Myro, the Smallest Plane in the World, and his pilot are exploring the Australian countryside when they spot a smoking red flare on a remote airfield. Flying down to see if they can help, Myro notices a skull and crossbones on the roof of the hangar and fears that it's a secret pirate hideaway! Sure enough, within moments of landing, the air is filled with skydivers calling themselves the Parachute Pirates.

When Myro is teased about his size by Deko, the parachutist's loud-mouthed airplane, he breaks the rules and takes Pirate Penny skydiving. But Myro is caught in the act by Madge, the Flying Club manager and gets into big trouble!

When apologies are made and lessons learned, Madge lets them go skydiving the following day, but this time with her permission.