Aireon has signed a credit facility agreement for US$200 million with a group of several independent investor funds, led by Deutsche Bank.
This credit facility provides Aireon with the resources to fund various company initiatives and to continue to pay Iridium for the costs related to the integration, launch and hosting of the Aireon payload on each of the 81 Iridium NEXT satellites.
The agreement was signed on December 21, 2018 and comes just days after the final launch of Iridium NEXT satellites and their Aireon hosted-payloads.
“This credit facility is a vote of confidence in Aireon’s business model and a testament to the team, technology, investors and our role in the future of the aviation industry,” said Rich Nyren, chief financial officer at Aireon. “Iridium, as one of the founding partners with NAV CANADA, enabled the Aireon opportunity through its US$3 billion investment in the incredible Iridium NEXT satellite constellation. Aireon has benefited by this relationship, and this facility now provides a vehicle by which Aireon can more quickly pay Iridium for access to this prime real estate in orbit.”
Sunil Sharma of Deutsche Bank commented: “Deutsche Bank is delighted to have worked with Aireon and its key shareholders on this landmark financing in the air traffic control and satellite sectors. We look forward to working with the management team towards the commencement of the company’s full scale commercial operations in 2019.”
The eleven long-term contracts signed with its launch air navigation service provider (ANSP) customers have provided Aireon with a strong financial foundation. Aireon has already started paying the US$200 million hosting fee owed to Iridium, and this new credit facility has enabled the company to pay another US$35 million in 2018 for a total of US$43 million to date.
The Aireon system is scheduled to go live in the first quarter of 2019, beginning with operational trials over the North Atlantic Ocean with the Canadian and British ANSPs, NAV CANADA and NATS.
Additional deployment will occur in NAV CANADA’s Edmonton airspace. Once operational, the Aireon system will enable a complete global picture of international air traffic, in real time, offering air traffic controllers, airline operators and industry stakeholders the first ever and never-before-possible visibility of global air traffic.
This capability will usher in an era of enhanced safety, as well as enable on-the-fly route adjustments, more direct flightpaths, improved fuel efficiency and increased predictability.