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ISLAND AIR FERRIES, INC.
MacArthur Airport
Bohemia, N.Y.

REPORT OF THE PRESIDENT

To the Stockholders:

The company's Profit and Loss Statement for the calendar year 1948 and the Balance Sheet as of December 31, 1948 as certified by Bacas, Gates and Potter, Certified Public Accountants, are submitted herewith.

In 1948 the company, after two and one-half years of waiting for the decision, was enfranchised by the Civil Aeronautics Board to carry persons and property over the route for which application was made in September, 1945. During this period, the venture capital situation deteriorated and it became apparent that, without the right to carry the mails over our route, neither equity capital or debt-financing was available to place the company in full operation.

Application for mail-carriage privileges on the route was made in September, 1948 and a portion of the route was operated from July to October. Under a permit from The Port of New York Authority, our aircraft was operated at New York International Airport (Idlewild) on local-sightseeing flights. The company continued, throughout the year, to operate the petroleum products concession at MacArthur Airport.

The company completed repayment of the $75,000 RFC loan made in 1946 and, had it not been necessary to support legal and economic proceedings in Washington in connection with the route franchise, a profit would have been shown.