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HELICOPTER AIR SERVICE PROGRAM           63

They didn't enter the field until the engines and the rotors had been worked out. They caused the manufacturers to give them some special arrangement on the rotor gearbox, and the blades and the engine itself, which is a little more favorable in New York than Los Angeles was able to get.
Not many people like to drive up that Bay Shore, and all the way over to Berkeley, in a taxicab at $13.50. So if you can get a helicopter over there in about seven minutes for $8.50, you can charge them 70 cents a mile. If Los Angeles tried to charge $7.50 to Anaheim, they would price themselves right out of the market, even with the briefcase traffic.
The weather has been favorable. There is only about a 2-percent weather interference with completion of the San Francisco-Oakland schedules.
You have to look at each one of them. I think it is fair to say that the San Francisco-Oakland one is probably still going to report about $150,000, or maybe $100,000 deficit. Mr. Boyd said $100,000 as of November 30, on about $1.5 million in revenues. So, it is not something that an insurance company portfolio analyst would invest in. It is more the venture-capital man who sees the arteriosclerosis developing in these large metropolitan areas, sees the value of the franchise, sees the potential that these men have been able partially to achieve.
Senator HART. It isn't that they are engaged in advertising-trailing banners or selling meals. It is just these circumstances that you say make the San Francisco operation what it is.
Mr. HALABY. Yes, sir. There may be some variation in the overhead-salaries of the vice-presidents, the usual part of an overhead of an air carrier that can be worked on. There are probably some advantageous arrangements that one has with the manufacturer that another doesn't. Cumulatively, they begin to add up. But the real "gut" problem is that the rotor and the gearbox and flight-control system, and the engine, operate under the most severe conditions and have had relatively little total experience compared with other kinds of air carrier equipment. And they go on very short-stage lengths into densely populated areas where the safety factor is extremely critical, and for all of these reasons it is a hard row to fly for these carriers, and yet they offer this tremendous potential.
Senator LAUSCHE. Thank you very much, Mr. Halaby.
The next witness is Mr. William O. Hall, Assistant Administrator for Administration, Agency for International Development.

STATEMENT OF WILLIAM O. HALL, ASSISTANT ADMINISTRATOR FOR ADMINISTRATION, AGENCY FOR INTERNATIONAL DEVELOPMENT; ACCOMPANIED BY FRANK LOY, CONSULTANT

Senator LAUSCHE. Mr. Hall, you are the Assistant Administrator for Administration, Agency for International Development; is that correct?
Mr. HALL. Yes, Sir.
Senator LAUSCHE. Your statement will be placed in the record. Now you may read it, or understanding it is in the record, you may way to discuss the highlights of what you had to say.
You may choose your own course. We do have four more witnesses yet this afternoon, and we will have to proceed rather rapidly.