When the pilot tried to get more power, the engine did not respond.
The pilot made an emergency landing, but the helicopter struck the ground heavily, became airborne again, and hit the ground again.
The helicopter remained upright with the engine driving a broken main rotor, which caused severe shaking.
An unknown fault caused the automated system that controlled engine power to fail, the commission said.
The fault was intermittent, so although it had occurred before, the company was unable to rectify it.
The commission called for improvements in pilot training, so pilots were more prepared to deal with the risks presented by particular helicopters.
"The way to deal with this sort of engine control unit failure was for the pilot to switch to manual throttle," said the commission's chief accident investigator, Harald Hendel.
"The manufacturer's formal training includes flying with manual throttle, but the pilot did not receive such training in New Zealand, so it's likely the pilot misunderstood manual mode and emergency procedures and was reluctant to select manual mode."
The commission also recommended promoting awareness of the benefits of people wearing helmets in some aircraft.
No one onboard wore helmets, probably because the operator did not have a formal policy on it, the report said.
Since the accident, the company has implemented a policy for pilots to wear helmets on all flights.
- RNZ
