Kiwi jet fitout dispute heads to court

MARIA SLADE
Last updated 12:52 15/05/2013

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A $34 million fitout of a private jet owned by Samsung currently being done by an Air New Zealand subsidiary has become the subject of a High Court dispute.

The 10-month, complete custom fitout of the new Boeing Business Jet (BBJ) owned by the South Korean electronics conglomerate Samsung is underway at the Christchurch base of Altitude Aerospace Interiors.

However, Kiwi startup company Aerospace Developments has told the High Court at Auckland that it had an arrangement with Altitude to work together on the project but has been cut out of the deal, causing it to fold.

Altitude, 100 per cent-owned by the national carrier, was set up five years ago to provide premium aircraft furniture and interior systems for both VIP aircraft and commercial airliners.

Aerospace Developments specialised in furniture for corporate jets and was set up to leverage on existing New Zealand expertise in superyacht fitouts.

Aerospace says as both companies were building their businesses from scratch they worked closely together to attract clients and build capacity. They had taken a 'NZ Inc' approach to marketing an all-inclusive solution, and had even had help from New Zealand Trade and Enterprise.

Every project they chased was a joint venture, and Aerospace invested around $1m of its time and money on the basis that it would become Altitude's preferred supplier when the jobs started coming in.

But when it won the Samsung contract Altitude largely shut Aerospace out, claiming that it had to do so because Samsung didn't want Aerospace involved.

Aerospace claims Altitude has now conceded that there was no objection from Samsung. It argues that Altitude was motivated by profit, and bypassed the startup because it it could make more money by dealing with subcontractors directly.

Aerospace concedes that no signed agreements had been completed between the two companies.

However, it says Altitude general manager Mike Pervan had provided repeated assurances that it wanted Aerospace in on the job, and the cabinetry and veneering specialist even made a $54,000 sample cabinet for Altitude as part of the Samsung bid.

When Altitude told Aerospace in March 2010 that it would not be retaining it do to the cabinetry and veneering work on the Samsung jet, there was no mention of the client having any issue, Aerospace says.

The Samsung BBJ is a Boeing 737-700 which arrived in September direct from the Boeing factory without interior or external paintwork.

The aircraft has been modified for VIP use, and has auxilliary fuel tanks to give it extended range. It is receiving a full custom interior with the latest in-flight entertainment and communications systems. Its exterior will also be custom painted.

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- BusinessDay.co.nz

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