Business: They Need Subsidies to Fly

COMMERCIAL HELICOPTER

TO U.S. military men, the helicopter is fast becoming as useful and ubiquitous as the jeep. In Washington last week, the Defense Department made plans for a heliport beside the Pentagon to permit aerial taxi service between bases in the area; overall, some 6,000 military helicopters do every job from air-sea rescue to artillery spotting. But so far, civilians have gained few of the advantages of helicopters. To date, only 300 commercial helicopters operate around the U.S., even though the potential market is enormous. Predicted CAAdministrator Frederick B. Lee: "In ten years there will be 286 daily helicopter movements between New York and Washington alone." Eventually, said Lee, the U.S. helicopter passenger market may total 133 million passengers annually, almost four times the number now carried by all airlines.

The lag in commercial use of helicopters is due largely to the lack of a clear policy on the part of the U.S. Government and the airlines. Both the Post Office Department and the Civil Aeronautics Board are anxious to encourage helicopters, and both have been experimenting for years. But the program is sporadic and small-scale. Now the Government must decide whether to push ahead rapidly or let helicopters limp along without help.

Any big program is likely to be expensive, at least in the early stages. Some 50 prospective helicopter lines have applications pending before CAB. Only three—Los Angeles Airways, Chicago's Helicopter Air Service, Inc. and New York Airways—have been certificated for scheduled passenger and mail service, and they already cost the U.S. more than $2,600,000 annually in mail pay and direct subsidy. Not one makes money. New York Airways, for example, runs 37 daily flights (8,750 passengers in 1954) between Newark, La Guardia and Idlewild Airports. Because of the high expenses ($3.56 per plane mile), it costs the line $14 per passenger per trip, but all it can charge is $9.50. Without a $1,453,000 Government subsidy, the line would have gone $1,190,000 in the red for the fiscal year ended last September.

The story is the same in Los Angeles and Chicago. Furthermore, the Post Office Department itself is starting to balk at the price of helicopter mail. Though helicopters cut delivery time from Los Angeles to ten nearby communities by 15 hours or more, the payments are so out of proportion to the saving that the Post Office would like to shift to trucks.

One big stumbling block to cheaper service is both the quantity and quality of the helicopters available for commercial use. The Armed Forces have reserved more than 90% of all production, and are boosting their requirements every month. As a result, few of the six leading companies in the field (Piasecki, Bell, Kaman, Killer, Sikorsky, Doman) have given much time to either commercial design or production, are currently grossing $500 million annually without catering to the civilian market. Of the eleven types of helicopters certificated for civilian use, all are modified, single-engined military craft with high costs, low payload, speed and range.