•In a virtual reality experiment, we studied the effects of adding augmented reality features to ship navigation equipment on situation awareness and communication about situation awareness, as well as usability and participants’ reflections on augmented reality for ship navigation.•Adding augmented reality features to ship navigation equipment for lookouts increased situation awareness and communication about situation awareness. This indicates higher shared situation awareness and improved collaboration.•The participants judged the AR to be usable and indicated that it made crucial task information more accessible. On the other hand, they highlighted risks of overreliance, information overload, visual clutter, and attention capture.•The applicability of augmented reality for collaboration in safety-critical operations should be studied in further research.