The Defence Minister has contradicted his earlier suggestion the Government could take over Safe Air's operation near Blenheim to ensure the troubled upgrade of the Air Force's Hercules is completed.
Wayne Mapp had confirmed that was an option, but now says the Government has no intention of taking a stake in the Air New Zealand subsidiary.
The aircraft maintenance company is due to make 92 people redundant at Woodbourne after the failure of North American contractor L-3 Communications to deliver Air Force Hercules for upgrading.
Delays in the work, particularly problems relating to the software for the Hercules, put back the contract by two years. Three Hercules still need to be upgraded and at the moment work on those has ground to a halt.
Dr Mapp says negotiations are continuing between Safe Air, the Government and L3 Communications.
The minister says talks are aimed at ensuring work on the three Hercules is done in Blenheim, despite Safe Air no longer wanting to do it following a dispute with L3.
But Dr Mapp told Radio New Zealand on Wednesday evening that the discussions do not include the Government taking a stake in Safe Air.
Earlier in the afternoon, though, he confirmed that a Government takeover of the Safe Air operation remained an option.
Dr Mapp's office says there is no contradiction between what the minister has said and that he is simply saying he will not conduct these negotiations through the news media.
Air New Zealand says it suggested a couple of months ago to the Ministry of Defence that it might take a stake in Safe Air, but has heard nothing since.
New Air NZ engineering jobs
Air New Zealand says workers set to lose jobs at its Safe Air subsidiary will soon have new job opportunities in Nelson.
The airline says it will create about 30 new engineering jobs at Air Nelson by shifting maintenance work on Mt Cook Airline planes from Christchurch to Nelson.
The EPMU says Christchurch-based workers will not need to move, indicating Air New Zealand has, or will, pick up maintenance work with other airlines.