Air New Zealand Gas Turbines Review – Further Update

Air New Zealand has today received confirmation from the Ministry of Foreign Affairs and Trade that permits were not required for exporting the specific type of engines (GE LM2500) the business was repairing for the Royal Saudi Navy.

Air New Zealand Chairman Dame Therese Walsh says this aligns with advice the airline received from the QC appointed to review the licensing requirements for the engines.

“The legal advice we received from Mike Heron QC is that the export of the two engines to Germany for the Royal Saudi Navy did not require an export permit under the Customs Act, nor did it require a notification to the Secretary of Foreign Affairs and Trade.

“The advice is that new notification requirements introduced in late 2020 do not apply to contracts entered into before September 2020 (when the notification requirement was expanded for certain military related exports). The contract for this Royal Saudi Navy work was in May 2019.”

The independent external review being carried out by PwC on Air New Zealand’s Gas Turbines business is almost finalised, with a report to the Board expected at the end of this month.

Air New Zealand Chief Executive Officer Greg Foran says the internal review is due to be completed shortly and early findings have helped the business to identify opportunities to improve processes.

“In late February we took immediate steps to ensure all future work of a military or government nature is escalated to Executive level for review, including ethical considerations, and approval before a contract can proceed. We will also work with relevant governmental agencies to ensure our understanding of issues for differing jurisdictions is kept up to date.

“For Air New Zealand, business is more than just revenue, we’ve got to make sure the work we are doing fits within our values. Our internal review has seen us change our processes to support us to make the right decisions as an organisation. We are also committed to making further changes pending the outcome of the independent external review.”

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