NAV CANADA is the non-share capital, private corporation which owns and operates Canada's civil air navigation service (ANS). NAV CANADA is a private company and not a federal agency, though its safety performance is regulated by Canada's Transport department. It purchased the system from the federal government, on November 1, 1996, for $1.5 billion. The company is responsible for the safety and efficiency of the ANS. It provides customers (airlines and aircraft owners and operators) with air traffic control, and other air traffic services. It employs some 5,500 staff, similar to NATS.
NAV CANADA operates on a break-even basis. Year-end financial results for fiscal year 2000-2001 show revenues matching expenses, at $Canadian 916 million. The company has no shareholders and is financed through the debt markets. NAV CANADA has $2 billion in long term bonds at very favourable rates due to a high "AA" credit rating.
The company is governed by a stakeholder Board of Directors with representation from the four founding members of the company: airlines, general aviation, the federal government and bargaining agents representing employees. Each of the four members has representation on the Board as follows: airlines -4; general aviation - 1; federal government - 3; bargaining agents - 2. These 10 directors then elect four independent directors, and the Board appoints the President and Chief Executive Officer.
Since 1998 NAV CANADA's revenues have come from service charges paid by its customers. Airlines now pay 35% less than they used to collect from passengers for Air Traffic Services under previous arrangements.
In 2001, there were approximately six million aircraft take-offs, landings and overflights in domestic airspace and international airspace assigned to Canadian control. Despite a 20 percent increase in air traffic volume since NAV CANADA acquired the service in 1996, it has maintained one of the world's best safety records, with slightly more than two operating irregularities per 100,000 aircraft movements -compared to 2.6 in 1996. This has been achieved while at the same time reducing delays in air traffic control.
Since taking over the ANS, the company has invested over $700 million in new systems and technologies. Though affected by the current industry downturn, the company developed a balanced plan to make up for an anticipated $145 million revenue shortfall in the fiscal year ending August 31, 2002. The plan involves $85 million in cost reductions, $30 million in new revenue and revenue from a rate stabilization fund set up mitigate the risk of downturns in revenue, and $30 million from a 6 per cent increase in charges from January 1, 2002. Subsequent to September 11, 2001, Moody's Investors Services and Standard and Poors reviewed all major aviation credits in North America. NAV CANADA was the only large credit that escaped a downgrade and had its AA+ rating maintained.
In 2001, NAV CANADA received the Eagle Award from the International Air Transport Association (IATA). The company was cited as a unique example of a successful conversion of a government bureaucracy into an efficient corporate operation. The award praised NAV CANADA's productivity improvements, responsiveness to customers, and its success in deploying new technology and innovative procedures to help airlines save fuel and reduce emissions.