Air New Zealand claims it did not break the country’s export laws when its unit Gas Turbines was providing engine repair services to Saudi Navy under the third-party contract signed in 2019.
On March 16, 2021, the airline said the Department of Foreign Affairs and Trade confirmed that Gas Turbines, an Air New Zealand’s unit that specializes in servicing military marine engines and turbines, was not required to obtain permits to export the specific type of engines it was working on under the third-party contract with Saudi Navy. The Chairman of Air New Zealand Dame Therese Walsh outlined that the export of the two engines (GELM2500) to Germany for the Saudi Navy did not require any export permits or notification to the Secretary of Foreign Affairs and Trade of New Zealand.
“The advice is that new notification requirements introduced in late 2020 do not apply to contracts entered into before September 2020,“ Walsh pointed out indicating that the airline’s unit signed a third-party partnership contract with the Royal Saudi Navy in May 2019.
Air New Zealand came under heavy scrutiny after an investigation by local media disclosed that the flag carrier’s engineers were allegedly working on Saudi Arabia’s Navy equipment. The investigation revealed information that Gas Turbines has been supporting Saudi Navy while it has been blockading Yemen by stopping food and medicine from getting through to the country. Soon after the reveal, the government of New Zealand announced that the actions of Air New Zealand put the international reputation of the whole country at risk and initiated the further investigation of whether Air New Zealand had breached the export control rules.
At the beginning of the scandal, a spokesman of the airline assured that Gas Turbines had not contracted directly with the Royal Saudi Navy and would not be carrying out any further work of this nature. Meanwhile, Greg Foran, the CEO of Air New Zealand, had apologized to the government on the phone and said that in late February 2021, the airline’s management team 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.”