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148 HELICOPTER AIR SERVICE PROGRAM yet largely incomplete. Vast sums of money can be wasted unless sound premises can be established, supported by adequate funds, and reasonable leadtime. In this connection, LAA takes the position that the CAB proposal is realistic, because it is based upon the Board's many years of appraisal of the transportation complex in an overall sense. CONCLUSION If the administration's proposal for the elimination of subsidy support becomes effective at the end of this year, it would be unrealistic to expect continuance of the scheduled transport services of Los Angeles Airways. The reasons are numerous. A look at the financial picture over the past years would indicate that LAA has operated under the lowest unit rates of any of the three subsidized carriers. Consequently, there has been no accumulation of "fat" which could form a basis for reduction in costs, and all available cash flow has been used to underwrite more service to the public. Analysis of increases in revenue would indicate that no appreciable or dramatic sources are available. LAA does not provide a premium category of service. Primarily it provides a local airline service which is dictated by the requirements of over 7 million people today, a population which is projected to double by 1980. The criteria which dictate the use of direct-lift in lieu of fixed-wing aircraft are essentially produced by urban growth. The Los Angeles megalopolis is a product of natural boundaries and climatic factors, all resulting in a major complex of industrial cities arranged in such a manner as to render it impossible to provide efficient transportation by means other than the helicopter. LAA has spawned most of the heavy pioneering in the rotary-wing field, over the years, yet it has never received what it considered an adequate level of support to truly carry on the work for which it has assumed the responsibility and is qualified to perform. Stated differently, the funding programs, which have been assiduously prepared and submitted to the CAB, have, on successive levels, always been revised downward and made available on such a short-term basis that there has been no wherewithal to plan in the fashion which has been possible for the fixed-wing elements during the same period. No facts are available to me upon which I would be prepared to assume the responsibility for public safety, and fiscal and corporate integrity, in the event the subsidy support as submitted were withdrawn or revised downward. APPENDIX A FACT SHEET——LOS ANGELES AIRWAYS, INC., MARCH 5, 1965 1. LAA was conceived in the early 1940's, primarily as a metropolitan feed system. 2. The company was certified by the Civil Aeronautics Board in 1947 for the carriage of property and mail by helicopter and this became the world's first helicopter airline. 3.Three generations of equipment have been proven in service, the S-51 (mail and cargo), S-55,introduced in 1952, and first approved for passenger service in 1954, and the twin-turbine S-61 (1962). The single-turbine S-62 was operated during 1960 and 1961 for familiarization purposes. 4. Reliance on Federal subsidy support continues to decline. In fiscal year 1962, subsidy represented 70.77 percent of total revenues. In mid-1963, the first full year of turbine operations, the ratio was 59.79 percent, and at the close of 1964 it had decreased to 46.9 percent. 5. Route structure has not been expanded since adoption of new aircraft. Application is before the Civil Aeronautics Board to expand into Ventura, Santa Barbara, and San Diego areas. 6. Under leasing arrangements, many new high-density stations will be added. Presently processing Whittier (in service 1964). Downey, and West Valley. Projected also are Arcadia and Pasadena. 7 Prospects for a new generation of helicopters are good. These will be faster, quieter, and have many new features not now available. Should also have lower operating cost. 8. Los Angeles Airways, on Mac 5, 1965, received official FAA approval to conduct its operations under Instrument Flight Rules (IRF).
