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R. L. CUMMINGS Jr. NEW YORK AIRWAYS-1962 343

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through. Fig. 2 compares the operating results of a Boeing V-107 with those of a Vertol 44B. A utilisation of five hours per day and a 60 per cent load factor has been assumed for each aircraft. The Direct Costs referred to include all flight operation expenses, direct maintenance and aircraft depreciation. 

In the view of our company, the Boeing V-107 represents much more than just another pedestrian step in helicopter progress. For the first time, with this machine, at reasonably attainable load factors, it will be possible to earn substantial revenues over and above direct costs. Therefore, it follows that indirect expenses and other elements affecting the need for governmental financial support can be, at least partially, offset, even with New York Airways' modest initial fleet of no more than five aircraft. With a fleet of seven, we should be able to break even (not including return and taxes, or profit) and a fleet of ten would show a profit. 

As contrasted with this, the budgetary characteristics of our present single engine equipment are such that we have not usually been able to provide schedules in addition to our minimum basic structure, even when the demand was known to exist, without incurring a requirement for increased subsidy. In other words, the smaller and slower piston-powered equipment types thus far employed by New York Airways have been unable to earn sufficient revenues (even when their capacity was fully utilised) to cover the "added cost" of their operation on the company's routes. As a result, except in rare instances, we have not been able to match our service capacity to the market demand. Now, however, the introduction of the Boeing V-107 will remove this roadblock. For, as already indicated, with this equipment the effect of increasing service volume, whether through increased utilisation of existing aircraft or by the introduction of additional aircraft, will be to reduce, rather than increase, our subsidy requirement.

In fact, to go even further, the prospects are most encouraging for complete elimination of our subsidy need through the growth of our fleet within the next several years. Needless to say, it is not feasible to forecast precisely how or when this will take place. While our confidence that it will occur is, if you like, subject to discount, the significant fact is that now it can, whereas formerly it could not.

With the equipment delivered and in operation on our routes, the generation of traffic becomes the main challenge. Because of increased speed, reliability and capacity, each of the Boeing V-107's will, at a given utilisation, produce nearly four times the number of seat miles produced by our present equipment. In this situation, we are planning a very much enlarged advertising and promotional campaign, beyond anything that has been required in our previous history. Our promotion will, of course, include a continued careful analysis of our fare structure— which may or may not lead to tariff modifications. Our enthusiasm for bringing helicopter transportation within the range of anyone desiring it, must be balanced against the uncompromising need to eliminate subsidy at the earliest possible moment. 

In this connection, it is of special significance that the Boeing V-107 will shortly be certificated for instrument operations. In effect, this means that for the first time the full potential of the helicopter can be realised. Reliability and utility will be tremendously improved. To prepare for this development, the importance of which cannot easily be over-emphasised, New York Airways has, over the past several years (beginning even before the actual inception of its scheduled services), concentrated considerable time and energy on the appraisal of theoretically possible navigational aids and appropriate instrumentation. It is our present thought that the most effective helicopter navigational system now commercially obtainable is that produced by The Decca Navigator Company in London. Therefore, a wholly-owned subsidiary of our company has been established to operate (for experimental and evaluation purposes) a complete chain of Decca Ground Stations in the New York area. The standard Boeing V-107 instrument panel (Fig. 3) has been modified to accommodate dual Decca flight logs working in conjunction with a specially adapted Lear automatic flight control system. Equipped in this manner, the New York Airways helicopters are, we believe, the first fully instrumented rotary-winged aircraft.

The urgency which must be attached to the attainment of instrument operations can best be demonstrated by pointing out that in the month of February 1962, New York Airways' performance factor, entirely because of weather, was 58 per cent. In the calendar year 1961, our performance factor was 79 per cent. 

In the short-haul helicopter service, the destructive effects of schedule irregularity are greatly magnified by the fact that the margin of time advantage over competitive means of transport is narrower than in any other form of transport. A degree of schedule irregularity which may be acceptable in longer range air operations would severely handicap development of the public confidence upon which the continued sound growth of the company depends.

In the early days, when New York Airways became the first helicopter carrier to conduct regularly scheduled passenger service, many persons wondered whether our route pattern might not be too compact and abbreviated to generate a substantial and growing volume of business. The record demonstrates that this worry was unfounded. The fact is that, in the intervening period, New York Airways has become, notwithstanding unavoidable equipment limitations, an established part of the transport system serving New York and, through New York, the entire United States. The demand has consistently far exceeded our ability to offer service.

In 1961, the company carried 150,000 passengers, most of whom (close to 90 per cent) were using the services as a connecting link for long or medium length air trips. Several established organisations now forecast that we have only begun to scratch the surface of the market thus represented. 

There are many instances today where passengers using modern high speed aircraft for travel between the centres of two cities, such as New York and Washington, may take longer than was required twenty-five years ago. Because of airport locations,