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Aireon LLC, the developer of
the world's first satellite-based global air traffic surveillance system,
announced today that it has finalized a long-term commercial data services
contract with NAV CANADA, further demonstrating Aireon's continued progress
towards transforming air traffic communications and helping to establish the
global value of Aireon's service in the market.
Aireon, a joint venture between Iridium Communications
IRDM and
NAV CANADA, will take advantage of the hosted payload space on Iridium NEXT,
Iridium's second-generation satellite constellation, scheduled for first
launch in early 2015. Aireon will provide space-based air traffic monitoring
services as the new constellation becomes operational, with full capability
expected by 2017.
Not only is Iridium a joint venture partner, but a significant supplier of the
technology and the network platform for the Aireon^SM service. As announced in
June 2012, Aireon is expected 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.
Iridium also expects to receive recurring data communications service fees
from Aireon of nearly $300 million, or approximately $20 million annually once
fully operational, over the life of Iridium NEXT, assuming Aireon continues to
successfully expand beyond NAV CANADA to a global business. In addition to the
nearly half a billion dollars in hosting and data fee revenue from Aireon,
Iridium also expects to see significant potential value from retaining a
substantial interest in the joint venture.
"Iridium has once again capitalized on the unique capabilities of our network
to bring forth a revolutionary capability and a sizable new source of revenue
for Iridium," said Matt Desch, CEO of Iridium. "Aireon is a win-win for all
parties involved, offering significant cost savings to the airlines,
increasing visibility and flight routing for NAV CANADA and other air
navigation service providers (ANSPs), and representing significant new revenue
streams for Iridium."
The Aireon business model is based on delivering fuel and operating cost
savings to the airlines. Aireon will generate recurring service revenue from
air traffic control organizations such as NAV CANADA, by providing near-real
time surveillance over the oceans and remote territories. This will enable air
traffic controllers to safely grant more efficient flight levels and direct
routing for flights over those regions, which will significantly reduce fuel
burn. NAV CANADA and other ANSPs plan to cover the cost of the service by
charging the airlines a fee that amounts to a fraction of the fuel cost saved,
allowing a majority of the benefits to accrue to the airlines.
Through a continued partnership with NAV CANADA, Iridium has established an
end-to-end business model for oceanic ADS-B surveillance. NAV CANADA is
ideally suited to be the first customer of Aireon because it manages the
second largest air navigation service and is the largest provider of oceanic
services in the world by traffic volume. In its North Atlantic operation, in
close conjunction with its operating partners, NATS UK and the Irish Aviation
Authority, NAV CANADA provides air traffic management for approximately 1,200
flights per day – the busiest oceanic airspace in the world. As a customer,
NAV CANADA will benefit from enhanced air traffic surveillance services that
will enable commercial airline operations to be more efficient and more
environmentally friendly.
"The services provided through Aireon represent great value to the airlines
and ANSPs," said John Crichton, President and CEO of NAV CANADA. "The
transformational impact that space-based aircraft surveillance will have on
aircraft operations is expected to result in more than $125 million per year
in fuel savings through more efficient flight paths in the North Atlantic
alone. We are proud to be on the front lines of this initiative as both a
customer and a partner in the joint venture."
The data services agreement with NAV CANADA establishes a path forward for
commercial agreements with the world's air navigation service providers.
Aireon expects to focus initial sales in the busy North Atlantic, with
significant service revenue potential to Aireon from North Atlantic ANSPs
alone through the projected life of Iridium NEXT.
"Since we announced Aireon last June, international ANSP interaction and
involvement has grown at a rapid pace, and we are excited to have finalized an
agreement with NAV CANADA as our first air traffic control customer," said Don
Thoma, president and CEO, Aireon. "From Aireon's perspective, we are committed
to taking this transformational capability to the whole world, starting with
the busy North Atlantic airspace and expanding into other oceanic regions as
well as remote land masses and countries without extensive air traffic
infrastructure. This is the first of many contracts we expect to sign over the
coming years, and we are excited to see continued interest from the FAA and
international ANSPs."
Aireon is the product of Iridium's commitment to establish an innovative use
of the hosted payload capability available on Iridium NEXT. The sophisticated
ADS-B 1090 MHz Extended Squitter (ES) receivers on every Iridium NEXT
satellite will complement ground-based air navigation systems currently in use
by seamlessly relaying, in near-real time, the GPS position and track
information from aircraft flying over oceans, poles and remote regions to air
traffic controllers on the ground. 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.
About Iridium Communications Inc.
Iridium is the only mobile voice and data satellite communications network
that spans the entire globe. Iridium enables connections between people,
organizations and assets to and from anywhere, in real time. Together with its
ever-expanding ecosystem of partner companies, Iridium delivers an innovative
and rich portfolio of reliable solutions for markets that require truly global
communications. The company has a major development program underway for its
next-generation network – Iridium NEXT. Iridium Communications Inc. is
headquartered in McLean, Va., U.S.A., and its common stock trades on the
NASDAQ Global Select Market under the ticker symbol IRDM. For more information
about Iridium products, services and partner solutions, visit www.iridium.com.
About Aireon LLC
Headquartered in McLean, Va., Aireon LLC is a joint venture between Iridium
Communications Inc.
IRDM and NAV CANADA to provide air traffic
management service providers with the capability to track aircraft anywhere in
the world in near-real time, including the only coverage over oceanic, polar
and remote regions. Aireon will harness the best of aviation surveillance
advancements already underway and extend them globally in order to
significantly improve the business of air operations through increased
efficiency, expanded safety, worldwide integration and significant cost
savings to airlines and ANSPs alike. For more information about Aireon, visit:
www.aireon.com.
About NAV CANADA
NAV CANADA is the private sector, non-share capital corporation that owns and
operates Canada's civil air navigation service (ANS). NAV CANADA co-ordinates
the safe and efficient movement of aircraft in Canadian domestic airspace and
international airspace assigned to Canadian control. Through its coast to
coast to coast operations, NAV CANADA provides air traffic control, flight
information, weather briefings, aeronautical information, airport advisory
services, and electronic aids to navigation. ANS facilities include seven area
control centres and 41 control towers. The Company also operates 56 flight
service stations and eight flight information centres. These facilities are
supported by a network of over 1,000 ground-based aids to navigation located
across the country. For more information, visit www.navcanada.ca
Forward-Looking Statements
Statements in this press release that are not purely historical facts may
constitute forward-looking statements as defined in the Private Securities
Litigation Reform Act of 1995. Forward-looking statements include statements
regarding the development and deployment of the Iridium NEXT system, the
development and deployment of the Aireon hosted payload, the development of
Aireon as a global business, the receipt by Iridium of hosting and data
services fees from Aireon and the benefits of the Aireon system. Other
forward-looking statements can be identified by the words "anticipates,"
"may," "can," "believes," "expects," "projects," "intends," "likely," "will,"
"to be" and other expressions that are predictions or indicate future events,
trends or prospects. These forward-looking statements involve known and
unknown risks, uncertainties and other factors that may cause the actual
results, performance or achievements of Iridium to differ materially from any
future results, performance or achievements expressed or implied by such
forward-looking statements. These risks and uncertainties include, but are not
limited to, uncertainties regarding the health, capacity and content of
Iridium's current satellite constellation, the development of and transition
to Iridium NEXT, Aireon's ability to successfully develop and deploy the
Aireon system and establish Aireon as a global business, as well as general
industry and economic conditions, and competitive, legal, governmental and
technological factors. Other factors that could cause actual results to differ
materially from those indicated by the forward-looking statements include
those factors listed under the caption "Risk Factors" in the company's Form
10-K for the year ended December 31, 2012, filed with the Securities and
Exchange Commission ("SEC") on March 5, 2013. There is no assurance that
Iridium's expectations will be realized. If one or more of these risks or
uncertainties materialize, or if Iridium's underlying assumptions prove
incorrect, actual results may vary materially from those expected, estimated
or projected. Iridium's forward-looking statements speak only as of the date
of this press release, and Iridium undertakes no obligation to update
forward-looking statements.
CONTACT: Press Contact:
Ashley Eames
Iridium Communications Inc.
+1 (703) 287-7476
ashley.eames@iridium.com
Investor Contact:
Steve Kunszabo
Iridium Communications Inc.
+1 (703) 287-7570
steve.kunszabo@iridium.com
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