Hamilton flight school could be first of many to depart New Zealand skies

Wednesday, 16 December 2020

The L3 Airline Academy at Hamilton Airport will close in early 2021.

New Zealand’s century old pilot training industry is on the brink of collapse unless the Government approves visas for international students to travel here to study.

Aviation New Zealand received written confirmation that the L3 Harris New Zealand Airline Academy, based at Hamilton Airport, would close.

“We regret to confirm plans to close L3 Harris’ New Zealand Airline Academy and consolidate some of our pilot training operations into Europe,” L3 Acting Academy Director, Commercial Training Solutions Richard Bennenbroek said.

“The site will close in February 2021, once a majority of cadets have completed their training there. We’re taking these actions to manage the complex issues related to the Covid-19 pandemic.”

About 170 staff would lose their jobs.

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Aviation New Zealand chief executive John Nicholson considered L3 to be the country's top training school for pilots and said it could be the first of many to go under, if international students couldn’t touch down in New Zealand.

“We have 14 professional flight schools in New Zealand that train international students.

“Most of them comprise 70 per cent international students. If you take away that 70 per cent, the viability of those schools becomes at risk.”

Nicholson said he had appealed to the Prime Minister Jacinda Ardern.

“An initial allocation of 440 visas to be used over six months would have saved the whole pilot training industry including L3.

Hamilton Airport Chief Executive Mark Morgan is meeting with L3 over the next few weeks.

“If you look at the number [study visas], 250 given to PhD and postgraduate students, how that was decided to give visas to that group, I have no idea.”

Nicholson said he understood international postgraduate students paid around $40,000 to study, and PhD students, $7000.

The average international flight training student paid annual tuition fees of $80,000, spends up to 18 months in New Zealand and went home on the completion of training to employment in airlines.

International pilot training was a top earner for New Zealand.

It was expected to generate about $51 million in foreign exchange earnings in 2020 with economic activity exceeding $226m, mostly in regional New Zealand.

The industry employed over 380 staff and had 225 flight instructors, with an asset value of about $100m.

Covid-19 had slowed international travel but Nicholson said the 10-year forecast looked promising.

Aviation New Zealand has received written confirmation that L3 Airline Academy, based at Hamilton Airport, will close.

New Zealand’s excellent track record in dealing with the pandemic made it an attractive, safe place for study.

“Some Asian countries want to their own pilots trained in New Zealand, to move away from their traditional training partners.

“But that demand won’t hang around for much longer.”

Training schools reported strong interest from New Zealand students but it was the international students which made up the bulk of classes.

“We are reaching a point where the current group of trainees is going to graduate and then there will be no new students to take their place.

“That is when cash flow is going to turn south.”

Hamilton Mayor Paula Southgate had written to Education Minister and Covid-19 Response Minister Chris Hipkins, warning L3 would close because of border restrictions.

Hamilton City Council is one of the shareholders of the airport.

Hamilton Airport Chief Executive Mark Morgan said he was disappointed to receive news of L3’s departure but understood the circumstances.

“It needed central Government intervention and it never came.

“While there is less demand for pilots globally, as a result of the pandemic and New Zealand’s inability to bring trainee pilots across the border, it meant L3 ultimately did not have a business.”

Morgan said he would meet with L3 over the next week to determine what might happen next.

“They have a ground lease through to 2024. The question is, can L3 sell their flight school to another operator who may then be able to use the facility?

“Or if not, we will have a conversation on another use for those facilities but I expect that to be a conversation that will traverse many months.”

The airport generated two income streams from L3, landing fees and ground lease fees.

“But the key point is that we have worked hard to diversify our group income stream … so while we aren’t happy to lose aeronautical income we can buffer through such a challenge.”

Morgan said companies which helped maintain the school’s aircraft would also lose some income when the flight school closed.

“My concern is that this has the potential to be much wider for other flights schools around the country.

“While the border continues to constrain, it could be the forerunner for more serious consequences for the aviation industry.”

Minister Chris Hipkins’ office has been approached for comment.

*New Zealand Airline Academy, or NZAA, is a separate pilot training service based at the Oamaru Airport and remains open.