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286     HELICOPTER AIR SERVICE PROGRAM

SFO Helicopter has installed an interline reservation teletype circuit to connect with all scheduled airline reservatiosn offices in the country.

In addition to the features just mentioned, we have entered into joint fare agreements with most of the major airlines serving the Bay Area to provide a single fare from our heliports to most destinations.  Joint fare agreements save the passenger from one-third to two-thirds of his helicopter fare.  For example, a passenger can fly SFO Helicopter at a small charge of $2 from the Metropolitan Oakland International Airport when connecting to most eastern and southern cities.

NONSUBSIDIZED STATUS

After our traffic grew to the point where we were outcarrying two of the then three certificated helicopter airlines, we filed a motion requesting expeditious hearing on our certificate application with the CAB (Sept. 10, 1962).  Without burdening this record, suffice it to say that our application had included the possibility of subsidy eligibility but the case was, in fact, set down on a "nonsubsidy" basis.  While we clearly would have preferred to litigate the question of subsidy eligibility, the advantages of certificated status were such that we had no alternative but to proceed with our case on a basis which excluded subsidy eligibility.

OUTSIDE ACTIVITIES OF SFO HELICOPTER

Since we have not had the benefit of subsidy, this makes us particularly cost and revenue conscious.  In August of last year we acquired a maintenance base located at the Metropolitan Oakland International Airport.  In so doing we were able not only to move our headquarters from leased Pan American space at the San Francisco International Airport over to our own space, thus reducing overhead, but also to improve our maintenance ability for our own aircraft which also reduced costs significantly.  On the revenue side, however, the maintenance business is now producing an average profit of $5,000 to $25,000 per month which contributes to our overall cash position.

As a second item, we have been working closely with the port of Oakland and Bell Aerosystems in proposing a program for the Oakland area utilizing air-cushion vehicles.  This proposal was presented by the port of Oakland to the Housing and Home Finance Agency and a demonstration grant was recently approved which should allow us to get into operation with two air-cushion vehicles this coming August.  This program will not only provide us with additional capacity in and out of the Metropolitan Oakland International Airport but will again help to spread ground and indirect costs which in turn reduces our break-even load factor.  Not only do we expect to develop useful data for HHFA in connection with urban transportation, but we expect to demonstrate to our own satisfaction the feasibility of air-cushion vehicle service in the bay area with a possible subsequent purchase of such vehicles for our own account.

PROPOSED FUTURE SERVICES

As to the more distant future, we have hopes of expanding within a 100-mile radius thus providing good short-haul city-center-to-city-center service to such places as San Jose, Sacramento, and Travis Air Force Base.  For stage lengths of the longer distance, however, the present generation of equipment currently appears to be too expensive on a seat-mile basis.  I say currently appears to be too expensive because I am not at all certain that a cost breakthrough is out of the question.  And this brings me to my company's underlying philosophy with respect to a sound national helicopter policy.

THE CERTIFICATED HELICOPTER PROGRAM SHOULD BE EXPANDED

It is my opinion that the "experimental" period for scheduled helicopter service is over.  Helicopter service has proved itself as a major and valuable service.  This is not to say that experimentation will not be carried on in such areas as instrument operations, but the fact is that helicopter service is here to stay.  Nor should this service be limited to the four cities which currently receive it.  In this time of urban congestion, such additional cities as Boston, Atlanta, Miami, Dallas/Fort Worth, Detroit, Seattle, and Washington, D.C., may all very well support scheduled helicopter service.

It has become apparent that the Congress is in an "either/or" mood.  Either there will be subsidy moneys made available for helicopter operations in other cities as well as the current three of New York, Chicago, and Los Angeles, or