Viewing page 39 of 507

This transcription has been completed. Contact us with corrections.

HELICOPTER AIR SERVICE PROGRAM      31

Senator MONRONEY. A lower rate would definitely tend to increase the traffic? 

Mr. BOYD. Yes, sir, but I have no idea of the extent. 

Senator MONRONEY. No studies have been made of this? 

Mr. BOYD. No, sir. 

Senator MONRONEY. I wonder if anyone in the airline industry knows if there have been any studies made. 

ATA has statistics on everything. Maybe they will give them to us. 

It seems to me that some place, if you are going to have - we are appropriating $75 million a year for airport subsidies. This is all right, and it is a very good program, and I have been very proud of being the author of that legislation since its beginning.
 
But it seems to me that if we are going to have to build these airports further and furthers out at greater and greater cost to the Federal Government, then some way must be arrived at at how you are going to get from downtown or from the towns to the airports. The jet planes and supersonic will require even greater distances from the cities as new airports are built in the future. 

Consequently, we have to devise some means of rapid transit from downtown to the airport. 

Mr. BOYD. I think that is absolutely correct, and in regard to the helicopter, one thing I hope the committee will keep in mind, what we are talking about here, as you mentioned earlier, is closing a gap. We are talking about a temporary situations as we see it, because we are fully confident that these operators will be able to operate subsidy free within a reasonable period of time with their existing equipment. 

Senator MONRONEY. I am afraid what you mentioned in the phase-out, as you are forced to do by reading, an intelligent reading, of the committee report of the House Appropriations Committee, that to get out of serious problems you are going to have to find someway maybe of a merciful but lingering death. Because this phaseout of the subsidies, I believe you yourself admitted, would merely be a liquidation without undue financial loss excepting for expectations of profits or a reasonable earning, because this is merely going to stop loss propositions. Your decreasing level of the subsidies, as outlined in your statement, would take it down from $4.2 million, to fiscal 1970, $1.1 million, and obviously cause a discontinuance of all of these lines. 

Mr. BOYD. No, sir. 

Senator MONRONEY. You don't think so? 

Mr. BOYD. No. We think they will be able to operate at their existing level, and as time goes on at an even greater level. As their traffic builds, if they are able to maintain the confidence of the financial community, they can get more equipment to serve a greater amount of traffic that they should have, and that is going to bring their unit costs down rather substantially because, you see, they are now operating with a work force which is capable of handling, except for the flight crews, a substantially increased operation. 

The costs today are loaded against them due to their having a minimum operation to date.

Senator MONRONEY. Wouldn't this require a drastic lowering of their rates, perhaps? You have these bigger helicopter now. I doubt very seriously if the volume of traffic has begun yet to catch up with the additional costs of amortization and such by these helicopter lines.