Southern-based The Helicopter Line must pay more than $2 million to listed Auckland heli and freight services company Airwork, a High Court decision says.
While the High Court awarded Airwork $2 million, plus undisclosed interest charges and costs yet to be determined, the decision may yet be appealed by The Helicopter Line.
The Helicopter Line is one of a multitude of mainly tourism-related subsidiary companies of Skyline Enterprises, operating across the South Island but including luge subsidiaries in Canada and Singapore.
The Helicopter Line operates a fleet of AS350 Squirrels and fixed-wing aircraft, offering charters across Queenstown, Aoraki/Mt Cook, Twizel, the Fox and Franz Josef Glaciers and Milford Sound.
Skyline Enterprises chairman Mark Quickfall was contacted in Australia yesterday but was unable to respond in time for publication.
Airwork chief executive Chris Hart said yesterday its subsidiary Heli Holdings started legal proceedings against The Helicopter Line and parent Totally Tourism, another Skyline subsidiary, in 2013.
The dispute arose from a 2002 contract for the supply of helicopters to The Helicopter Line.
“The court’s decision is very detailed. Airwork is still working through it and accordingly has no further comment on the decision at this time,” he said in a brief statement statement yesterday.
He only noted Airwork had not recognised any of the earnings in its financial accounts that were the subject of the claim, so Airwork would now reconsider the impact in its full year 2016 financial statements, subject to the decision potentially being appealed.
In Airwork Holdings’ interim report for the six months to December, it reported “significant growth” across both its fixed-wing and helicopter businesses, delivering an improved net profit after tax of $11.6million, with expectations full-year profit would top $21million.
Airwork operations include air freight, chartering, servicing the oil and gas sector and leasing, engineering and support services for fixed-wing craft and helicopters.
Airwork’s $83 million revenue for the half was apportioned to $44 million from its helicopter work and $39.2 million from its fixed-wing operations.
In a note in its full-year 2015 accounts last year, Airwork said it issued notice of termination of the contract in March 2015. The fleet of eight helicopters used in the contract had a carrying value of $7.6 million, at June 2015.