Aireon Air Traffic Navigation Venture Nets $120 Million in New Investment
Updated at 3:15 p.m. Eastern time
WASHINGTON — Air navigation service providers in Denmark, Ireland and Italy have taken equity stakes in the Aireon satellite-based aircraft tracking and routing venture, committing a combined $120 million in fresh capital that will see company through to the start of operations in 2017.
In a press release Dec. 20, Aireon said air navigation service providers (ANSPs) Enav of Italy, the Irish Aviation Authority and Denmark’s Naviair have joined Nav Canada andCommunications as investors in Aireon of McLean, Va. Canadian ANSP Nav Canada in 2012 agreed to invest about $150 million in the service, while Iridium Communications, which will host the Aireon payloads on its Iridium Next low-orbiting communications satellites, is kicking in $12.5 million.
“This a major milestone for Aireon as it provides us with the capital we need to build the payloads, ground systems and fund operations until we go operational in 2017,” Don Thoma, president and chief executive of Aireon, said via email about the new investments.
Aireon’s system will relay precise position-location data on in-flight aircraft, enabling them to fly more efficient routes and thus save on fuel costs. The company hopes to sell the data to air traffic control organizations around the world.
The new investments will be made in four tranches between 2014 and 2017 as certain Aireon milestones are met, the press release said. In 2018, a portion of Iridium Communications’ ownership stake will be redeemed for a $120 million payment from Aerion, resulting in a new ownership structure with Nav Canada holding 51 percent, Iridium with 24.5 percent, Enav at 12.5 percent and the Italian Aviation Authority and Naviair each holding 6 percent.
“The new partners are equity owners and will be customers in the future when we deploy the system. … We don’t see the need to raise any more equity,” Thoma said in response to SpaceNews questions.
Thoma said Aireon does expect to raise debt financing based on future ANSP contracts to help cover the Iridium hosting fees.
“We are excited to see continued interest from ANSPs in becoming both investors and commercial partners of Aireon, the first ever global air traffic surveillance service,” Thoma said in the press release. “By providing the capability to continuously track aircraft anywhere in the world, Aireon is poised to transform the aviation industry. We look forward to collaborating with our partners as we work to build the system, launch it into orbit and make Aireon a reality.”
Aireon will relay Automatic Dependent Surveillance Broadcast data to aircraft via hosted payloads aboard the 66-satellite Iridium Next constellation, which is slated to begin launching in 2015. The hosted payloads are being supplied by Harris Corp.; Exelis Corp. is providing the ground infrastructure.
In his email, Thoma said Aireon sees the U.S. Federal Aviation Administration (FAA) and Britain’s NATS air traffic control service to be future Aireon customers rather than equity stakeholders. Aireon and the FAA currently are exchanging technical data on space-based air traffic management under a cooperative agreement and Aireon also has an FAA contract to provide other data and analysis, he said.
To utilize Aireon’s services, the FAA will have to go through a formal procurement process, Thoma said. “They currently are going through that process and we don’t expect them to complete that process earlier than 2015,” he said. “In the meantime we will continue to work with them to support their involvement in the program.”
The FAA and Nav Canada in June agreed to cooperate in the use of space-based aircraft navigation data services in adjoining air space, he noted.