CAA extends breathing space for operators of Pacific Aerospace aircraft

There is some good news for owners and operators of aircraft made by Pacific Aerospace, now in interim liquidation – New Zealand’s Civil Aviation Authority has extended its decision not to revoke the planemaker’s certifications.

The veteran Waikato planemaker has more than 300 aircraft in operation around the world and has supplied aircraft to around 80 per cent of the topdressing industry.

If the CAA revoked its organisational certificates due to its insolvency, those aircraft could be grounded.

“We haven’t revoked any of PAL’s certificates. The type certificates for PAL-produced aircraft are still in place, meaning owners and operators of PAL aircraft can still fly these,” a CAA spokesman said.

“The CAA has not made further decisions about the future of PAL type certificates at this time.”

Pacific Aerospace Limited, a joint venture between a subsidiary of China’s giant Beijing Automotive and a New Zealand company, was put in into interim liquidation by the High Court on February 12.

The light aircraft maker and exporter employs around 100 people at its base near Hamilton airport. According to an affidavit to the High Court by chief executive Mark Crouch, there had been no money to pay them since February 10.

The company was insolvent and unable to pay its debts.

The application to wind it up was made by US aviation services company International Aviation Support, which said it was owed $1.3 million by Pacific Aerospace, whose origins date back to 1949.

Inland Revenue is owed $770,839.

Judge Peter Andrew said appointment of an interim liquidator was justified because the company’s assets were in jeopardy.

Interim liquidator Steven Khov of Khov Jones told the Herald at the time such appointments were not the norm. The job was to step in and ensure assets and their value are preserved. An interim liquidator had the same powers as a liquidator.

In his judgment, Andrew noted the company’s main asset was its intellectual property to design and manufacture aircraft and the ability to use that asset was wholly reliant on CAA certification.

Because the CAA had been advised of the company’s insolvency “it is simply a matter of time before the CAA revokes the certification given to PAL”.

“The plaintiff hopes that with the appointment of an interim liquidator, the CAA may consider delaying the revocation of the certification… to enable a sales process to proceed with the interim liquidator,” his judgment said.

PAL’s obligations to its customers also includes supplying essential spare parts.

The interim liquidators have since had since had approval from the High Court to sell the business and its assets. A substantive hearing for full liquidation is due next week.

Khov said he and Kieran Jones were talking to “a number of parties”.

Chief executive Mark Crouch earlier told the Herald the company’s failure was due to Covid-19’s impact on aircraft sales, which had led to the shareholders’ decision to exit.

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