This is Burton's Press release of 12 September 05. It most definately wasn't leaked - the announcement was official and caught everyone by surprise. Things are looking good for Close Up doing a story - they have a couple of people in their team who are big fans of the Skyhawk and want to do a story - they hope to interview me later next week. Cheers. Don
"The Minister of Defence, Hon Mark Burton today announced that the RNZAF Skyhawk and Aermacchi fleets have been sold to a private American company, Tactical Air Services, Inc. for around $155 million (US$110 million ) following the signing of a Heads of Agreement between the company and the Royal New Zealand Air Force.
“This is an excellent outcome. The money received from the sale after aircraft regeneration, shipping and other costs associated with the sale will be available to continue the programme of developing a modern, relevant defence force,” Mark Burton said.
“There has been much speculation on the eventual fate of the air combat fleet including misinformed comment about the Skyhawks being scrapped. All parties will therefore be pleased to see this successful outcome.”
The recent successful introduction of the giant European aerospace company Alenia Aeronautica, SpA, a Finmeccanica company, as the company’s “corner stone” shareholder has meant Tactical Air Services is now able to complete the acquisition of the New Zealand air combat force aircraft. Finmeccanica is also the parent of Aermacchi SpA, the manufacturer of the RNZAF Aermacchi aircraft.
The sale is conditional upon the formal agreement of the US State Department permitting the importation of the aircraft into the United States as well as the required End User Certificates from New Zealand and Italy. These matters have already been extensively discussed with the respective foreign government departments and no problems were anticipated in finalising the arrangements.
Regeneration work on returning the Skyhawks to operational status will be undertaken by Safe Air Limited in Blenheim. The Aermacchi fleet is already fully operational. Both fleets will be progressively shipped to the US over the next few months.
“Given the considerable interest in advancing this matter from other political parties I am sure that they will welcome this announcement.
"I am particularly pleased that the regeneration work required to bring the Skyhawks back to operational status is going to a New Zealand company, Blenheim's Safe Air. This recognises the high level of New Zealand expertise in aircraft engineering."
Questions and answers on sale of air combat force
Who are Tactical Air Services?
The fleets’ new owner, Tactical Air Services, was founded by two retired US Navy captains each with over 30 years’ experience comprising combat fighter squadron command, fighter weapons school instructors and experimental test pilot roles.
The recent successful introduction of the giant European aerospace company Finmeccanica as the company’s major shareholder had meant Tactical Air Services was now able to complete the purchase of the RNZAF’s previous air combat force aircraft. Finmeccanica is also the parent of Aermacchi SpA, the manufacturer of the RNZAF Aermacchi aircraft, Mark Burton said.
What will the Skyhawks and Aermacchis be used for?
Both fleets will be used for training purposes under contracts approved by the United States Departments of Defence and State, with federal agency oversight on all aspects of their operations.
What is now required to complete the sale?
The sale is conditional upon the formal agreement of the US State Department allowing the importation of the aircraft into the United States as well as the required End User Certificates from New Zealand and Italy.
These matters have already been extensively discussed with the respective foreign government departments and no problems are expected in finalising the arrangements.
What work will be required to prepare them for sale?
Regeneration work on returning the Skyhawks to operational status will be done by Safe Air Limited in Blenheim. The Aermacchi fleet is already fully operational. Both fleets will be progressively shipped to the US over the next few months.
When did the RNZAF purchase the Skyhawk and Aermacchi fleets?
The bulk of the Skyhawks were purchase in 1970, while the Aermacchis were purchased in March 1990 and arrived at Ohakea in 1991.
Were they ever involved in active service?
No
Why did the Government decide they were no longer required?
The Government Defence Statement of 2001 called for a “refocused and updated Air Force”:
“The government is building a modern, professional and well-equipped Defence Force with the necessary military capabilities across all three services to meet New Zealand's objectives. The government has set clear goals and priorities and made a careful and thorough assessment of New Zealand's defence and security needs.
"The New Zealand Defence Force is being reconfigured so that it is sustainable and affordable over the long-term. It will be able both to meet New Zealand’s own defence and security needs, and to make a useful contribution when it is deployed.
Air Combat Force
"The recently completed review of the options for an air combat capability confirmed the finding of the 1998 Air Combat Review chaired by Sir Wilson Whineray that the air combat force equipped with the A-4 Skyhawk in its current state would be a marginal asset to any multinational coalition, and its operational utility will continue to decline. Retaining a force that has never been, and is unlikely ever to be, used would require in excess of one billion dollars in capital expenditure and increases in the NZDF's operating baseline over the next 10 years in the region of $1.2 billion. That is unsustainable” – the Government Defence Statement 2001
www.defence.govt.nz/public_docs/Gov-Def-StatNote: in 2002 the Government released the Long Term Development Plan which sets the priorities for a 10-year plan of defence acquisitions. $3 billion has already been committed to essential new equipment purchases and upgrades of older assets including:
Upgrades of the C-130 Hercules and the P-3 Orion Fleets
Selection of the NH-90 to replace the Iroquois Helicopters
2 new 757 aircraft to replace the old 727s
A Multi-role Vessel, 2 Offshore Patrol Vessels and 4 Inshore Patrol Vessels for the Navy
321 Light Operational Vehicles
105 Light Armoured Vehicles
Tactical Mobile Radio Communications for the Army and Air Force.
Who conducted the sale for the Government?
Ernst and Young Corporate Finance Ltd
What is the expected net return after costs?
The Government has been determined to transparently attribute all appropriate costs to the sale. It is anticipated that after all costs have been met, the net return will be around $120 million.
Why has it taken so long?
As we know acquisitions for military capability are a relatively lengthy and detailed process. There were a number of parties interested which all required to be given full consideration and the opportunity to carry out due diligence. We would, of course, liked it to have been completed earlier, but securing the best deal for the New Zealand taxpayer was the priority."