Nav Canada sees growth in rate stabilization fund

By John Sheridan

June 1, 2005
Aviation Financing, Avionics

After sustaining losses of C$116 million ($91.4 million) after 9/11, Nav Canada, the private, non-share corporation that owns and operates Canada’s civil air navigation system, saw its rate stabilization account–a financial savings buffer to offset downturns in revenue–return to the positive side of the ledger in April.

While the company is a not-for-profit organization, it is applying excess income over planned expenditures to rebuild the stabilization account to $50 million, which it feels will offset any future disturbances. Once it reaches that target, the organization will return excess revenue to the community in the form of reduced user fees. Nav Canada states that its fees are currently about 20 percent less than the government’s previous transportation taxes.

Nav Canada describes the stabilization account as “owned by the customers,” an appropriate description since the company’s policies and future plans are determined by its Board of Directors and its various committees, both composed of individuals representing the airlines, corporate and general aviation employees and their unions and independent specialists.

No group has a majority, and politicians need not apply. The Board of Directors is guided in operational matters by an advisory committee of 18 aviation professionals, including Canadian Business Aviation Association president Rich Gage, who also chairs the company’s level of service sub-committee.

Now in its eighth year, Nav Canada reports that it has reduced its annual operating costs by $100 million by restructuring the previous government organization, while passing on savings of $600 million to its customers. It also exports advanced ATC systems designed and built by its engineering staff, most recently to the UK’s National Air Traffic Services for the Prestwick Oceanic Control Center and the Heathrow, Gatwick and Stansted airports.

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