On 1 December 1981 the Government announced than an Australian design would be pursued; and on 16 June 1982 it announced that a contract had been let with the Australian Aircraft Consortium Pty Ltd (AAC) for the design, development, and construction of two prototypes of a new basic trainer (designated

The Airtrainer was evolved by Aero Engine Services Ltd (as it then was) of Hamilton, NZ, from the four-seat Victa Aircruiser (VH-MVR), which was designed by the late Henry Millicer for Victa Ltd.