Questions included where NZICPA would move to at the airport, if it would finish operations next June, if the council/Whanganui District Holdings (Holdings) planned to sell all planes and equipment before closing, and if landing fees, asset sales and the lease agreement with NZAAL would eventually recoup money invested in NZICPA.
Holdings, the commercial arm of the council, which oversees operations at the NZICPA, is expected to be disestablished when the NZICPA is closed.
Whanganui mayor Andrew Tripe said in a statement this week that the NZICPA was expected to operate until mid-2026, but “a transition plan” was still being finalised.
“Income from the agreements with NZAAL is expected to return profits to the council, enhance the viability of Whanganui Airport and boost the district’s economy.”
Dame Patsy Reddy and then-NZICPA chief executive Phillip Bedford cut the ribbon to open the NZICPA in 2018. Photo / NZME
The council said annual leases for NZAAL were $219,996 (plus GST) for NZICPA’s hangar and flight school facility, $446,004 for College Estate, and $162,996 for the Hato Hōhepa accommodation facility (former Nazareth resthome).
NZICPA opened in August 2018.
Holdings chair Carolyn van Leuven told the Chronicle that overall, the NZICPA had not made a profit since then, but there had been short periods where it “performed better”.
“It’s been an incredibly challenging situation, unfortunately,” she said.
The facility was significantly impacted by the outbreak of Covid-19, with student numbers down to 19 when borders were closed.
In 2023, the council signed off on a funding package of $10.329 million to the NZICPA, to enable the academy to deliver a contract for Indian airline IndiGo.
Van Leuven said the package had been used up, mostly on aircraft, associated costs, and working capital.
“The academy is earning income, and the council has agreed to support the academy until it trains out the latest cohort of students.”
Council chief financial officer Mike Fermor told the Chronicle that costs to keep the academy open until mid-next year depended on “multiple variables”, including the time it took to complete training for existing students, potential storage and lease costs, income from asset sales and the ability to utilise tax losses.
“The actuals at the end of June 2026 may vary significantly from current estimates,” Fermor said.
“When we have all the information, we will certainly make full and final financial reports available to the public.”
Tripe said the agreement with NZAAL would enable the council to divest its ownership in the NZICPA.
“Our focus has been on achieving the best result possible for staff, ensuring current students can complete their training, and reducing financial risks for the council.
“We will undertake a full review of NZICPA’s performance leading up to the CAA suspension this year.
“We want to understand what happened so we can benefit from this learning as a council and will share our findings, including full financial reports, with the public.”
Holdings and the council have invested around $18.4m into assets used by NZICPA’s business, including aircraft, accommodation facilities, simulators, its hangar and classrooms, and maintain ownership of them.
Some aircraft were needed to continue training cadets until the middle of next year, Van Leuven said.
Carolyn van Leuven says, overall, NZICPA has not made a profit since opening in 2017.
“As they are no longer needed, as the simulators are no longer needed, we will be looking to sell all those assets over time.”
Last month, Mascarenhas said NZAAL did not require any planes or equipment from the NZICPA.
NZAAL’s lease runs for 10 years, with rights to extend for another 15 years.
The Civil Aviation Authority (CAA) began investigating NZICPA in May, following anonymous reports of safety concerns.
A CAA spokesperson said in a statement this week that NZICPA had returned to flight and training operations, and investigation activities had wrapped up.
“Several of the aircraft have been cleared to return to flying, and the CAA and NZICPA are working together to manage the grounded planes.”
In a statement, NZICPA chair Matt Doyle said transitional arrangements between the two schools were being mapped out, with students able to decide whether to continue their training with NZICPA or NZAAL.
Speaking to the Chronicle, Van Leuven said that while the NZICPA had not performed as planned, Holdings and the council were working hard to get the best outcome for ratepayers.
“If the council had known about some of the upcoming global and market conditions when it decided to purchase the academy, I’m not sure it would have made the same decision.
“Like any business, you just don’t know.
“It’s worth noting that the council’s decision to purchase and support the NZICPA was strongly influenced by the desire to support the airport and broader Whanganui economy.”
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.