Childflight stops operating despite government help

The fund-troubled ChildFlight Trust rescue service has ceased operations.

ChildFlight, Pacific Air Ambulance and Pacific Assist all ceased operating today, a recorded message on the trust's phone number says.

The Government had earlier this month given ChildFlight a three-month reprieve so it could find alternative sources of funding after a High Court decision over its main source of income.

ChildFlight and its sister organisation, the Auckland Rescue Helicopter Trust, relied heavily on $4 million a year from pokie machines.

However, a High Court judge ruled that the Internal Affairs Department could withdraw the gaming licences for six pubs owned by Tasman Trust, a subsidiary of the rescue trust.

ChildFlight Trust chairman Murray Bolton said he regretted the specialist flying intensive care service had to close following the ruling.

Last week the Air Rescue Foundation (ARF), the gaming trust which funds ChildFlight/ARHT, ceased all funding grants to ChildFlight because of uncertainty over its future.

"We accept they had little choice but to stop funding ChildFlight. That in turn meant we as trustees had little choice but to close ChildFlight," Mr Bolton said in a statement.

Staff were told this morning the ChildFlight -- Intensive Care by Air -- service was to cease operations immediately, and an application had been made to the High Court to appoint a liquidator.

Mr Bolton said the trustees were grateful to ACC Minister Ruth Dyson and Health Ministry and ACC officials who had worked to save ChildFlight.

"Their efforts over the last couple of weeks have been greatly appreciated, but in reality mask the real issue -- the failure of the Department of Internal Affairs to even attempt to find a workable solution to the way ARHT/ChildFlight received money from gaming machines."

He said the department had the power to find a solution but did not do so.

"We accepted the suggestion made by Justice Harrison in the High Court that there needed to be a negotiated solution to the issue of us owning hotels which housed gaming machines, the proceeds of which would ultimately go to ChildFlight and the rescue helicopter.

"ARHT/ChildFlight attempted in good faith to do this as far back as December last year before the hotel purchase was completed, but DIA refused to engage in any meaningful dialogue.

"They must now be prepared to accept the consequences of their intransigence," Mr Bolton said.

The Auckland Rescue Helicopter Trust will not be affected by the closure of ChildFlight.

Last year the ChildFlight fixed wing carried 700 patients and the Westpac Rescue Helicopter rescued 600 people.

Ms Dyson expressed regret over the closure but said she would ensure the service continued.

"My priority is to make sure that sick and injured children continue to get specialist transportation to Starship Hospital in Auckland when necessary," she said in a statement.

The Ministry of Health and other parties would meet this afternoon to find a way to ensure there were no "gaps in the delivery of this essential service".

Ms Dyson said she was sorry the trust decided to wind up immediately rather than wait until the three month grace period ended.

"I express sincere regret to the staff who have lost their jobs," she said.

About 50 staff are understood to be affected.

An Internal Affairs Ministry spokeswoman said Mr Bolton had misquoted the judgment.

"If you read the judgment you will (see) the judge came down very solidly in favour of Internal Affairs."

No further comment was being made.

Justice Harrison's ruling came after former trust members were accused of allegedly misdirecting part of the pokies' profits back to a group of Auckland hotels.

ChildFlight's annual budget is about $4 million. Half is from slot machines and the rest mainly from district health boards and insurance companies.

Health boards pay only a third to a half of the cost of children's air-ambulance flights. It costs about $16,000 to fly a sick child from Invercargill to Auckland on a fixed-wing plane.

- NZPA