Canada’s private sector civil air navigation service provider Nav Canada has made its second investment in Aireon, its air traffic management hosted payload joint venture with MSS operator Iridium.
Nav Canada invested US$40m in the venture, upping its…
Canada’s private sector civil air navigation service provider Nav Canada has made its second investment in Aireon, its air traffic management hosted payload joint venture with MSS operator Iridium.
Nav Canada invested US$40m in the venture, upping its stake by a further 13.6% to 18.7%.
The funding was the second of five tranches of investment that the company is due to make, subject to the satisfaction of certain operational, technical, commercial, regulatory and financial conditions.
Nav Canada paid the first tranche in November 2012, investing US$15m for a 5.1% holding. Under its agreement with Iridium, the Canadian company will make five payments totalling US$150m and will ultimately end up with 51% of the JV.
The final tranche is scheduled for late 2017, when Iridium’s second generation constellation NEXT will by fully launched and operational.
There is also an option for Nav Canada to acquire up to an additional 19% of Aireon under certain circumstances.
In April 2013, Nav Canada became Aireon’s first customer signing a long-term commercial data services contract.
While financial details of that contract were not disclosed, Iridium has outlined that it expects to receive recurring data communications service fees from Aireon of nearly US$300m over the life of Iridium NEXT, or approximately US$20m annually once fully operational. This is based on the assumption that ‘Aireon continues to successfully expand beyond Nav Canada to a global business’.
To that end, Iridium CEO Matt Desch previously told SatelliteFinance that other ANSPs (air navigation service providers), particularly the US FAA (Federal Aviation Administration), have expressed an interest in both utilising the Aireon services as well as potentially investing in it.
Formed by Iridium and Nav Canada in June 2012, Aireon intends to track commercial aircraft and provide that information in near-real time to air traffic controllers for a fee. To do so, Harris is building a hosted payload for the Iridium NEXT constellation that would enable the satellites to receive the Automatic Dependent Surveillance-Broadcast (ADS-B) position signals from aircraft.
As a result of this new capability, Nav Canada estimates that airline customer fuel savings on the North Atlantic route, the busiest oceanic airspace in the world with some 1,200 flights per day, would be over US$125m per year.
