Air National has ceased flying to protect its remaining assets and says there will be job losses.

The charter airline has criticised the length of time a Civil Aviation Authority (CAA) investigation took, while the CAA said it was continuing to investigate the airline even though it has relinquished its air operator certificate.

The Director of Civil Aviation, Steve Douglas, said he received a letter from the company yesterday voluntarily asking him to revoke its certificate and he revoked it immediately.

As many as 40 staff could lose their jobs as a result, The Dominion Post reported.

Air National chief executive Jason Gray said job losses were inevitable without saying how many.

The decision to relinquish the certificate was taken to protect the future commercial viability of the airline's assets, and to give some certainty to the staff.

Air National operated New Zealand's largest charter airline with an accident free record for the past 20 years and had always maintained its aircraft and conducted its operations to the highest safety standards.

"The CAA's process over the past six weeks showed a distinct lack of objectivity and despite reasonable offers to co-operate with the CAA to re-establish operations and address any issues they may have, it became apparent that the CAA was unwilling to consider any alternative course for the airline," Gray said.

Air National was founded in 1989 and provided daily return services between Christchurch and Oamaru, and Christchurch and Hokitika for Air New Zealand Link, as well as charter services, according to its website.

The airline has been in the courts fighting the CAA after it was suspended for ten days by the regulator on January 28. The suspension was extended twice.

Douglas said that the CAA would continue to finalise its investigation of Air National.

Air National had a high risk profile because of the number of serious findings by the CAA over recent years.

In November, the CAA notified Air National that, because of safety concerns, an in-depth audit of the operator would commence in January 2011.

The audit was initially scheduled for January 11 but was delayed until January 26.

Between January 26 and 28, CAA auditors found evidence that Air National falsified documents relating to pilot training and that at least one pilot had been flying in breach of the Civil Aviation rules.

CAA started a full investigation into the operator which uncovered additional safety issues.

On March 4, the CAA received the draft final investigation report, which was forwarded to Air National for comment.

The CAA was analysing Air National's response when Air National voluntarily ceased all air operations and requested the revocation of its air operator certificate.

"I am committed to seeing this process through to the end. I anticipate receiving the final report on Air National early next week," Douglas said.

- NZPA