Viewing page 456 of 507

This transcription has been completed. Contact us with corrections.

              HELICOPTER AIR SERVICE PROGRAM           447

costs of LAA in the 2nd Quarter 1963averaged 39.6 cents per passenger mile. While LAA has a longer aircraft hop than the other carriers and a quarter's costs may not be representative, the sharp reduction of costs experienced with the new turbine equipment cannot be overlooked in reconciling current experience with the potential costs shown in Table III-39.


Breakeven Requirements

Passenger revenue yields now average slightly under 28 cents for the three subsidized carriers. If the carriers are to operate without subsidy they must achieve lower passenger mile costs by increasing both their aircraft utilization and load factors. Table III-39 shows that self-sufficient operations are impossible either with increased load factors and today's utilization, 1100 revenue hours a year, or with today's load factor, 42 per cent and increased utilization.

Carriers derive some revenue from the carriage of property so that it is not necessary to breakeven or passenger revenue alone. In Table III-40 passenger revenue yield requirements per passenger mile have been computed after credit has been given to nonpassenger transportation revenues. Requirements are shown for three levels of utilization, two indirect/direct expense rations, and an average stage length of 15 miles. Passenger mile yield requirements are shown for a breakeven operation and one having an operating ratio of 90 per cent to show the need for return on investment.

The utilization assumptions show a range between 1100, present experience, and a maximum of 2000 hours a year, or 3:00 and 5:26 respectively, in terms of average daily utilization. While these utilization assumptions appear low in comparison with local service and trunk carrier experience it must be noted that extremely short-haul operations place a severe limitation on the number of airborne hours which can be operated by an aircraft in a day. In a short-hop operation, the ratio between non-productive ground time and revenue airborne time is high. The possibilities of achieving an average of higher than 5-1/2 hours a day do not appear great for the industry as a whole. A range from 1400 hours to 2000 hours a year probably defines the area of probability for the near future. Utilization shown refers to airborne block-to-block time and not to rotor time.


III-56