NAV CANADA signs formal agreement with Aireon
Nov. 19, 2012, Ottawa - NAV CANADA has signed an agreement finalizing the terms of its participation in Aireon LLC, a joint venture with Iridium Communications Inc., previously announced June 19, 2012.
Aireon's mandate is to provide satellite-based surveillance capability for air navigation service providers (ANSPs) around the world. Aireon will deliver this global aircraft surveillance through Automatic Dependent Surveillance-Broadcast (ADS-B) receivers built as an additional payload on Iridium NEXT, the second generation satellite constellation to be launched by Iridium in the 2015-2017 period.
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.
"Despite the progress being made around the world, we are all limited by the geography of the world's oceans, and by mountain ranges and remote areas that are difficult to reach," said John Crichton, President/CEO of NAV CANADA. "Aireon promises to circumvent these geographical barriers, extending the benefits of ADS-B surveillance far beyond what was previously thought possible. In addition, the Aireon partnership opens the door to collaboration with other air navigation service providers in other parts of the world."
The agreement provides for NAV CANADA to acquire up to a controlling interest in Aireon, currently a wholly owned subsidiary of Iridium. Under the agreement, NAV CANADA will purchase Series A preferred membership interests representing up to 51 per cent of the fully diluted equity of Aireon. The aggregate total investment in this venture is up to US $150 million.
This investment will be made in five tranches, each subject to the satisfaction of various operational, commercial, regulatory and financial conditions. Payment for the first tranche – amounting to US $15 million and representing 5.1 per cent of the fully diluted equity of Aireon – was made on November 19, 2012. The final tranche is scheduled for late 2017.
"The milestone approach is a prudent way for NAV CANADA to manage its investment in a project of this nature, with each tranche dependent on the achievement of performance milestones," said Crichton.
As announced in June, NAV CANADA also intends to participate in Aireon as a customer, aiming 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. Work is underway on an agreement by which Aireon will provide the required ADS-B surveillance data to NAV CANADA for this purpose.
NAV CANADA estimates customer fuel savings on the North Atlantic alone of over $100 million per year as a result of this new capability, as well as reduced greenhouse gas emissions of 263,000 metric tons of CO2 equivalents annually. Said Crichton: "ADS-B is a proven technology with proven benefits. The level of future savings to airlines and aircraft operators will quickly recoup our planned investment thus providing this project with a strong business case based on customer and environmental benefits."
Once Aireon's data service is established, other ANSPs will be able to subscribe to the Aireon service for their own flight information regions.
"We are pleased to formalize this undertaking," said Crichton. "This is an important milestone in a venture that promises to revolutionize the way the flow of air traffic is managed over the world's oceans, in remote locations and in other areas of the globe requiring more cost-effective alternatives to traditional air traffic surveillance."