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Australia's Ministry of Defence said Air New Zealand flew its troops bound for Iraq because Qantas planes were unavailable.
It says it did not specifically choose Air NZ, it was more a case of finding other planes while aircraft it normally used were undergoing maintenance.
Cost was also an issue.
The ministry confirmed there was no contact between the Australian and New Zealand governments over the flights.
It said the planes used would have been assigned official Australian government call signs and used diplomatic routes on the trips.
After a meeting between Air New Zealand chairman John Palmer and Finance Minister Michael Cullen today, the airline blamed Government officials for the failure to let ministers know about the flights.
Foreign Minister Winston Peters said today that it was not yet known whether Air New Zealand had acted directly against Government policy in flying the troops.
He said he was still waiting to get full details of what happened from the head of the Ministry of Foreign Affairs Simon Murdoch.
"I know that he is engaged in a whole lot of other inquiries around the place to put together a subsequent and chronological list of events and times and facts and I expect to have them very, very soon today," Mr Peters said on Radio New Zealand.
He insisted his relationship with his department was excellent and that if the Australian troops were involved in Afghanistan or in reconstruction work in Iraq, rather than combat work, then there was no problem.
He said a claim in the Investigate article that one of the Air New Zealand flights was escorted into Kuwait by fighter jets was wrong.
The decision by Air New Zealand to carry Iraq-bound Australian military forces to the Middle East has left the airline and Mr Murdoch, the country's head diplomat facing blame for the foreign policy embarrassment.
Air NZ admitted yesterday it had twice in recent months chartered its aircraft to fly Australians to Kuwait.
It also flew US military personnel to Japan after a training exercise.
It is thought the troops flown to Kuwait were bound for nearby Iraq, where Australia has been a member of the US-led coalition forces since the invasion of 2003.
Air New Zealand said it told Government officials about the flights, but the message apparently did not reach the Beehive until yesterday.
Defence Minister Phil Goff immediately condemned the flights, and Prime Minister Helen Clark is also understood to be appalled.
In Parliament yesterday, Mr Goff questioned the role of the Ministry of Foreign Affairs, saying it should have told its minister and the Cabinet about the "sensitive" issue.
Mr Peters said Air New Zealand contacted Mr Murdoch in mid-January to ask about a tender and whether it would be against Government policy.
On the information presented at that time, Mr Murdoch said the tender did not appear to be breaking policy, but he asked Air New Zealand to keep in touch over the issue.
Mr Peters said yesterday it appeared the airline had not done this.
If that were the case, some responsibility lay with Air New Zealand.
It is not uncommon for commercial airlines to take military charters to make extra money out of their fleets during quiet periods.
But Air New Zealand's activity has raised eyebrows because it is counter to the Government's opposition to the war in Iraq, and the airline is 80 per cent owned by the Government.
Today's Investigate magazine reveals no new allegations about flights being chartered by foreign military above what was known yesterday.
The article does make a number of allegations about the airline's employment practices.
But Air New Zealand moved quickly yesterday to defend itself as the political fallout spread.
Airline officials declined to be interviewed, but issued two statements, the first titled "Air New Zealand increases charter revenue".
It said the airline had engaged in a range of charter activity with various customers, resulting in a revenue boost of $18 million over the past 14 months.
Air New Zealand strongly disputed an Investigate claim that fighter jets escorted one of its flights into Kuwait airport.
It is taking the magazine to the Press Council claiming "factual errors".
Mr Goff told Parliament it was inappropriate for the national carrier to be flying troops to Iraq.
"Air New Zealand's action, I think, is contrary to the wishes and the views of this Government and maybe this House," he said.
He said Government ministers could not direct the airline on commercial matters, but it could make its feelings absolutely clear.
National Party deputy leader Bill English labelled the situation "a foreign policy embarrassment on a scale we haven't seen for years".
But aviation analyst Peter Clarke said Air New Zealand was simply doing business and had never tried to hide its activity.
He cited the July issue of an Air New Zealand crew magazine, which includes an extensive article written by one of the crew members on one of the flights to Kuwait.
In the article the staff member refers to Air New Zealand taking up the flights because an Australian charter airline's aircraft had needed maintenance.
'Our flight to Kuwait'
The staff on Air New Zealand's plane to Kuwait had a long security briefing before they boarded the aircraft that would take them and a group of Australian military personnel to the Middle East.
On board, staff checks of the aircraft found extra unfamiliar equipment loaded to meet the passengers' special requirements.
The plane was also packed with cleaning materials, toilet supplies and engineering supplies as it flew first from Auckland to Sydney, then on to Darwin, according to an account of the trip by ANZ staffer Wayne Mitcham in an Air New Zealand staff newsletter.
With the passengers on board, the plane then flew to Kuwait, where it was dwarfed by a neighbouring US Air Force plane on the tarmac.
The heat immediately struck the staff - one female crew member's boot heels melted on the tarmac when she went to collect her bags.
After getting through security, the staff enjoyed some time as tourists, visiting markets and looking around during their stay.
- with NZPA, NEWSTALK ZB
