OTTAWA, Ontario, 1 July 2013. NAV CANADA has invested an additional $40 million (U.S.) in Aireon LLC, a joint venture with Iridium Communications Inc. (Nasdaq:IRDM), increasing its ownership of Aireon to 18.7 percent on a fully diluted basis.
Aireon's mandate is to take advantage of the hosted payload space on Iridium NEXT, Iridium's second-generation satellite constellation, to deliver global aircraft surveillance through Automatic Dependent Surveillance-Broadcast (ADS-B) receivers on the satellites.
Aireon will provide space-based air traffic monitoring services to air navigation service providers (ANSPs) around the world as the new constellation becomes operational. The Iridium NEXT constellation is scheduled for first launch in early 2015 with full capability expected by 2017.
The new capability will extend air traffic surveillance to vast regions of the globe, promising a quantum leap in fuel savings and avoided greenhouse gas emissions for the world's airlines. The savings stem from the increased ability to use more optimal altitudes and routes, due to the expanded capacity of airspace formerly limited to less efficient procedural separation.
"There are significant safety, efficiency and environmental benefits of extending ADS-B surveillance to the remote areas of the world," says John Crichton, president and CEO of NAV CANADA. "We look forward to making improvements to the service we provide customers in our airspace. From discussions with airlines and other ANSPs, we know they are as excited as we are about the applicability of this service in other parts of the world."
Agreements signed in Nov. 2012 provide a path for NAV CANADA to acquire up to 51 percent of Aireon. Under these agreements, NAV CANADA will purchase preferred membership interests that are convertible into common interests. The investment will be made in five tranches, each subject to the satisfaction of various operational, technical, commercial, regulatory and financial conditions. The final tranche is scheduled for late 2017.
In April 2013, NAV CANADA signed a long-term commercial data services contract with Aireon, making the Company Aireon's first customer. The ADS-B data will enable NAV CANADA to deploy this new satellite-based surveillance capability in its North Atlantic airspace operations--the busiest oceanic airspace in the world with some 1,200 flights per day. NAV CANADA estimates customer fuel savings on the North Atlantic alone of over $125 million per year as a result of this new capability, as well as reduced greenhouse gas emissions of 328,000 metric tons of CO2 equivalents annually.
