ChildFlight air ambulance to be wound up

5.30pm

The Auckland-based ChildFlight Air Ambulance service is to be wound up.

The move follows a High Court ruling yesterday that the Internal Affairs Department could withdraw gaming licences of pubs that provide the major source of income for the operation.

The ChildFlight service operates an airborne, intensive care fixed-wing airplane which last year carried 700 patients, a statement from the ChildFlight trustees said today.

It was the only service dedicated to transporting sick children with specialist staff and equipment from around New Zealand to the Starship and National Women's hospitals.

In yesterday's court decision Justice Harrison ruled Internal Affairs could withdraw gaming licences of pubs owned by a subsidiary of the Auckland Rescue Helicopter Trust (ARHT), a sister trust of ChildFlight.

In the statement today Rea Wikaira, chief executive of both the ChildFlight and helicopter trusts, said it was with considerable regret the trustees of the ChildFlight Air Ambulance announced the service would be wound up following the court ruling.

"It effectively strips us of $4 million in (annual) revenue that is our major source of income and the money that keeps the Auckland Rescue Helicopter and the ChildFlight Air Ambulance in the air," Mr Wikaira said.

The trustees were working to wind up ChildFlight in the shortest possible time.

On the future of the helicopter, he said, "We believe we may be able to continue into the foreseeable future, but that future is far from secure."

The Westpac Rescue Helicopter was established in 1970 and last year rescued 600 people.

In his decision, Justice Harrison outlined the history of the case, saying that since about 1991 a charity called the Goldtimes Foundation, now the Tasman Trust, held a licence allowing it to operate gaming machines at specified sites.

It distributed nearly all its annual gaming profit to ARHT and ChildFlight, organisations the judge said performed a "critical" role among emergency services in the Auckland region.

Justice Harrison said between March 1999 and March 2002 Goldtimes' gross revenue rose from $3.1 million to $9.5 million. But the increase had come at a cost because the ARHT and ChildFlight agreed to pay five site operators for billboard advertising and internal promotion.

Goldtimes distributed 98 per cent of its total gaming machine profit to the two charities, but the two charities then returned about 18 per cent of the same profit to site operators for advertising.

The department decided not to renew the Goldtimes licence, which expressly prohibits financial grants that would result in commercial gains either directly or indirectly to any member sites.

ARHT went on to form a company called Solent Holdings and in December last year Solent bought all the shares in six Auckland pubs.

Justice Harrison said evidence Solent had agreed to subsidise or prop up some of the pubs that were uneconomic "clearly offends" a condition of the Gaming and Lotteries Act which prohibited site operators from receiving financial benefit or commercial advantage from gaming machine proceeds.

- NZPA