Small Aircraft; High Wing; 1 Eng; Fixed Gear
Flight Crew Multiengine; Flight Crew Flight Instructor; Flight Crew Commercial; Flight Crew Instrument
Flight Crew Last 90 Days 151; Flight Crew Total 674; Flight Crew Type 612
Communication Breakdown
ATC Issue All Types; Conflict NMAC; Deviation / Discrepancy - Procedural Published Material / Policy; Deviation / Discrepancy - Procedural Clearance
Air Traffic Control Provided Assistance; Flight Crew Took Evasive Action
Human Factors; Airspace Structure; Procedure
I was practicing commercial takeoffs and landings with my student on [date] in Aircraft X. I was on IWA tower frequency at [time]. My student and I were in the right downwind for 30R when we heard tower clear a Cirrus aircraft to turn crosswind inside of us. This is routine at IWA and means that the aircraft will turn crosswind in front of us making us number 2 behind that aircraft. My student and I both looked for the traffic assuming that he would be in front of us. We were told to extend downwind for that other aircraft because they had requested a short approach. We did not see the Cirrus in front; so we looked at the traffic page on the MFD to find that we had an aircraft 200 feet below us directly abeam our right wing. I took control of the radio from my student to query ATC about whether that aircraft was supposed to be there because he was in the process of overtaking us in the traffic pattern between our aircraft and the runway. We had received no prior warning from the tower controller about this. Tower responded; 'the Cirrus is slightly behind to your right; he's passing you off the right and has you in sight; he's inside of you for a 1000 pattern short approach; you're extending downwind'. I responded that I was simply ensuring that the traffic would be no factor for us. In an unfriendly tone; tower responded 'He is no issue; I'm working the pattern here'. We were unable to accurately estimate the lateral distance of the Cirrus aircraft from us; though we were approximately 0.9nm from runway 30R when this occurred; and the other aircraft was far enough away from 30R to make a traffic pattern as well.
Flight Instructor reported a near mid air collision while engaged in pattern work on a training flight.