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192   HELICOPTER AIR SERVICE PROGRAM
 
the development of larger, more efficient vertical lift aircraft with lower seat-mile operating costs. In developing lower costs, improvements of maintenance cost levels is particularly important since maintenance sots account for approximately half of the total direct costs. 

Scheduled helicopter operations have made a significant contribution to lower maintenance costs by providing the intensive experience essential for safe extension of the time between overhauls of major components. The certificated helicopter carriers have operated far more hours for each particular type of helicopter than this equipment has accrued in any other type of service-civil or military. This was true with the Sikrorsky S-55; S-58; Vertol V-44; and today, the Boeing V-107. 

The extension of the overhaul period requires intensive operational experience and a daily utilization of the helicopter itself against published flight schedules. The ultimate time limits on important components cannot be determined by operating a larger number of helicopters a small number of hours. Because the certificated helicopter carriers provide this intensive utilization in their schedules service their operations have been responsible for the extension of overhaul times and operating component life limits which underlie the reduction in maintenance costs.  

The importance of schedules helicopter service in reducing maintenance costs is illustrated by New York Airways' experience with the Boeing V-107. As a result of its operational experience, time between overhauls for the rotor blades has been increased from 1,000 hours to 2,500 hours; the rotor controls from 500 hours to 2,000 hours; and the forward transmissions from 150 hours to 1,000 hours. Comparable achievements were realized in other components. Each of these extensions resulted in reduced maintenance costs. Moreover, by the time the U.S. military acquired their first operational V-107-type helicopter, it was able to base its overhaul time on the experience accumulated by New York Airways. For example, the U.S. Marine CH46 helicopter (military version of the New York Airways' V-107) was placed in service with a rotor blade overhaul requirement at 2,500 hours. New York Airways had to sample some 36 rotor blades beginning at 500-hour intervals over a period of some 32 months before achieving the 2,500-hour level. New York Airways was required by the FAA to test to destruction some samples and test design improvements during the course of this particular maintenance sampling program. This resulted in not only lower costs for the Defense Department, but more efficient utilization of the V-107 helicopter in its military missions. 

Phaseout helicopter subsides required under the Board's plan are fully justified in the national interest and should continue to be borne by the Federal Government. 

While we recognize that governmental expenditures in any amount must be justified in terms of their contribution to the national interest, we believe that the additional subsidy amounts required under the Civil Aeronautics Board program to maintain certified helicopter service at New York, Chicago, and Los Angeles are not substantial in relation to the benefits to be secured. 

The total dollar amount of additional subsidy required for the final 41/2 years of subsidized operation by three certified helicopter carriers is $11.4 million. The annual amount averages about $2 1/2 million per year or 3 percent of the $82 million requested for all airline subsidies for the next fiscal year. The average annual subsidy per carrier is less that the cost of paving 1 mile of road under the Federal highway program. 

We would urge that this subsidy is more than justified in terms of the service which we will provide in the interim period. The 3 carriers will carry 8 1/2 million passengers and 40 million pounds of mail. The subsidy cost will be $1.34 per passenger, which compares with $6.33 per passenger now being paid to local service carriers. 

The most important thing, however, is not how many passengers or how much mail we will carry, but the contribution which the continuation of certificated services at New York, Chicago, and Los Angeles will make to the solution of the short-haul transport problem. 

As a result of many long years of hard work, we have come a long way-particularly since 1962 with the advent of twin-turbine helicopters-in developing passenger acceptance and reducing our costs. 

In the next few years, the very kind of developmental contributions which we have made to the new twin-turbine helicopters can be made to a new generation of vertical lift equipment which we believe holds the answer not only to elimination of long-surface times between city centers and airports, but to the development of short-haul air transportation between major metropolitan centers.