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In order to increase our passenger loads on ordinarily light traffic days and increase out equipment utilization, we are presently offering a 20% discount to round-trip passengers between all points on our domestic system who depart on Tuesday or Wednesday and return any day except Friday and Sunday. The results of this promotional plan have been gratifying. One of the substantial elements in the cost to the passenger of airline transportation is the 15% Federal tax on travel tickets. This tax was imposed on air and other forms of transportation during World War II to restrict unnecessary travel. The purpose of the enactment of this law has long since been served, however the tax is still a burden to the airline passenger and a barrier to increased volume to air travel. If this tax were repealed, your management is confident that, using the same basic fare structure, more passenger traffic can be generated. The enclosure submitted will show you how you can be of assistance in the campaign to have this tax repealed. SAFEY RECORD We are particularly pleased to report that your Company has completed another year with out experiencing an accident causing fatality or serious injury to passenger or crew member. April 19, 1949, will mark the beginning of the TWENTIETH year of this enviable and unsurpassed record of safe operations and your Company is once again qualified to receive the yearly award of National Safety Council. We will continue to exert every effort to maintain this record. OUTLOOK Due to seasonally extreme weather conditions, operating revenues in the months of January and February of each year have been consistently disappointing. However, during these months in 1949 Colonial transported more passengers than in any comparable months in its history. Domestic passengers carried in January and February 1949 as compared with the same months in 1947 and 1948 are given below: Passengers Carried 1947 1948 1949 January 7646 6834 10078 February 6808 7626 10829 This pick-up in traffic is indeed encouraging when it is realized that it was generated in the face of winter weather conditions resulting in 111 flight cancellations in the month of January and 31 cancellations in the month of February of this year. Our Bermuda traffic for these months has been seasonally low and has not come up to our expectation is that Bermuda is now being served by four airlines-Trans Canada Airlines started operations last May. Ocean travel has also been augmented by the recent return of the Queen of Bermuda to regular service. Every effort is being exerted by your management towards maintaining our competitive position in this market and the advance bookings for the Easter holidays are holding up very well. Your management feels that the year 1949 can prove to be a profitable year for your Company providing the cost levels of labor, gasoline, parts, supplies and taxes can be held within reasonable limits and the Civil Aeronautics Board establishes adequate mail rates for your Company. We also hope that the Board will, at an early data, permit some logical adjustment and extension of our route pattern that will considerably increase our revenue and operating efficiency resulting in substantial savings in our operations costs. 6
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