Italy, Ireland, Denmark invest in Aireon

ENAV, the Italian air navigation services provider, is investing $61 million to acquire a 12.5 per cent of Aireon, the US-based business – part of the Iridium Group – that, by 2018, will create the first global satellite surveillance system for air traffic management.

ENAV has taken the stake in Aireon in partnership with NAV CANADA, its  Canadian counterpart which holds a 51 per cent stake. Ireland’s IAA and Denmark’s NAVIAIR will also each hold a six per cent stake, while the remaining 24.5 per cent will be retained by Iridium. Together, the three new investors have acquired equity worth $120 million in Aireon.

“When we first envisioned Aireon, we recognized not only the enormous potential for transforming the future of air travel, but that Iridium was the only company capable of providing a platform for such a robust solution,” said Matt Desch, CEO of Iridium. “These new investors demonstrate the rapidly growing interest by global ANSPs and are a testament to how valuable the Aireon service will be to the aviation industry. As an investor ourselves, Aireon continues to be a big part of Iridium’s growth strategy, and these agreements further exemplify the success that we expect to see in the coming years.”

“Aireon continues to gain traction as ANSPs and airlines anticipate the benefits of extending air traffic surveillance over the world’s oceans and remote areas, allowing for increased efficiencies and fuel savings,” said Don Thoma, president and CEO, Aireon. “We expect to see more successes in the coming year, as other ANSPs around the globe continue to show great interest in the service Aireon will provide.”

Aireon is the product of Iridium’s commitment to establish an innovative use of the hosted payload capability available on Iridium NEXT. This new capability will extend the benefits of current radar-based surveillance systems, which are estimated to cover less than 10 percent of the world, to the entire planet. Iridium expects that Aireon will be accommodated on future Iridium constellations, enabling continuity of its operations well beyond 2030.

The first satellites of the new surveillance platform for air traffic management and control will be launched in 2015, while the service will be fully operational by 2018. With a constellation of 66 orbiting satellites, the identity, position and altitude of any aircraft worldwide can be determined. Areas monitored by these satellites include those covered by oceans and deserts as well as the poles, which are all currently lacking surveillance and hence an active control over flights.

Through this technology, air traffic can be improved and routes optimised, while achieving the highest levels of flight safety and efficiency. By means of new routes, significant amounts of fuel will be cut, thus leading to savings for airlines and a reduced impact on the environment.

ENAV chief executive Massimo Garbini said it was ‘an investment that will change the history of air traffic control and place ENAV on the global market’. “My view is that this diversification shall increase ENAV’s value, broadening the horizons of the company’s business,” he said.

The agreement features a key role for ENAV in the development of the service for the Mediterranean area and South-East Asia – an area in which it is already operating through its subsidiary in Kuala Lumpur, ENAV Asia Pacific.

In addition to Iridium’s retained interest and the $120 million redemption payment, Aireon has agreed to pay $200 million in hosting fees to Iridium for the integration and launch of Aireon’s Automatic Dependent Surveillance Broadcast (ADS-B) receiver payloads on each of its Iridium NEXT satellites, and ongoing data service fees of nearly $300 million through 2030, assuming Aireon continues to successfully expand into a global business.

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