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NEW YORK AIRWAYS, INC.
P.O. Box 426
New York Airport Station
Flushing 71, New York

DEfender 5-6600
February 9, 1953

COPY

Civil Aeronautics Board
Accounting and Statistics Division
Bureau of Air Operations
Washington 25, D.C.

Gentlemen:

We are transmitting herewith preliminary Balance Sheet and Statement of Profit and Loss and Earned Surplus, Schedules A and B of CAD Form 41 of New York Airways, Inc., for the period ending December 31, 1952. In submitting these reports, we feel that a word of explanation is required, particularly in view of the matter set forth in CAB Accounting and Reporting Standard Practices Letter No. 3, dated October 22, 1952, subject: "Capitalization of Expenses Applicable to Future Operations", with respect to the classification of expenses as between current and deferred costs.

Our expenses in this period were in substantial measure of an anticipatory character. You will recall that we did not commence operations until October 15, 1952. The enclosed reports, therefore, reflect the results of only the first eleven weeks of our operations.

As in the period prior to October 15, 1952, many of our activities during the subsequent eleven weeks were essentially of a pre-operating character, - such as phasing-in and initial training of operating personnel, the acquisition and installation of operating equipment and other such matters looking toward the build-up of operations to a normal basis. Only one of our present fleet of three Sikorsky S-55 helicopters was on hand on October 15, 1952, the second having been installed in scheduled operations on November 10th and the third on December 10, 1952. In addition, during the period from October 15th to December 10th we were operating only on the inter-airport "triangle" between Newark, LaGuardia and New York International Airports, and it was not until the latter date that operations were extended to our Bridgeport Route (Route "N").

Despite this, the enclosed reports reflect as current expense all costs incurred during the period covered. After some consideration of the matter, it has seemed to us that in view of the brevity and basic abnormality of the period involved and the resulting difficulty of identifying the costs which were purely current in character, an attempt at this time to segregate current and deferrable costs would not serve a useful purpose, - particularly since the period in question and the subsequent year are part of the same open U.S. Mail Rate period. However, if it is felt that such a study should be made, we will be glad to take the matter under further advisement.

Very truly yours,
NEW YORK AIRWAYS, INC.
(SGD) WILLIAM W. HOGAN
William W. Hogan
Treasurer