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472 HELICOPTER AIR SERVICE PROGRAM

In view of the difficulties of measuring accurately ground transportation times, the time differentials shown between fixed-wing and VTOL operations must be considered as illustrative only. Nevertheless, they serve to demonstrate the time savings inherent in a vertical-lift operation at downtown, or close- in, sites. In the top US short-haul markets the time-savings would range from over an hour to well over tow hours on a round trip, depending upon the range and the location of the fixed-wing airports.

However, if our basic direct cost assumption of approximately 3.65 cents per available seat mile is correct, the differential in cost between fixed-wing and VTOL travel would be substantial for the next foreseeable generation of VTOL aircraft. Under the cost and load factor assumptions stated, the passenger revenue requirements per passenger mile would be in the area of 13-14 cents. Contrasted VTOL fares would produce a differential, approximately $20.00 per round trip over present fixed-wing travel in the major markets and the price paid for the time saved is substantial. While a segment of the present air market would pay the differential, the fact remains that the costs of an hour saved by VTOL are substantially above the $6.60 average hourly wage earnings of today's passengers. In certain markets, of course, the cost of the time saved is low and in the case of New York-Philadelphia, like other short-haul markets, surface competition becomes a critical factor.

The value of time saved by air passengers will increase over time, of course, so that some increased differential over the present value of time could be justified. Nevertheless, it appears that the intercity market requires a VTOL vehicle with lower seat-mile costs and, perhaps, higher speeds than that which might be available in the next few years. If a VTOL aircraft were available at direct seat-mile costs of 3.0 cents it would be competitive with fixed-wing travel in the major markets even if speeds were no higher than those shown in Table  V-4. The cost of VTOL time savings would compare reasonably well with the value of time spent in business travel.


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