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Ton miles carried showed increases in all categories in 1953:

                       1953       1952       % Increase 
Passenger           8,544,000  6,820,000        25
Freight & Express     346,000    267,000        34
Mail                  155,000    135,000        15

The year 1952 had shown increases in ton miles over 1951:

Passenger-------------- 12%
Freight and Express --- 34%
Mail ------------------ 24%

International Route (Bermuda)

Bermuda traffic totaled 51,893 passengers compared to 37,376 in 1952, an increase of 39%. Bermuda traffic was helped considerably by the introduction of New-Type Constellation Service. This service was operated on a daily round-trip basis between April 1, 1953 and November 30, 1953 under a lease agreement with Eastern Air Lines. The Constellation provided the fastest service to Bermuda an our advertising "Less Than 3 Hours to Bermuda" proved very effective. We have negotiated for the use of a New-Type Constellation for the 1954 season.

STATUS OF AIR MAIL PAY

Domestic Route

Colonial is currently operating under a permanent mail rate which became effective April 1, 1952. The formula provides for a sliding scale under which, with certain limitations on miles operated and using target load factors for passenger traffic, the mail pay for 1953 would have amounted to $952,000. As far back as last January, it became evident to Colonial that airline traffic for 1953 would be considerably higher than in 1952. We purchased an additional DC-4 and we leased an L-749 Constellation for use on the Bermuda route which released DC-4 equipment to handle this additional business and to provide adequate service to the various communities.

Due to the fact that we were able to achieve high load factors on this expanded business, our mail pay amounted to only $596,000, thus reducing our dependency on mail pay subsidy by $356,000 in the year 1953.

International Route(Bermuda)

A permanent mail pay rate for this route, effective July 17, 1951, was fixed by the Civil Aeronautics Board, which produced $59,894 mail pay for the year 1953. In addition, we received $13,639 mail pay from foreign governments. 

ROUTE EXTENSION

Colonial's application for a new route from New York to Chicago was consolidated into the New York-Chicago Case by the Civil Aeronautics Board. Hearings were completed on the applications for service in the New York-Chicago area on December 15, 1953.

Your Company believes that it made a good showing before the Examiner of the Civil Aeronautics Board, since the proof indicated that, if granted the route, Colonial would be able to operate profitably without air mail subsidy. we anticipate that the Examiner will announce his preliminary decision in April or May and hope that favorable consideration will be given to Colonial's application. We cannot predict with any certainty what the decision of the Civil Aeronautics Board may be in this matter.