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MCLEAN, VA. (June 19, 2012) – For the first time ever, air traffic management agencies around the globe will be able to continuously track aircraft anywhere in the world. Aireon LLC, a planned joint venture announced today by Iridium Communications Inc. (Nasdaq: IRDM), will make this transformation possible.
Aireon will deliver this revolutionary surveillance capability to Air Navigation Service Providers (ANSPs) around the world and their commercial airline customers through a planned joint venture between Iridium and NAV CANADA with support from the U.S. Federal Aviation Administration (FAA) and suppliers Harris Corporation (NYSE:HRS) and ITT Exelis (NYSE:XLS). NAV CANADA, whose participation is subject to the completion of formal agreements in the near future, intends to be Aireon’s first customer. Aireon will enable fully global and continuous space-based monitoring and control of aircraft, even over oceans and remote regions where it is not currently possible.
Aireon’s service will use space-qualified Automatic Dependent Surveillance-Broadcast (ADS-B) receivers built into each of the 66 satellites in Iridium NEXT, Iridium’s second-generation satellite constellation, to deliver this transformational capability. Iridium NEXT satellites are scheduled to launch from 2015 to 2017, and will provide this capability as the new satellites are commissioned, with full service expected by 2017. Aireon’s new offering will enable commercial airline operations to be more efficient, safer and more environmentally friendly.
Today the world is divided into Flight Information Regions where ANSPs safely manage aircraft within their designated coverage areas. For example, across the heavily traveled North Atlantic, the FAA, NAV CANADA and NATS in the UK manage traffic between points in Europe and North America but need to keep aircraft widely-spaced in part because of the lack of radar visibility over oceanic airspace. Aireon will provide complete visibility to all aircraft everywhere, helping ANSPs decrease inefficiencies.
NAV CANADA is ideally suited to be a partner in Aireon since it manages the second largest air navigation service in the world by traffic volume. In its North Atlantic operation, NAV CANADA provides air traffic management for 1,200 flights per day – the busiest oceanic airspace in the world. NAV CANADA operates one of the world’s most advanced oceanic air traffic management systems, and has been a pioneer in the use of ADS-B over remote areas and now into the North Atlantic through ADS-B ground stations over Hudson Bay, the Eastern Arctic and Greenland.
“I am excited that Iridium will once again be able to use its unique global satellite network to expand connectivity beyond the limitations of ground-based systems,” said Matt Desch, CEO of Iridium. “Just as we opened the world of personal communications far beyond the ten percent of the Earth’s surface that is covered by terrestrial networks, we are now extending the reach of land-based aircraft tracking systems. This is a big milestone for commercially hosted payloads and it will be a ground-breaking use of Iridium NEXT. Iridium is the only company with the capability and reach to enable this, and we are thrilled that our service will make air travel more efficient and safer. Aireon is truly revolutionary.”
For Iridium, Aireon is the product of its multi-year commitment to establish an innovative use of the hosted payload capability that will be available on Iridium NEXT. The 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, position and status information of 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 cover less than 10 percent of the world, to the entire planet. The Iridium NEXT constellation, a low-Earth orbiting (LEO) system of inter-linked satellites, is the only system that will be able to seamlessly provide ADS-B coverage globally.
“We have pulled together a world-class team of experts in air traffic management and communications to make this venture possible,” added Don Thoma, president and CEO of Aireon and an Iridium executive vice president for more than a decade. “By bringing together Iridium, NAV CANADA, Harris and Exelis, Aireon will represent unparalleled experience in developing and deploying advanced air traffic surveillance systems. Together, we will create a very unique and important service, and we are poised to help the aviation industry evolve to new levels of efficiency and safety.”
Multinational mandates alreaIridium in McLean, Va.dy require commercial aircraft to be fitted with ADS-B transmitters. Given that such upgrades are already underway (and required to be completed in U.S. airspace by 2020 as part of the FAA’s NextGen initiative), Aireon will enable air carriers to maximize returns on billions of dollars in aircraft avionics upgrades they are already making without the need for any additional onboard equipment. They will benefit from improved climb profiles, more flexible routing, and more efficient use of airspace – saving substantial fuel and time on oceanic routes.
“NAV CANADA and other ANSPs around the world have made significant progress in our efforts to enhance flight efficiency in oceanic airspace using today’s technologies and procedures; however, there are still significant limitations due to the absence of viable surveillance over most of the world’s oceans,” said John Crichton, president and CEO of NAV CANADA. “These limitations ultimately waste fuel and increase carbon emissions, despite the best efforts of air traffic services personnel. Aireon will enable a quantum improvement. For that reason, NAV CANADA aims to be a major user of this new ADS-B capability, starting with the busy North Atlantic airspace. Furthermore, we feel that this Iridium innovation is so important to the future of air traffic management – with significant transformative potential – that we have decided to become a partner in this venture, subject to the completion of formal agreements.”
In the U.S., the FAA has been working with Iridium and the Aireon team over the past year to evaluate the capabilities of space-based ADS-B systems.
“Because the insight and control of air traffic management through space-based ADS-B is unparalleled, the FAA will be engaged with Iridium and its Aireon partners in setting the specifications and configuration of space-based ADS-B surveillance,” said Chris Metts, FAA air traffic vice president, Program Management Organization.
Aireon will deliver significant value to both public and private stakeholders in the global aviation community. Planned benefits delivered by Aireon will include:
Operational Cost-Savings – Through optimal routing and increased capacity, Iridium estimates that Aireon will enable airlines to save approximately $6-8 billion in fuel costs just on their North Atlantic, and North and Central Pacific, routes over the initial 12-year period from when Aireon becomes operational in 2018.
Lower Environmental Impact – Optimal routing, whereby planes are enabled to climb rapidly to, and fly longer at, more efficient altitudes and in better weather conditions, could reduce carbon emissions significantly. When fully operational, Iridium estimates that Aireon could save the carbon equivalent of removing approximately two million cars off the road annually.
Extended Operational Safety – For the first time ever, continuous global surveillance will allow ANSPs to extend safety benefits in air travel to all airspace globally. Aireon will make the air traffic control capabilities of ADS-B, the technology underlying the U.S. and Canada’s next-generation air traffic management upgrade programs, available to all nations – large and small – broadening safety in regions of the world that have not yet implemented ADS-B.
“I was involved in the very early stages of NextGen,” said Norman Mineta, former U.S. Secretary of Transportation and chairman of the Aireon Advisory Board. “We had previously thought that this kind of capability was not economically feasible for a government agency to undertake alone. So, it’s exciting to see a cutting-edge commercial team working to bring this to life faster and less expensively through an innovative public-private partnership. The organizations involved in Aireon are visionary and will take on a key leadership role in how the world manages its air traffic in the future.”
Exelis has been the systems engineering provider for Aireon and has extensive experience collecting and providing air traffic information as the operator of the FAA’s ground-based ADS-B system.
“Exelis has been working closely with Iridium on the development of the space-based ADS-B system applying our experience designing, deploying and operating the terrestrial ADS-B network in the U.S., which serves as the backbone of the FAA’s NextGen initiative,” said Mike Wilson, president of Exelis Information Systems. “With this proposed joint venture our goal is to ensure that the space-based ADS-B service offered by Aireon seamlessly integrates with, and extends, existing ground-based services, setting a foundational building block of a globally harmonized space-based air traffic management system.”
Harris Corporation has been selected as the payload provider for Aireon after an extensive, competitive process. Leveraging more than 50 years of space experience and a close relationship with the FAA, Harris will provide 81 space-qualified ADS-B receivers to fly as hosted payloads on Iridium NEXT, including in-orbit and ground spares.
“This is the most significant hosted payload program in the space industry to date,” said Bill Gattle, Harris Corp. vice president of space systems. “Through our partnership with Aireon, we will leverage our deep technical expertise in space payloads and air traffic control systems to deliver extremely flexible solutions at an affordable cost.”
Assuming the successful negotiation of long-term service contracts with NAV CANADA and other ANSPs, and related financings, Aireon is expected to generate approximately $200 million in one-time hosting fees for the integration and launch of the payloads between 2014 and 2017. Iridium also expects to receive annual data fee revenue and have a significant retained interest in Aireon, which will evolve it from being the largest shareholder today to between 40-50 percent ownership during the deployment of Iridium NEXT. The Company expects that Aireon will be accommodated on future Iridium constellations, enabling continuity of its operations well beyond 2030.
Fieldstone Partners and NEXA Capital Partners are advising and supporting Iridium in the formation of Aireon LLC. Aireon LLC, a Delaware limited liability company, will be headquartered with Iridium in McLean, Va.
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 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 58 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.
About ITT Exelis
ITT Exelis is a diversified, top-tier global aerospace, defense and information solutions company with strong positions in enduring and emerging global markets. Exelis is a leader in networked communications, sensing and surveillance, electronic warfare, navigation, air traffic solutions and information systems with growing positions in cyber security, composite aerostructures, logistics and technical services. The company has a 50-year legacy of innovation and technology expertise, partnering with customers worldwide to deliver affordable, mission-critical products and services for managing global threats, conflicts and complexities. Headquartered in McLean, Va., the company employs about 20,500 people and generated 2011 sales of $5.8 billion. For more information, visit www.exelisinc.com.
About Harris Corporation
Harris is an international communications and information technology company serving government and commercial markets in more than 150 countries. Headquartered in Melbourne, Fa, the company has approximately $6 billion of annual revenue and about 17,000 employees — including nearly 7,000 engineers and scientists. Harris is dedicated to developing best-in-class assured communications® products, systems, and services. Additional information about Harris Corporation is available at www.harris.com.
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 launch of Iridium NEXT; the development of the Aireon payload; the execution of the Aireon joint venture agreement, related supplier agreements and customer agreements; anticipated hosted payload arrangements; the development of the Aireon product portfolio and the size of the addressable market; anticipated financial benefits to the Company from Aireon, including anticipated hosting fees, data fees and equity value, and the benefits of Aireon to the aviation community. 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 Iridium’s ability to maintain the health, capacity and content of its satellite constellation, and the development of and transition to Iridium NEXT, including expanded capacity and features, the development and integration of the Aireon hosted payload, and the market for Aireon’s services, 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 period ended December 31, 2011, filed with the Securities and Exchange Commission on March 6, 2012. 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.