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Nav Canada To Invest Up to $150M in Aireon
NAPLES, Italy — Canada’s air navigation authority, Nav Canada, will invest up to $150 million in Iridium’s Aireon satellite-based air-navigation venture in five tranches starting with a $15 million cash payment made Nov. 19, Nav Canada announced.
Ottawa, Ontario-based Nav Canada’s investment had been expected ever since McLean, Va.-based Iridium announced the formation of its Aireon subsidiary earlier this year.
Nav Canada Chief Executive John Chrichton said in statement that Nav Canada’s gradual approach to Aireon ownership, which in principle will result in a 51 percent equity stake in the venture, “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.”
Nav Canada said commitment of the four other investment tranches will depend on “operational, commercial, regulatory and financial conditions.” The final payment is expected in 2017.
Iridium is installing Automatic Dependent Surveillance-Broadcast (ADS-B) receivers on Iridium’s 66 second-generation constellation of satellites, called Iridium Next, which are scheduled to be placed into orbit between 2015 and 2017.
Iridium, which has said it will remain a minority Aireon shareholder, expects to receive some $200 million in one-time fees in return for hosting the Aireon gear on the Iridium satellites, as well as annual payments in return for providing the service to Aireon.
Aireon and Iridium officials have said the service, which they expect to attract other investors, will permit airlines to reap huge fuel savings by permitting planes to fly more efficient routes, with closer spacing between aircraft.