deeply to ensure we haven’t missed anything.

“This timeframe will also ensure our external advisors PwC have time to review the findings before the final report is reviewed by the Board at the end of February. Our Board will then provide an update on the findings after it has met.”

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