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  In arriving at its decision the Civil Aeronautics Board appears to have entirely disregarded the report and recommendations of its own Examiner in this proceeding and the record established therein. The decision made no reference whatsoever to the results of the investigation and audit of your Company abovementioned and the findings and conclusions of the Board's own investigation group were apparently utterly ignored. The Board in its opinion, also appears to have overlooked the fact as shown by the record, that by virtue of the connecting routes applied for, Colonial would reduce substantially its need for mail compensation which should alone result in a saving estimated in excess of $675,000 per year to the United States Government.
  The Postmaster General, Jesse M. Donaldson, filed on February 17, 1948, a petition to reopen the record in the Middle Atlantic Area Case for the purpose of enabling the Post Office Department to present certain studies and recommendations, only recently developed with respect to the routes and cities involved in this proceeding. In that petition the Postmaster General stated that "determination of the issues in this proceeding without a consideration of evidence now available but not incorporated as a part of the record may result in irreparable damage to certain existing air carriers who are applicants herein.....
   "Sound policy and due regard for possible improvident expense to the public in the form of mail pay require that the Board's decision herein be based on adequate and current information."
   Despite this plea made for the protection of the public interest and the public treasury, the Civil Aeronautics Board completely disregarded the Post Office Department's petition and, on February 19th, publicly issued its decision in the Middle Atlantic Area Case. On the following day, February 20th, the Civil Aeronautics Board issued an order denying the Postmaster General's petition to reopen the record for the purpose as stated, but permitted the Postmaster General to intervene, which was an idle gesture since the Case had to all intents and purposes been disposed of by the Board's final opinions and order issued the day before. 
   The Postmaster General, in his determination to do all possible to protect the public interest and the expenditures by his Department, filed with the Civil Aeronautics Board on March 9th a petition for a stay of the Board's order (Serial #1211) in the Middle Atlantic Area Case "until and to the extent that future events have removed the risk of the improvident and valueless expenditure of postal funds."
   For these and other reasons consistent with the petitions filed by the Postmaster General, your Management has taken the position that this decision of the Civil Aeronautics Board is manifestly unsound and fraught with legal error and you may be assured that your Company will avail itself of every legal remedy at its disposal to insure that this decision of the Board will not be a final determination of the issues in the case. I am confident that the results of these efforts will prove favorable to your Company's ultimate situation.
   For these and other reasons consistent with the petitions filed by the Postmaster General, your Management has taken the position that this decision of the Civil Aeronautics Boards is manifestly unsound and fraught with legal error and you may be assured that your Company will avail itself of every legal remedy at its disposal to insure that this decision of the Board will not be a final determination of the issues in this case. I am confident that the results of these efforts will prove favorable to your Company's ultimate situation.    
ROUTE EXPANSION: In accordance with Policy adopted by your Board of Directors, and looking to a sound economic development and expansion of our route structure, your Company has several other new route applications and proceedings pending before the Civil Aeronautics Board.
   The following are currently on file with the Board and several have reached the stage where oral argument has been heard and the cases submitted to the Board for final decision:
DOCKET #1989-BOSTON-CHICAGO VIA ALBANY, SCHENECTADY, SYRACUSE, ROCHESTER, BUFFALO, CLEVELAND AND DETROIT. Not yet scheduled for hearing.
DOCKET #1990-NEW YORK-CHICAGO VIA BINGHAMTON,BUFFALO, NIAGARA FALLS, ERIE, CLEVELAND AND DETRAIT. Not yet scheduled for hearing.
DOCKET #2055-NEW YORK-QUEBEC CITY, CANADA. Not yet scheduled for hearing.  
DOCKET # 730-BOSTON-NEW ORLEANS VIA NEW YORK CITY, ATLANTA AND OTHER INTERMEDIATE POINTS. Colonial's application in this case was denied by the Board's decision dated January 27, 1948 but Colonial and several other parties have filed petitions for reargument and reconsideration of the case upon which the Board has not et acted.
DOCKET #1650 et al- BETWEEN BOSTON, MASS. AND HAMILTON, BERMUDA. Hearing completed now awaiting Examiner's report.
DOCKET #3176- PHILADELPHIA, PA.-HAMILTON,BERMUDA. Not yet set for hearing.
DOCKET #3051 AND #3053-NEW YORK-MIAMI, FA. VIA VARIOUS INTERMEDIATE POINTS OR IN THE ALTERNATIVE A ROUTE BETWEEN THE CO-TERMINAL PINTS, WASHINGTON, D. C., PHILADELPHIA, PA., NEW YORK, N. Y. AND BOSTON, MASS. AND THE TERMINAL POINT MIAMI, FLA., VIA HAMILTON, BERMUDA AND NASSAU, BAHAMA.
Not yet set for hearing.
OUTLOOK: I am convinced that the problems now faced by the industry to assure safety and the dependability in air transportation are rapidly approaching solution. The reluctance in the minds of some of the traveling public to utilize air transportation is of a temporary nature and only awaits a safe and dependable operation on the part of the air transport industry. In this connection, I am pleased to report that your Company has added another year to its long record of safe operations, not having experienced an accident causing fatality or serious injury since 1930.
   The addition of the Bermuda route should result in more profitable operations by your Company. Operations over our domestic system during the winter months, due to extreme weather conditions in the modern areas to which they are confined, are unusually irregular. With the addition of the Bermuda routes, however, we can now offer a single carrier service from Canada through New York and Washington to Bermuda which will permit better utilization of equipment and we can take advantage of the fact that the weather and flight conditions between Bermuda and the U. S. Gateways are consistently good throughout the year. Our advance reservations to Bermuda have shown an increasing trend since the early developmental period beginning last August. On the basis of early 1948 traffic demand, I expect and predict marked improvement in the 1948 revenues of your Company over those experienced in 1947. With reasonable considerations, I am confident that your Company's situation will show substantial improvement in the volume of traffic and revenue as well as operating efficiency throughout the year 1948 and in the future.
CONCLUSION:  The management and Board of Directors take this occasion to express to the stockholders of the Company their appreciation of the confidence, cooperation and support which the stockholders have exhibited in the management's efforts to develop Colonial Airlines, Inc. into a well integrated, safe and dependable air transport organization.
   To assure the receipt of communications from your corporation or its representatives, we urge our stockholders to hold all of their stock in their own names and to keep our Transfer Agent, The Commercial National Bank and Trust Company of New York at 46 Wall Street, currently advised of the address to which communications should be forwarded. This is important to stockholders as well as to the management. 



Respectfully submitted, 
Sigmund James
    PRESIDENT


New York, N. Y.
March 25, 1948