IN 1936 it was obvious that war with Germany, if not imminent, was at least a danger which would have to be faced in the future. Moreover, in the last few years military aircraft had been developed to such a state that an entirely new conception of their uses and potentialities had become necessary. It was now obvious that aircraft would play a more important part in Empire defence than had seemed possible a few years before.

Early in the year the Government decided to establish the Air Force as a separate service removed from Army control, and Squadron Leader Wilkes, as Director of Air Services, was instructed to prepare a scheme and work out the costs. This was the fulfilment of the aim for which Wilkes had been working for many years; but he declined to tackle the job, saying that any worthwhile scheme would be extremely expensive, and that if he or any other New Zealand officer produced one, it would be turned down on that account. He advised that, if the Government was serious in its proposal, it should once again ask for the loan of an adviser from the United Kingdom. Then, with expert authority behind it, the development of the Air Force could go ahead without too much quibbling about cost.

As a result Air Ministry was asked for a suitable officer, and later in the year Wing Commander the Hon. R. A. Cochrane, AFC, RAF,¹ was sent to New Zealand to investigate and report on the country's requirements.

In his initial report which he presented in December 1936, Cochrane recommended a complete reorganisation of air force policy and administration. Summarised, his findings were that the defence of New Zealand involved three main factors:

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(a)	Local defence.
(b)	The defence of shipping routes.
(c)	The security of the United Kingdom.

He suggested that the Air Force should be capable of countering raids by cruisers, armed merchantmen or submarines, and by aircraft carried in such ships. New Zealand was not likely to be in danger of invasion so long as Singapore was maintained as a major base and the British Fleet could be sent to the Pacific theatre in the event of war. If these two assumptions proved invalid, no forces which New Zealand could afford to maintain would be strong enough to deal with a major attack. Raiding forces would probably need to secure bases in the Pacific Islands, and New Zealand should be prepared to protect potential Pacific bases, as well as vital communication points in the area, from enemy attack.

Taking all factors into consideration, he recommended that the New Zealand Air Force should maintain two medium bomber squadrons capable of locating and attacking enemy raiders before they reached the New Zealand coast, and which would have sufficient range to reach bases in the South Pacific or, if necessary, to fly to Singapore in support of RAF units there.

He recommended:

(1)	That the Royal New Zealand Air Force should be constituted as a separate service controlled by an Air Board under the direction of the Minister of Defence.
(2)	That it should consist initially of two permanent squadrons equipped with medium bomber aircraft with a total first-line strength of twenty-four, and the necessary repair facilities and reserves of aircraft.
(3)	That a reserve of personnel should be instituted which might at present be based on the numbers required to maintain two medium bomber and one army co-operation squadrons in the conditions of a major war. These personnel were to be trained to a standard which would enable them to take their places in squadrons on active service. The question of the formation of Territorial squadrons was to await consideration on a future occasion.
(4)	That civil air transport should continue to be encouraged with the object of enabling it to take its place in the transport system of the country and thus provide a valuable backing to the regular air force. The aero club movement should also be supported.
(5)	That the Government of the United Kingdom should be invited to co-operate in developing facilities to enable aircraft to operate in the area of the Pacific Islands.

He further recommended that the provision of the resources referred to above, and the facilities necessary for their operation, should be spread over a period of three years.

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To put these recommendations into effect, he suggested that all aircraft and personnel should be concentrated at Christchurch with a view to making an immediate start in training the men required for the Air Force and the Air Force Reserve. Extra accommodation should be put up as quickly as possible and the necessary additional training aircraft obtained. The next step, between 1937 and 1939, should be the construction of accommodation, repair facilities, and bomb storage for two medium bomber squadrons. Finally, in 1938–39, equipment and reserves for two squadrons should be purchased.

He estimated that the capital cost of the scheme would be £1,124,000 sterling. From this the value of aerodromes and buildings already in existence could be deducted, but the net cost was still £1,100,000. This included the building of a permanent station for two bomber squadrons, the cost of the aircraft and reserves, the provision of bombs and bomb storage, additional construction at Wigram, the provision of landing grounds in the Pacific Islands and the equipment of wireless telegraphic communications. The estimated annual cost of the scheme was £435,000 sterling.