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HELICOPTER AIR SERVICE PROGRAM    13

With IFR capability they should be able to approach the record of the fixed-wing operators.  This improved reliability will be an important factor in attracting more passengers to helicopter service.  The completion of a higher percentage of scheduled flights will also permit more effective utilization of equipment, personnel, and ground facilities. 

As the operators gain more experience with their new equipment, the time between overhauls for engines and components will be extended. There is every reason to believe that the helicopter turbine engines will be able to achieve a maintenance record similar to that being made by the engines in today's large jet transports.  This is another factor that will contribute to lower unit operating costs, higher aircraft utilization, and more reliable service for the traveling public. 

While it is not possible to place a price tag on each of these items or to know exactly the effect they will have on the individual carriers in the years ahead, it is clear the the cumulative effect will be of considerable help in maintaining the downward trend in operating costs and the upward trend in load factors and revenues. 

While the anticipated results will not come about overnight, on the basis of past experience and continuing improvement in operating results, it is reasonable to expect that this proposed subsidy phaseout can be realized, with the carriers thereafter being in a position to continue operations without subsidy support.

In this connection, it is worth noting that there is an additional national interest factor supporting the Board's action.  The export sales by American manufacturers of helicopters are substantial, and play a significant role in the balance of payments.

The interest of prospective foreign purchasers of such aircraft is stimulated by the commercial operations, as well as by the opportunity for such purchasers to be trained by the subsidized operators. 

The elimination of subsidy payments not only would be interpreted abroad as governmental disapproval of such operations and of the equipment, but would also remove the source of such observation and training in the use of equipment through the cessation of the existing operations.  Thus, the principal factor stimulating such sales would be lost, with an adverse effect of the balance of payments.

To recapitulate, the Board is of the view that the public interest supports these proposals.  As we have pointed out, they are designed to permit the present continuation of a useful service with a possibility such operations will become subsidy free, and that, thereafter, such services can be extended to other metropolitan areas throughout the Nation. 

They will protect the Government's investment in these services, which will approximate $50.8 million at the close of fiscal 1965, and that of private investors which approximates $9.2 million, at a time when the helicopter experiment shows a real prospect of ultimately being successful.

Thank you, Mr. Chairman.

Senator MONRONEY. Thank you very much, Mr. Boyd, for a very fine, comprehensive, thorough, and factual statement.

I would like to ask-you have given me the dollar value of the subsidy, which you said is about $4 million at the present time-