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Home / New Zealand

Former Air NZ boss Chris Luxon says military contract process was 'a mistake'

RNZ
11 Feb, 2021 08:06 PM3 mins to read

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Former Air NZ boss Chris Luxon admits it was a mistake that there was no process to escalate military contracts. Photo / Jason Oxenham

Former Air NZ boss Chris Luxon admits it was a mistake that there was no process to escalate military contracts. Photo / Jason Oxenham

By RNZ

Former Air New Zealand boss Chris Luxon admits not establishing a process in which the airline's chief executive would be told about all military contracts was a mistake.

Pressure has been mounting on the national carrier, following revelations its gas turbines unit had been working on engines for the Royal Saudi Navy.

Air New Zealand has since apologised and started two reviews - and there are calls for Parliament's Foreign Affairs Committee to hold a separate independent investigation.

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Luxon, who is now a National MP, said he was happy to assist those inquiries.

"It's a $6 billion company. Every day there's lots of commercial contracts and arrangements being forged and clearly in the context of all of that, this is a small contract.

"It certainly didn't come to me as the CEO or my own executive team, the people who reported to me in my last four months with the company, and obviously as you have heard from Greg [Foran] ... it hasn't come to him and his team in the 18 months since I left the company. But the bottom line here is, clearly it was a mistake ... and so if there is any way I can facilitate help I am very happy to contribute to that," Luxon said.

The contract dates back to 2019, but neither Luxon - nor his successor - were ever made aware of the contract because it did not meet the company's $5 million escalation threshold.

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Not establishing a process in which the airline's executive team were alerted to all military contracts was "clearly a mistake", Luxon said.

"Clearly it would have been great to have been made aware of it, in hindsight," he said.

Air New Zealand chief executive Greg Foran yesterday was asked to name the full list of countries whose militaries have contracts with Air New Zealand.

He has previously told RNZ Air New Zealand still had "about 10-20 contracts still ongoing in regards to engines for militaries, involving about five or six countries".

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Air NZ CEO Greg Foran says the company's work for the Saudi military was a case of "poor judgement". Photo / Mark Mitchell
Air NZ CEO Greg Foran says the company's work for the Saudi military was a case of "poor judgement". Photo / Mark Mitchell

When asked which countries they were, he could name the United States, Australia and New Zealand but no others.

"They're the ones I'm clear with at this point ... I haven't had a chance to get into all that level of detail," he told reporters.

Foran said he wanted to take time to gather the relevant information before making definitive statements about past or present contracts.

Luxon said the only military contract of "any consequence or size" he was aware of while chief executive was the airline's deal with the US. He could not name any others.

Luxon said making chief executives aware of the company's military contracts would be a "good challenge" moving forward, as well as considering the ethical ramifications of such deals.

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