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ISLAND AIR FERRIES, INC.

MacArthur Airport

Bohemia, N.Y.

REPORT OF THE PRESIDENT

To the Stockholders:

Submitted herewith are the company's Profit and Loss Statement for the year 1947 and the Balance Sheet as of December 31, 1947, as certified by Bacas, Gates and Potter, Certified Public Accountants.

1947 was our second year, and saw survival of the organization through the employment of every economy, and exploitation of every possible source of revenue. The Civil Aeronautics Board (almost two years from the date of our application for our Route Franchise) hear oral argument on our case in July; this was the first step prior to CAB ruling, but at the end of 1947, we were still awaiting decision. Increasingly stringent restrictions imposed by the Civil Aeronautics Authorities on non-scheduled flying prevented the use of our aircraft for revenue purposes during this waiting period, but revenue was received from the following services:

1. Repair and installations in transient aircraft.
2. Sale of aviation gasoline and associated petroleum products.
3. Sale of used (drained) aircraft oil for reclamation.
4. Commission on sales from vending machines at airport.
5. Bailing and sale of waste paper at airport. 
6. Delivery of aircraft parts by air to other airlines. 
7. Occasional charter flights in company's survey plane. 

No available ethical source of revenue to the company was neglected.

In July, Mr. Hawley, president, went on leave without pay; Messrs. Hammond (secretary) and Smith (chairman) assumed the same status in August. All of these men devoted their own time subsequently to the affairs of the company, Mr. Smith remaining on full time without remuneration. The company's operation of the petroleum concession at MacArthur Airport made a direct operating net profit during the last quarter of 1947.