Viewing page 154 of 507

This transcription has been completed. Contact us with corrections.

146         HELICOPTER AIR SERVICE PROGRAM

SUBSIDY JUSTIFICATION

During the period of 1954 to 1964, LAA has been the recipient of $12,683,390 in subsidy. At the start of this period, subsidy represented 81.7 percent of total revenues, and commercial revenues 18.3 percent. By 1964, of total revenues, subsidy represented 46.9 percent and commercial revenues 53.1 percent. The subsidy has been justified generally on the following grounds:

1. LAA has evolved and tested virtually all sophisticated criteria methods and standards available to the world in connection with the operation and maintenance of transport helicopters.
2. LAA has given developmental meaning to four generations for transport helicopters, the S-51, S-55, S-62, and the S-61.
3. LAA has been at the forefront of the state of the art, and has many "firsts" to its credit. For example, it was the first——
   (a) To develop the art and technique of helicopter night flying, and receive a type certificate therefor.
   (b) To develop instrument flight techniques for helicopters (1950), updated to 1964.
   (c) To achieve scheduled operating dependability comparable with that of fixed-wing aircraft.
   (d) To train key military personnel in rotary-wing flight techniques.
   (c) To develop and operate an independent system of heliports based on community cost sharing without expenditure of Federal aid to airport funds.
   (f) To introduce turbine-powered equipment into its routes.
   (g) To evolve and refine the operating and regulatory criteria for large twin-turbine helicopters in scheduled service.
   (h) To receive an equipment type certificate for instrument flight operations.
   (i) To train United States and foreign government personnel in twin-turbine helicopter flight techniques.
4. LAA has provided the military forces with valuable data, both directly and va manufacturing and ordinary industry channels. For example:
   (a) It was reliably estimated that the Air Force double its utility of the S-51 machines in the Korean conflict, thus permitting the performance of 70 machines to equal that of 140, for a savings of approximately $16 million.
   (b) The S-55 helicopter developed into the S-58, which is still receiving considerable military use. Direct savings to the military from the S-58 commercial operations have been documented before the CAB.
   (c) Procurement and maintenance savings of $110 million via the LAA S-61 program (testimony of Paul Holt, of Sikorsky Aircraft, dated October 28, 1962). (See appendix C for further discussion of topic.)
5. As a citizen, the carrier has paid taxes in substantial amounts. For example, of the subsidy amount received between 1954 and 1964, Federal taxes in the amount of $2,293,508 have been returned to the Government as a result of direct taxation, user taxed, or collections as agent. An additional $749,257 in State and local taxes have been paid during the period.
6. LAA has transported persons and goods in great amounts over a transportation system tailored to the needs of the commerce, postal service, and national defense.
7. LAA has created and presently provides a national resource of skilled people in terms of its own employees, plus many now engaged by other enterprises, who derived their experience from our company.
8. LAA has provided valuable training services to other segments of the helicopter industry and the Government. For example:
   (a) Special pilot training was performed for the military during the Korean war. The U.S. Army stationed officer observers in an OJT training program in all aspects of helicopter maintenance and flight techniques.
   (b) The company has trained FAA pilots in rotary-wing techniques in S-51, S-55, and S-61 equipment.
   (c) Recent turbine equipment training programs have been completed for the FAA, the Government of Australia, the Government of Pakistan and Pakistan International Airlines. Contractual discussions have been held with Greenlandair, Okanagan Helicopters (Canada), and Ansett (Australia) for training.
   (d) The company has been selected to perform flight services in the evaluation of mapping radar instruments for the FAA.