The academy will continue to operate until mid-2026. Photo / NZME
An independent review of Whanganui’s commercial pilot academy has been recommended for approval as the facility faces an $11 million loss.
The New Zealand International Commercial Pilot Academy (NZICPA), owned by Whanganui District Council, will cease operations by the end of June.
Elected members voted 5-2 for the review at an extraordinary council-controlled organisations and economic development committee meeting on Wednesday.
The committee’s recommendation will be considered at the full council meeting on March 24.
Those in favour were Whanganui Mayor Andrew Tripe, independent chairman Andrew Turner and councillors Glenda Brown, Mike Hos and Julie Herewini, with Deputy Mayor Michael Law and councillor Rob Vinsen against. Councillor Kate Joblin was absent.
Tripe said while he was not on the council when the academy began, he could understand why the original purchase was made.
The council, via its commercial arm Whanganui District Council Holdings, bought Flight Training Manawatū for $800,000 in 2015.
“There were brutal external shocks that affected the flight school,” Tripe said.
“What we are doing now is saying ‘Enough is enough’ and ripping the Band-Aid off.”
The academy was down to 19 students when borders were closed at the height of the Covid-19 pandemic but continued to operate with help from two council loans of $150,000.
Council chief financial officer Mike Fermor said the council was at “another major crossroad” when the NZICPA had its Part 141 certification suspended last June during a safety investigation by the Civil Aviation Authority.
But closing was deemed unacceptable, he said.
“We would have lost considerable funds from the perceived fire sale of our assets.
“Students, who had invested a lot in training, would have been sent back home with no alternative and we would have had no academy operating in Whanganui.”
Council funding of $1.2m and $1.1m to support the NZICPA was signed off in August and September, respectively.
Fermor said $11m was “a large number”.
“We need to give the community assurance of transparency and that council is prepared to learn lessons.
“The community can only have that assurance if the review is conducted by an independent party.”
He said the first step was for officers to bring the review’s terms of reference to the committee for discussion.
A council report said the cost of the review could be between $50,000 and $100,000.
But Fermor said that was “a very high-level estimate”.
“The first stage is to determine the terms of reference. That will inform us what the likely cost will be.”
Interim chief executive Barbara McKerrow said it would be unusual for a local authority not to seek some form of review after announcing “a loss of this size”.
“Today’s council doesn’t necessarily know that full history, nor do the officers who work here,” she said.
A recommendation moved by Law to cap the review cost at $20,000 was lost 5-2, with Law and Vinsen voting in favour.
Law said by not having a budget, councillors were “omitting your responsibilities as governors”.
“If you don’t like the cap, put an amendment in right now for a bigger cap.
“But at least lead, don’t follow.”
Vinsen said the council already knew the academy’s history and the decisions made, and professionals had been involved.
“I personally don’t believe we even need an independent review,” he said.
“The new chief executive [Doug Tate] coming in could be as independent as we need.”
Hos said it would be “an embarrassment” to approach a company with a $20,000 cap.
“Most places I would think wouldn’t even be interested,” he said.
“The basics are there. We know it’s failed and we know some key reasons but there are going to be some really good learnings out of this.”
The New Zealand Airline Academy has now taken over most of the NZICPA’s facilities and will be charged about $829,000 annually for leases.
Until it closes, the NZICPA is operating from the Wanganui Aero Club premises.
Councillor Charlotte Melser, who was at the meeting but without voting rights, said a lot of what happened at the academy was outside the council’s control.
But the community was owed “clear answers”.
“What did we know? What risks were identified, missed or possibly overlooked?” she said.
“Without an independent review, there will always be a question mark and it risks looking like we’re marking our own homework.”
Mike Tweed is a multimedia journalist at the Whanganui Chronicle. Since starting in March 2020, he has dabbled in everything from sport to music. At present his focus is local government, primarily Whanganui District Council.