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HELICOPTER AIR SERVICE PROGRAM          297

Senator MONRONEY. I am not fussing at you for not carrying the mail. I am fussing because the rate is liable to become so obsolete that nobody will carry the mail. Yet this is what caused the origination of the helicopter lines, to move the mail faster from downtown to the airports.

Mr. BAGAN. I agree. Anything that you can do, or the staff, on moving our petition, would be greatly appreciated.

Senator MONRONEY. You may continue.

Mr. BAGAN. Thank you. As a nonsubsidized airline, we kind of have to hustle for every dollar.

Senator MONRONEY. In other words, you are not subsidized at all except on the diminishment of the rate by TWA by 50 cents. TWA directly subsidizes the cost to the passenger by $3, by reducing the rate, and you subsidize him by 50 cents; do you not?

Mr. BAGAN. Yes. I don't like to use that term that TWA subsidizes for $3. TWA wouldn't give me this joint fare unless they thought it was beneficial to them.

Senator MONRONEY. In other words, it is beneficial to sell a fare from Oakland via San Francisco to Chicago or New York at the regular rate that they would sell the San Francisco to those areas.

Mr. BAGAN. That is correct.

Senator MONRONEY. So the $3 extra that they would charge for flying over there is given to you to carry the passenger from Oakland to San Francisco.

Mr. BAGAN. Yes, sir.

This joint fare is an old, old thing both in the railroad, in the trucks, and also in the airlines.

Most of the local airlines for years had these joint fares. There has been a lot of talk about the joint fare with the helicopters, but it is nothing new and it isn't a form of subsidy. It is based on, I assure you, when you negotiate with them, based on the fact that they mutually benefit from the fare.

We started out in 1961, in June, we pulled the trigger of the gun and set the airline in motion with two S-62s. We had around 350 employees. Today we have around 350 employees. We have recently, on August 16 of last year, bought a large maintenance facility in Oakland. We did this for two purposes, one, to supplement our income to help carry the helicopter until it does mature more, until it reaches more of its break-even point; two——

Senator MONRONEY. You didn't tell us how you are going to supplement your income. By doing Navy work?

Mr. BAGAN. We do line maintenance for many airlines. We do overhauls, everything. For instance, 60 days ago we completed an overhaul for Slick. Last week we completed an overhaul for Alaska. 

In the next 60 days we have two major overhauls for Slick Airlines. 

We also do Aaxico Airlines, a logistic airline, all of their maintenance, and maintenance of their DC-6's.

Also TIA's Constellations.

Senator MONRONEY. What is TIA?

Mr. BAGAN. Transinternational Airlines, a large supplemental. We do Riddle Airline jets on the West Coast. And we have quite a large facility. This has helped. I estimate here in my prepared statement that this should give is from $5,000 to $25,000 a month income.

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