The Air Force says eight lots of dangerous goods were incorrectly identified over several years, including the placement of oxygen cylinders on an Air New Zealand flight to Canada.
The latter placement - on a flight from Auckland to Vancouver on 23 August 2009 - for a military exercise was done without the airline's knowledge.
Air Vice-Marshal Peter Stockwell says the Air Force recognised that the cylinder incident had potentially devastating consequences and the Defence Force subsequently implemented a raft of reforms.
He says the Air Force had a telephone conversation with the Transport Accident Investigation Commission (TAIC) about the canisters but believed the goods had not been loaded onto the plane.
TAIC therefore did not believe an incident had occurred as defined in its act.
Air Vice-Marshal Stockwell says the Air Force also did not raise the issue with Air New Zealand, a mistake which appears to have been the result of different staff within the Air Force thinking that others were doing it.
The Civil Aviation Authority said it was not told of the incident either. It has started an investigation and expects an interim finding within a week.
The authority earlier told Radio New Zealand the fine for illegally carrying dangerous goods on an aircraft is $30,000; it now says a statute of limitations of 12 months means that might not happen.
It's exonerating Air New Zealand of some blame, saying the airline would never have let dangerous chemicals on its plane had it known what they were. It says the materials probably went through a freight agency.
Similar cylinders exploded in flight
The cylinders are similar to those that exploded on an American plane over Florida in 1996, killing all 110 people on board.
Air New Zealand says the Defence Force has confirmed it never informed the airline of the original incident, nor of the outcome of an inquiry it made into the matter.
CAA director Graeme Harris says the authority will be talking to the Defence Force, Air New Zealand and probably also the Transport Accident Investigation Commission.
The commission is itself considering whether a full investigation is warranted.
Minister wants more details
Transport Minister Gerry Brownlee says there appears to have been a breach of protocol by the Air Force and steps must be taken to ensure that sort of thing never happens again.
The Airline Pilots Association says the Air Force potentially put hundreds of civilian lives at risk.
Association president Glen Kenny says it is disturbing that neither the commission, Air New Zealand nor the CAA have found any record of the incident.
It has also been reported that a report on the fatal Anzac Day crash of an Air Force helicopter in 2010 revealed systemic problems within the Air Force.
Labour Party defence spokesperson Iain Lees-Galloway says Defence Minister Jonathan Coleman should have been across both matters and asking the Air Force hard questions.