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NEW ROUTES The company has on application with the C.A.B. and the Post Office a request for approval of a Western Route between Newark and Paterson and an Eastern Route between La Guardia Airport and Farmingdale, L.I.  It is known that the Post Office continues to have interest in those routes where there is a substantial delay in surface transportation of mail by train or truck, such as Trenton, N.J., Bridgeport, Conn., and Paterson, N.J.

EQUIPMENT NYA currently owns and operates five single engine Sikorsky S-55 helicopters.  The helicopters cost $150,000 each and are being depreciated over a three-year period.  The S-55 has an airspeed of about 90 miles prr hour and the commercial version has an available cabin load of about 950 pounds with facilities for up to seven passengers.  At current utilization of about 5 hours per day, operating costs, including general administrative overhead, is about $173 per hour.

MAIL PAY AND RATES  Basic mail pay is now at a rate of $2.58 per ton mile.  The Post Office has approved operation schedules of 34,000 miles which NYA is now operating.  Passenger rates established at a rate of $0.50 to $0.60 per seat mile have been set in accord with C.A.B.'s request which is below current break even operation costs, but this rate helps to test the market and partially defray mail pay costs.

OPERATING RESULTS AND FINANCES:  Under the temporary mail rates as originally set forth operations for the 11 months through November 30, 1953, indicate a deficit of $463,368 or $1.94 per share.  Since mail pay rates were established when no operating or cost experience was available, renegotiation of mail pay is expected to substantially alter these results.  It is always a question as to how much of the actual operating expense the C.A.B. will disallow in computing the final mail pay which is based on permitting a company a return of 8% on capital.  As of November, the financial position of the company showed net working capital of $2.77 per share (mostly U.S. Treasury Bills) and a book value of $7.64 per share.

THE STOCK  The stock, 100,000 shares, offered to the public at a price of $12.50 per share in January, 1953, is currently quoted over-the-counter at 8 1/2 bid - 9 1/2 offered, which is about 28% lower than offering price.  New financing plans are not definite but can be anticipated to accompany the company's need for new equipment when available.  Stockholders of more than 10% include Laurance S. Rockefeller.

We think New York Airways, Inc. has potentially a very valuable franchise.  But in our opinion the stock should not be bought until it is clear the C.A.B. intends and has the power to subsidize the company adequately over the next two or three years.

John H. Lewis & Co.
By: John H. Lewis

January 30, 1954

The information contained herein has been obtained by us from sources believed to be reliable but is not guaranteed and necessarily is not all inclusive.  John H. Lewis & Co. has no interest in any security mentioned herein and any comments made thereon are not to be construed either as an offer to sell or as a solicitation of an offer to buy.

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