Nav Canada to invest $150 mln in air traffic venture with Iridium
By Sagarika Jaisinghani
Nov 19 (Reuters) - Nav Canada, the private company that manages air traffic over Canada, said it would spend $150 million for a controlling stake in a joint venture with Iridium Communications Inc that will track planes over oceans in real time.
Nav Canada, which gets its money from airline fees, will make the investment in five installments through 2017, giving it a 51 percent stake in the joint venture, Aireon LLC.
The joint venture, first announced in June, will allow aircraft to fly longer in better weather -- saving fuel, decreasing carbon emissions and increasing passenger safety.
Air traffic authorities currently need to keep aircraft widely spaced due to lack of radar visibility over oceanic airspace and mountainous terrain.
"We're confident the North Atlantic (air traffic) will substantially cover most of the costs of Aireon but it won't cover all of them, so we need other parts of the world as well," Nav Canada Chief Executive John Crichton told Reuters.
"We're interested in other air navigation service providers becoming investors."
Iridium, which will own the rest of Aireon, said while costs of setting up the new venture were covered for now, it would be open to taking on other investors.
The companies said they have yet to decide how much they will charge for Aireon's services, which Nav Canada estimated would save airlines over $100 million in annual fuel costs on their North Atlantic routes alone. Continued...