Air New Zealand has been embarrassed by revelations of a deal with the Saudi Arabian military.

TVNZ revealed on Monday the national carrier had, through a third party, agreed a $NZ3 million ($A2.8 million) work program with the Royal Saudi Navy to fix a handful of aircraft engines.

Saudi Arabia is engaged in a major conflict with neighbouring Yemen, including a blockade of the impoverished country that has led to mass human suffering.

Chief executive Greg Foran told TVNZ the airline had used “poor judgment” in making the deal and Prime Minister Jacinda Ardern agreed.

“It just doesn’t pass New Zealand’s sniff test and I think they’ve acknowledged this too,” Ms Ardern said.

“It has ramifications for New Zealand and its reputation.”

TVNZ said Air New Zealand declined to respond to its questions for eight weeks but Mr Foran denied it was “a secret deal”.

“We’ve been dealing with navies from around the world, particularly the US navy and Australian navy,” he said.

“It’s a couple of engines … we will pick up the pieces that need to be picked up on the engine that still needs to be completed and send that back.”

Ms Ardern has asked the foreign affairs ministry to investigate whether Air NZ has breached any obligations, including export control orders.

“We do have obligations to make sure we are applying UN sanctions and so on. It’s not clear what happened here would have fallen within that,” she said.

Greens human rights spokeswoman Golriz Ghahraman said Air NZ could have committed crimes.

“If they have knowingly aided or abetted what we know are international crimes, they would be liable,” she said.

“We have an obligation both moral and legal to hold them to account.”

The contract has other political ramifications.

The deal was struck in 2019, the same year opposition MP Christopher Luxon left the job as Air New Zealand’s chief executive.

“I have no recollection of it,” Mr Luxon said from Wellington, as parliament resumed for the year.

“It’s good to see they’ve come out and admitted this morning that, yes, there was an error in judgment and they’re wanting to do something about that.”

-AAP