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HELICOPTER AIR SERVICE PROGRAM 409

Helicopter operations are unique so that it is impossible to judge their experience on the basis of that of other air carriers/ Theoretically, there is inherent in the simplicity of helicopter operations the capability of reducing the relationship between ground handling expenses and direct aircraft operating expense. We believe that the limited scale of operation so far has inhibited the carriers from demonstrating, on an industry basis, the possibilities inherent in reduced unit indirect expenses. 

Nevertheless, the only basis of comparison with other domestic air carriers is that provided by the local service and the trunkline carriers. This comparison is shown below for the period in which the helicopter carriers have been conducting passenger operations. It will be seen that the ratio between indirect and direct expenses has been lower for the helicopter carriers. 

                 Table III-17

COMPARISON OF INDIRECT/DIRECT OPERATING EXPENSE RATIO, DOMESTIC TRUNKS, LOCAL SERVICE AND HELICOPTER INDUSTRIES 
[[4 column table]]
Year | Domestic Trunk | Local Service | Helicopter
|---|---|---|---|
1953 | 0.93 | 1.06 | 0.60
1954 | 0.92 | 1.11 | 0.75
1955 | 0.94 | 1.13 | 0.87
1956 | 0.97 | 1.14 | 0.98
1957 | 0.90 | 1.06 | 0.90
1958 | 0.95 | 1.10 | 0.85 
1959 | 0.97 | 1.08 | 0.81
1960 | 1.00 | 1.11 | 0.79
1961 | 1.00 | 1.10 | 0.92
1962 | 1.01 | 1.09 | 1.03
[[/4 column table]]
Source: Handbook of Airline Statistics; Form 41, CAB.

This foregoing analysis of unit operating expenses, expressed in either seat-mile or available-ton-mile units shows that a considerable breakthrough was achieved in the area of capacity costs with the introduction of new turbine equipment that was larger and faster than its predecessors.

While the measures of costs per available seat mile and costs per available ton mile provide an indication of the influence of aircraft seat-mile productivity on unit costs, an equally critical measure of unit costs, insofar as the economics of an airline are concerned, is that of costs per passenger mile or per revenue ton mile. In other words, a reduction in unit capacity costs will not automatically result in lowered unit traffic costs unless the increased capacity is sold. It is necessary to consider costs in terms of the traffic units which account for the revenues an airline, i.e., passenger miles and revenue ton miles.

An analysis of trends of costs in terms of revenue units shows that the benefits of capacity-cost reductions have been brought down into the revenue producing side of the helicopter operations. In the three quarters of 1963, when the influence of new equipment was being felt in the operations of LAA and NYA, expenses per passenger mile were substantially below those of a year previous. This experience is the result, primarily of three basic factors:

1. the availability of new larger aircraft which are more productive and which can operate at lower unit costs;

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