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period, equivalent to 12.1 months' adjusted cash operating expenses. In accordance with 
settled Board policy, working capital in excess of $200,000, equivalent to three months' adjusted cash operating expenses, has not been recognized in the carrier's investment base.
"The Board's action in this case should not, however, be construed in any manner 
as a criticism of New York Airways' equity financing program which, through two 
successful sales of capital stock, has apparently resulted in working capital in excess of current requirements in the review period. On the contrary, the Board views the carrier's financial program as an example of sound and timely financing which has clearly been basic to the carrier's financial stability. Moreover, at such time as that portion of the investment which is not recognized herein may become used and useful in the certificated operations, appropriate claim may be made for its recognition in the investment 
 base."

FUTURE OBJECTIVES

Planning for 1954 includes inauguration of mail and freight service between Manhattan Island and the metropolitan airports; the inauguration of your Company's first suburban passenger service between the metropolitan airports and Trenton; such improvements in the mail service as may be requested by the Post Office Department, which may involve eliminating some stops presently served and the addition of some new stops; and the opening of passenger service to Bridgeport.

As pointed out above, your Company's technical staff has an impressive store of technical knowledge and operating experience. The staff is constantly searching for improved operating techniques. New developments in helicopter design and navigational aids are continuously under review. To the end that new and improved designs of helicopters for use in scheduled transport operations may be available as soon as possible, New York Airways has offered the benefit of its technical experience to the principal helicopter manufacturers.

Your management believes that its technical staff can render important contributions to the military services in the testing of new military transport helicopters now in production and in working out improved maintenance procedures. Proposals to the military services are presently under discussion.

   New York Airways also intends vigorously to pursue the development of passenger, freight and other commercial revenue, so as to decrease, to the maximum possible extent, the Company's dependence on subsidy payments for the carriage of mail.

I must regretfully report the resignation of Mr. John L. Senior, Jr. from the Board of Directors on April 5, 1954, because of the pressure of other activities. Mr. Senior founded New York Airways and was instrumental in the proceeding before the Civil Aeronautics Board which culminated in the issuance of the Company's Temporary Certificate of Public Convenience and Necessity.

Finally, at the conclusion of the first full calendar year of your Company's operations, I would like to express my sincere appreciation for the faithful services performed by the Company's personnel, as a result of which New York Airways has successfully completed this inaugural period in a new field of scheduled air transportation.

BY ORDER OF THE BOARD OF DIRECTORS.
Robert L. Cummings, Jr.
President
April 8, 1954