The Civil Aviation Authority (CAA) has grounded 21 helicopters over safety concerns.
Newshub understands it follows a spot audit on New Zealand's biggest aviation maintenance provider, Oceania Aviation.
CAA inspectors recently visited Oceania Aviation's turbine factory where they established "departures from engine maintenance instructions" that "adversely affect the airworthiness of engines".
Independent aviation commentator Irene King told Newshub these findings can be harmful for some businesses.
"That's really serious for small businesses. It will put a number of businesses to the wall," she says.
An emergency airworthiness directive has been issued noting that certain engines are "at risk of failure".
Those engines are "all Rolls Royce Allison 250 series engines", primarily those used in Hughes 500 and Bell Jet Ranger Helicopters.
That means dozens of helicopters in New Zealand and overseas need to be checked.
There are 41 engines currently in service that have incorrectly had parts maintained. Twenty-five are in New Zealand, 13 in Australia, two in Indonesia and one in Papua New Guinea.
Twenty-one helicopters around the wider Asia-Pacific region are grounded. Seventeen of these will be grounded in New Zealand and eight others need urgent checks.
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King says it's a "significant" proportion of the New Zealand fleet.
CEO of Oceania Aviation Nick Mair sent an email to customers informing them of CAA's audit.
The email states that safety and compliance are the company's priorities, but that its turbine shop has been temporarily closed so it can rectify the issues identified by the CAA before it continues its operations.
Aviation New Zealand says it'll have a big impact on the aviation industry and on the company.
"Oceania is a major company in New Zealand. It's very important in New Zealand and very important internationally," CEO John Nicholson says.
So after plenty of criticism of the CAA for not carrying out its regulatory role - a significant intervention has been enforced that will impact many businesses across the country.
Oceania Aviation CEO, Nick Mair, told Newshub in a statement the company takes its responsibility to address any concerns "seriously" and that it's cooperating with the CAA.
"An Airworthiness Directive was issued this afternoon to which we have acted upon immediately and contacted all affected customers. We can confirm that a total of six of our New Zealand customers will be directly impacted by the immediate grounding of affected engines," Mair told Newshub.
CAA's director Graeme Harris said the main issue with the work being done by Oceania Aviation was "unauthorised drilling and grinding work" done on key components.
The CAA has come under major scrutiny for failing to properly take action when it's identified issues with operators in the past. In 2015, a helicopter in Fox Glacier crashed killing 7 people. The Transport Accident Investigation Commission found the CAA knew of issues with the operator but did nothing.
But Harris is now warning more enforcement action may be on the cards.
He says the CAA is now undertaking "thorough review" of all engine maintenance organisations to ensure their work is up to scratch.
