Adacel secures new $93m air traffic management contract from the US’ Federal Aviation Administration

An ever-dynamic sector eager for constant enhancement, the air traffic control software industry is continually adapting to support the growing global aviation sector. It is now incorporating automation, AI, and cybersecurity to fulfil industry demands. In line with this progress, Adacel (ASX: ADA), an air traffic management company, has secured a new contract from the Federal Aviation Administration (FAA).

This contract, worth USD $59 million (approx AUD $93m) for five years, covers a wide range of services related to the current Tower Simulation Systems (TSS) network. It includes maintaining and supporting TSS hardware, as well as completely updating all major components in both the large and small TSS systems and TSS Mobile Units.

“As the FAA TSS software Original Equipment Manufacturer (OEM), Adacel brings unique knowledge and unparalleled experience with these systems, which will ensure minimal disruptions to training throughout the program’s duration. We are steadfastly committed to making robust, consistent training a daily reality at the FAA,” shared Daniel Verret, Adacel’s CEO. 

The TSS program support includes a dedicated Help Desk staffed by knowledgeable technical and Air Traffic Control Subject Matter Experts (SMEs). It also offers access to Adacel’s Training System Support Center (TSSC), on-site Field Service Representatives/Technicians (FSRs/FSTs), and the use of Adacel’s Web-Based Integrated Data Environment (WIDE) data repository. There are no important conditions that need to be fulfilled for this agreement to become legally binding.

Verret mentioned that the agreement extends the commercial partnership between the two organisations. With a remarkable industry track record of more than 35 years, Adacel is confident that it is well-suited to collaborate with the FAA in providing support for the TSS program’s new phase. This is particularly noteworthy because the Company has been supporting the world’s largest TSS program for over two decades with a record of exceptional system availability.

Adacel specialises in developing advanced air traffic control simulation and training systems and air traffic management solutions. Adacel’s client base includes international air navigation service providers (ANSPs), military, defence & security organisations, universities, and airport authorities.

The Company’s Aurora ATM software currently oversees over 21% of global airspace. The MaxSim Tower Simulator and Training systems are at the forefront of the industry with the most installations worldwide. MaxSim is also the world’s first ATC simulation system to introduce Virtual and Mixed Reality training in classrooms. Adacel’s latest flagship, REVAL, is a digital Air Traffic Control (ATC) tower system offering a range of digital tower solutions, including consulting, system design, development, deployment, and support.

In the full year ending 30 June 2023, Adacel posted revenues of US$27.3m, slightly down from the US$27.6m achieved in FY22. The NPAT was US$0.08m, a decrease from US$3.2m in FY22. The Company closed the year with a net cash balance of USD$0.9m and paid a total dividend of US$2.4m, compared to having US$1.9m in cash and paying out US$3.3m in dividends as of 30 June 2022.