Hughes to Update Canada’s Air Traffic Control System

Hughes Aircraft Co. has won a $325-million contract to modernize Canada’s air traffic control system, beating out International Business Machines Corp. and partially avenging last year’s loss of a huge U.S. contract for a similar system.

The Canadian Department of Transport contract puts the Fullerton-based Ground Systems division back into the air traffic control business and vastly improves the division’s chances of winning further overseas business, a Hughes spokesman said.

Last year, IBM beat out Hughes for a $3.6-billion Federal Aviation Administration air traffic control contract, underbidding Hughes by about $700 million. Hughes spokesman Dan Reeder said that this time around, Hughes’ bid was judged to be superior to IBM’s in terms of price, technical quality and the industrial benefits to Canada.

Hughes will build the system at a new subsidiary of Hughes Canada to be based in Richmond, British Columbia, a suburb of Vancouver. About 80% of the work will take place in Canada, according to Reeder, though the project will be supervised by the Ground Systems division in Fullerton.

Several dozen employees from that group may be transferred to British Columbia on a temporary basis, Reeder added, but the project will not create a significant number of new jobs here.

Reeder said air traffic control contracts worth about $20 billion would be awarded over the next few decades, and that Hughes was now well-positioned to get a share.