The deputy chairman of the Civil Aviation Authority (CAA) has resigned after an "error of judgment" involving an airline he part owns and a competitor.

The crown entity, which oversees aviation safety, says deputy chairman Peter Griffiths had resigned after passing on information regarding the suspension of an airline.

This was Tauranga-based airline Sunair Aviation, and the information was given to Great Barrier Island-based Barrier Air, which Griffiths bought 25 per cent of in April this year.

Griffiths, and CAA chairman Nigel Gould said this was an error of judgment.

Sunair had also received an apology from both Griffiths and Gould.

"That said, it should be acknowledged that Peter's intent was to offer Barrier Air assistance to Sunair in order to minimise the adverse effect on its customers and when he initiated the contact with Barrier Air he did not realise that the suspension was not yet in place," says the CAA.

"Despite that good intent, Peter freely admits to an error of judgement and has submitted his resignation from the board."

Former CAA deputy chairman Peter Griffiths bought a 25 per cent stake in Barrier Air this year. CHRIS SKELTON/STUFF

Gould says the resignation and an internal debrief in this "very rare" case was sufficient to address the issue.

Regulatory decision making was done by the Director of Civil Aviation, independent of the board, which meant while there were obvious risks to having people involved with aviation on the board, it also provided advantages.

On balance, providing that conflicts of interest are managed correctly and board members do not act on information held then the benefits of having some sector knowledge/involvement on the board outweighs the risks."

Griffiths was also chairman of Z Energy and a director at NZX-listed Metro Performance Glass, having previously been BP New Zealand managing director.

Griffiths' CAA profile said he had a lifelong interest in aviation and aircraft.

Sunair was grounded by the CAA for the second time in less than a year earlier this month.

The CAA says this decision was the result of an audit of Sunair records which found a number of anomalies and omissions in maintenance records.

"These findings created a reasonable doubt about the airworthiness of the aircraft operated by Sunair and the Operator's maintenance control and the quality assurance systems intended to ensure their airworthiness."

- Stuff/HAMISH MCNICOL