Pacific Aerospace liquidation turbulence spreads

Operators of New Zealand’s agricultural aviation fleet are worried about being grounded because they can’t access parts and maintenance for their Pacific Aerospace-made aircraft as the company’s liquidation sale drags on.

At least 51 of the national fleet of 80 or so aircraft are made by Hamilton’s Pacific Aerospace, in interim and then full liquidation since February 12.

Parachute sport operators using its aircraft could also be affected.

The Civil Aviation Authority has confirmed to the Herald it provided the liquidators with advice on the requirements that needed to be met to sell already-produced parts, sitting on Pacific Aerospace’s shelves near Hamilton airport.

“However the liquidators did not commit to proceeding with this course of action,” a CAA spokesman said.

CAA said the concerns of Pacific Aerospace aircraft operators won’t be limited to rural topdressing and spraying operators.

Parachuting operators may also feel the effects coming into the Easter holiday and the potential relaxation of border controls to allow Australian visitors, the spokesman said.

“We’re aware that agricultural operators are experiencing high levels of autumn demand and effects may be further felt by the parachuting industry coming into the Easter holiday, and the potential opening of quarantine-free transtasman travel.

“Aircraft maintenance schedules include requirements based on the time the aircraft and individual components have been used, and increased activity at this time will mean maintenance milestones come up more quickly.”

At least 400 Pacific Aerospace aircraft are operating overseas.

Liquidator Steven Khov of KhovJones said the situation wasn’t a matter of “selling parts that were in the store room”.

After asking the CAA what would be required to potentially manufacture parts to achieve a partial lifting of the current (CAA) certificate suspensions, Khov said he and fellow liquidator Kieran Jones received requirements and assurances they personally had to undertake.

The process included making an application to CAA and, if partial lifting of the suspension was allowed, CAA would have had to verify the activities of the business.

“Therefore unfortunately this was not as straightforward as selling parts that were in the storeroom.”

CAA told the Herald it asked the company and liquidators to assure there would be enough funds to ensure safe and secure storage so parts didn’t degrade; access to tools, facilities and equipment, and that adequate staffing was maintained to support the activities.

Meanwhile, there’s also concern in the sector about the loss of Pacific Aerospace’s highly skilled workforce to other industries as the liquidation continues.

About 95 staff are understood to have been laid off by liquidators some time ago. Many had been with the iconic planemaker for many years. Several are understood to have taken their transferable skills to other sectors because they couldn’t wait any longer to know if the operation had a future.

New Zealand Aviation Association chief executive John Nicholson said it was expected a number of skilled people would leave the sector in the aviation downturn.

“They’ll leave to do other things and never come back so they’re lost to aviation, whether they’re a pilot or a highly skilled engineer. And a lot of people at Pacific Aerospace are highly skilled with transferable skills.

“That impacts on Pacific Aerospace’s ability to get up and running again quickly.”

Liquidator Khov said a number of parties had expressed interest in the company and engagement with them and various stakeholders was continuing.

“Given the complexity of the file and the stakeholders involved, we are progressing the file as quickly as we can. Whilst this may seem long, we have limited control of the speed in which things happen.”

Pacific Aerospace, whose legacy companies date back to 1946 with previous financial tailspins, was 50 per cent owned by a subsidiary of state-owned Chinese giant Beijing Automotive when it was put into liquidation. New Zealand shareholders owned the other half, in the name of Pacific Aerospace Group.

On the loss of skills from the company, Khov said it was unfortunate but not within the liquidators’ control.

“The position with staff is unfortunate as the company’s cash flow position gave us extremely limited options as to what we could do. It was also unfortunate that the business was no longer trading at the time we became involved.”

Nicholson said as at December agricultural-use aircraft made by Pacific Aerospace operating in New Zealand comprised 25 Crescos, 20 Fletchers and six P-750s.

“Take them out and there’s not many left.”

Nicholson said to his organisation’s knowledge no agricultural aircraft operator had yet been grounded by the liquidation but concerns had been expressed.

Some operations were certified by the CAA and Pacific Aerospace to make their own parts.

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