# QIVIL AERONAUTIOS BOARD I CHAIRMAN OSWALO RYAN -ACTING CHAIRMAN JOSH LEE — MEMBER HAROLD A. JONES- MEMBER I': RUSSELL B. ADAMS-MEMBER BRARY UNIVERSIT TY OF CALIFORNIA COST STANDARDS - DOMESTIC SCHEDULED AIR CARRIERES/r _ REPORT BY A F. H. OROZIER ,g' SPECIAL ADVISOR TO THE BOARD If; i? f WASHINGTON, DC. JULY l950/ 1 ,1, -5, \ INTRODICTMCW . . o . o . DESCRIPTION AND APPRAISAL 0F STANDARIB REIATION OF C(BT WNTS T0 CLASSES OF TRAFFIC AND RATES APPLICATION OF EQUATIOIB TO EXAMPLES Underlying Principle . . . . Tam - e e o o 0 o 0 Comparison of Carriers! Reported Expenses with Calculated standard Values . . Applicability of Equatiom . . Ton-«Eile Comarlsons . . . . Relation of Ton—agile Factors to Expense Choice of Method. . . . . . General Comparisons . . . . . Capital Charges . . . . Relation Between Rates of Revenue Height . o o n e o o o 0 Passengers . . . . . . . Lail I O I O O O Comercial Selffiufficiency . General Consideratiors . . . . Merger of Eastern and Northeast . Merger of Mid-Continent and Continental Merger of Monarch and Challenger Elmdmtion of Five Small Stations by Western/Inland Elimination of Five Small Statiom by Pioneer TECHNICAL SECTION Relation oi‘IEquations to Separately Reported Expense Groups Development of Equations . . 0 Analysis of Ton-mile Menses . Tables 21: and 25 . . . Commercial Traffic and ’l’rarsportation Revenues Capital Charges 0 o o o o e Gemral Headquarters and Local. station Expenses o o 0 O 0 o no... 0 t e TEXT oeceogoe .....(D o 0 I000... OF ROUTE H’ITERN REVIB I016 00... Q to... OF EVENIE .00... can... 0...... 00-00. 0.0.0.. Operating Expense, Traffic, and Station Data Reported by the Carriers for the Twelve-Month Period Ended September 30, 19h9 RELATION OF TOTAL CALCUIATED OPERATD'IG EXPEBEE TO TOTAL REPORTED OPERATING EXPEDSEfl- . . . . Domestic Trunks RELATION OF TOTAL CAICUIATEIJ'OPERATII‘G EXPEISE TO TOTAL REPORTED OPERATING EHEIBE-X- . .' . . Domestic Feeders CHARTS O O O 0 0...... 00000-0 000... 0000-0. .0... O 0 col... 0.0.0.. to... 0"... 0...... .0... 32:32 SEme HH TABLE OF Reference Exhibits ( iii ) 888 E; 13 17 18 19 CONTENTS TIE GENERAL RELATION BETWEEN OPERATED EXPEDBE AND TOW Domes 1c Trunks COMPONENT A 01“ GM WISE . . . Equation "1": Domestic Trtmks CHARTS o o o e o I O COMPONENT A 0F 6ch EXPENSE PLUI‘TED AS A STRAIGHT LINE 0 Equation "1": Domestic Trunks COMPONENT B 0F 6&1: EXPEI‘BE o . Equation "2": Domestic Trunks: Operating Expense):- CGIPOIEM‘ A OF A0 EXPEbSE . o 0 Equation "3": Domestic Trunks: Operating Equense-x- COMPOBEI‘T E CF AC EXPENSE . o a Equation "14": Domestic Trunks: Opaating Eamensex- COLIPOIENTS A AND B OF GEL-I EXPEI‘BE . Equations "1'l and "2": Domestic Reported. Operating Expense-x- COLXPOIENTA 01" A0 EXPRESE . . . Equation "3": Domestic Feeders: Operating Expense!- . O l O O 0 Related to Reported O I D O O C Related to Reported Related to Reported Fee ders. - O 0 Related to Reported FLIGHT REES .AS A FACTOR IN CCMPONENT A OF A0 EJTENSE . Equation “h": Donestic Feeders: Operating Expeneex- CGVTPOIEM‘ B 0F A0 EXPEIBE o n o Eqmtion ")4": Domestic Feeders: Operating Expenses!- COLIPOlEllT A OF C&I EXPEISE . . Equation “1': Domestic Trunks: G&I Immense Related to Reported O I O O I 0 Related to Reported Related to Reported CCMPOI‘EM‘ A 0F 0ch EXPENSE PLUTTED AS A STRAIGEI‘ LINE . Equation "1" : CfiI Expense Danestic Trunks : COMPONEM‘ B 0? 6&1 EXPEIBE . . Equation n2": Domestic Trunks: Col anaeme COMPONENT A 0F A0 EXPENSE . o . Equation "3“: Domestic Trunks: A0 Expensex- CCLIPOIEHT E OF A0 EXEI‘SE o o o Equation "h": Domestic Trunlm: A0 Expense)!» CWII’ONEM'S A AND E OF 0&1 EXEBBE o Equations "1" and "2": Domestic Feeders: Reported 0&1 Expense COMPOINENI‘ A OF A0 EXPEIBE . . . Equation "3": Domestic Feeders: A0 Expew Related to Reported O C I I O O I Related to Reported O l O I O O C Related to Reported O O O 0 I O 0 Related to Reported I O I 0 O 0 Related to Reported Related to Related to 8 10 17 18 19 A6 ’47 1:8 SO 52 Reference Ethibits Chart 5 Charts h, 21 Chart 22 Chart ll Charts 10, 12 Charts 1:, 11; Charts 5, 13 Chart 6 Chart 7 Charts 8, 22 Chart 9 Chart 10 iv 10.- 20 21 22 R ~2\o~\\>\ \t’ 11 CHARTS CmmIEIEBOFAOEml‘BEOOOOOoooeeoeeeo Equation “h": Domestic Feeders: Related to Reported A0 Expensee C(LPARISON 0F UMDJIBTED AND ADJIBTED TON-HILE RATES AS RODUCED BI EQUATION I'1" IN 6&1 ExmmE . . . . . . . . Domestic Trunks: Related to Reported Opeth Expense!- TOIL—ORIGIMTE‘D VALIES PRODIEED BI EQUATION “1;" IN AO EXPEISE* . . . Domestic Trunls: Related to Reported Operating Expense-x- TABIES COMPARATIVE SIMMARY 0F CAICUIATED OPEPATIME EXPEW 011 TOTAL OPERATING EXPEISE 3513 AND THO-GROUP EXPEXBE BASIS, AND THE DEVIATIONOFREPOR'IEDFRQICALCIRATEDTOTAIS . . o . . . . . Donestic Trunks: Ground and Indirect Expeme Aircraft Operating Expense!- Total Operating Expense-Ir COMPARATIVE SIMMARY 0F CALCUIATED OPERATIm EXPENSE ON TOTAL OPERATIm EXPEIBE mSIS AM) TWO-GROUP EXPEISE BASIS, AND THE DEVIATIONOFREPORTEDMGAICUIA'EEDTUI‘AIS . . o . o o . 0 Domestic Feeders: Ground and Indirect Expense «. Aircraft Operating Expense!- Total Operatixg Expense! TOlJ—HILE AMHSIS 0F HEM-REVENUE MARGIN OF DOMESTIC TRUNK ARCARRJIBS....o 000000-0000. TON-MILE ANALYSIS OF WIN OF MSTIC FEEDER Am mm 0 I O O C C . C O D O C C I I O O C 0 ANALYSIS OF WEE-REVIEW MARG'DJ 0F WHESTIC TRUNK AIR CARRIERS . . ANAIXSIS OF EXENSE-REVEN'UB MARGIN OF WTIC mm}: AIR GABRIEIB . PEMEMTAGE DISTRIBUTION OF REDIEED-FAIE AND OTHER ESSENCE?! TRAFFIC AlmmGIASSESOFTRAFFIC o .0000... e no 0 Domestic Trtmks and Feeders: 12 Heaths Ended September 30, 19149 TON-L'IIE RATES OF C(lfllERCIAL TRAISNRTATION REVENIE B! 01455 FOR THEDCIESTICAIRCARRlEflso. ...a....... Distribution of Ton-Mile Rates: Scheduled and Nonscheduled Reduced-Fare an! other Passenger Excess Baggage Express Freight :2 Months Ended September 30, 19h9 COMPARATIVE CALCUIATED OPERATIM} EXEDBE'I; 0F EASMN AND WTHEAST AS THO SINGLE DOMESTIC SYSTEMS A10 A3 A GOIBOLEATED SISTEM . o . COMPARATIVE CALCUIATED OHIRATIM} EXPENSE OF CONTINENTAL AND MII')-COI\I'.l'IIE‘.m1I AS TWO SINGIE DOMESTIC SYSTDES AND AS A COBBOLDATED SYSTWQoooeooooooooooeoooeo CGfiPARATIVE CALCULATED OPERATIM EXPENSE‘X- 0F CHALLENCER AND MONAROH AS TWO SINGIE DOMBTIC SYSTEMS AND AS A COI‘BOLIDATED SYSTEM . e . It? 53 59 20 22 26 28 29 32 TABLE OF CONTENTS Reference Eflfibite Chart 12 Schedule 1; Chart 5 Schedule 1;; Chart 8 Chart 1 Chart2 T2; 16 17 18 19 20 21 22 23 TABIES CAIL‘UIATED EFFECT ON THE OPERATIM} EXPENSI'B'K- 0F WESTERN/DRAM) max ELDIDIATION 0F 5 SMALL STATIOlB . . o o o o o o CAIBIILATED EFFECT ON TEE OPERATIM} EXPEI‘SB-K’ 0F PIOIEER FRQJ MNNOFSSMLLSTATIOI‘S. . e o o o o o o . CAISUIATION OF CGJHJIENTS A AND B OF GROUND AND INDIRECT EXPEIBE FOR DGIESTIC TRUNK AIR CARRIERS . . . . . . . Equations "1" and "2" Related to Total Re orted Operating Expenses (Residuals “1' and "2'I CALCULATION OF C(MPONEM‘S A AND B OF AIRCRAFT CREATING EXEIBEK- FOR DOESTIC TRUNK am CARRIERS . . e . o o c Equatiom “3" am '3; “Related to Total Re rted Operating Emensex- (Residuals “3" and ”it"? CALCULATION OF CCMPONENI‘S A ANDB OF GROUND AND INDIRECT EXEIBE FOR DCHESTIC FEEDER AIR GAMERS. . . . 0 Equations "1'I and “2" Related to Total Reported Operating Expense!- (Residmls "1" and "2!) CALCULATION OF CGlPOIENTS A AND E OF AIRCRAFT OPERATING EXPflNSEfl- FOR DmESTIC FEEDER AIR CARRIERS . . . . . . Equatiors "3" and "4" Related to Total Reported operating Manse/c (Residuals "3" and uh") CALCULATION OF COMPOEENTS A AND B OF GROUND AND INDIRECT EXPE 163 FOR Dams'rxc TRUNK Am CARRIERS . . . o . . Equations “1" and “2“ Related to Reported Ground and Indirect Ibcpense (Residuals I'l-Cu‘kl“ and “Z-le") CAUIII'ATION OF CQJPONEI‘JTS A AND E OF 1mm OPERATING EXPICIBE‘X' FCR DCMBSTE TRUNK Am 0mm 0 e o‘ o o o - Equations "3" and “1;" Related to Reported Aircraft Operating Expenses!- (Residuals "l-AO‘l and '240') CALCUL‘LV'ION OF GQiPOKEM'S A AND B OF GROUND AND IBDIRIMT EXPEIBE FCR DQESTIC MDER AIR GARREiRS . o o o o Equatiom "1" and "2" Related to Reported Ground and Indirect Expense (Residuals "l—G‘iI" and “2-0521") CALCULATION OF CQIPO.’ E‘TI‘S A AND B OF AIRCRAFT OPERATIM} EXRSIGE * FOR DQxICSTIC FEEDER Am CARRIERS . . . . o 0 Equations "3“ and "24“ Related to Reported Aircraft Operating Ebcpensex- (Residuals “l—AO“ and "240“) SUMMIT 0F GAHEIRATED OHZRATING EXPEIBES-x- B! GROUP AND COMPONENT AND THI. DEVIATION 0F REPORTED FRCXJ CALCUIALT “ID TOIALS o o e e o o e o o o 0 Domestic Trunks and Feeders: .Ground. and Indirect Mensa (Commute A and B) Aircraft Operating nee-K- (Compomnts A and B Total Operating Expense!- CAUJULATCD OER/LTD!) EmIBEfl» CGIPARED ON A TON-MILE BASIS WITH REPORTED OPERATING EXPISNSW . . . . . . . . . Domestic Tnmks and Feeders CONIPUAT EVE SEMINAR! 0F REPORTJD AND CALCULATED CREATING mism- 0N Tao-(mow EXEIBE BASIS o o EXPDementia Trunks and Feeders: Ground and Indirect Expense Aircraft Operating Expenses Total Operating Expense-x- 37 5h 55 56 57 58 63 Reference Exlfibits Charts 1:, 5, 6 Charts 7, 8 Chart9 cm 10, 1.1, 12 Charts 13, 1h, 15 Charts 16, 17 Clart 18 Charts 19, 20 Schedules l, 2, 3, h v/47/ 28 29 31 32 33 35 36 37 TABIES REPORTED OPERATING EXPEDSE-x- RELATED To CAICUIATED OERATIN} EXPEI‘SE‘K- IN PERCENTACE DISTRIBUTION BY ACCOUNT CLASSIFICATION . e . . 0 Domestic Trunks and Feeders: Grouni and Indirect Expense Aircraft Operating Expense):- Total Operating Ebcpense* UKCGMERCIAL TRAFFIC TON-MILES BI CLASS FOR THE DQIESTIC AIR CARRIERS . Distribution of Volume: Scheduled and Nonscheduled Reduced—Fare and other Passenger Excess Baggage Express Freight 12 Months Ended September 30, 1919 CQIMERCIAL TRANSPORTATION EVENIE‘: BI CIASS FOR THE DOMIETIC AIRCARRERS... ooeoooooooooo Distribution of Volume: Scheduled and Nonscheduled Reduced—Fare and other Passenger Excess Baggage Ewes Freight 12 Months Ended September 30, 19149 CAISIHATED FLIGHT mummm DEPRECIATION AM) REMAIS COIBOLIDATED WITH OTHER CALCULATED EDKPEBBE VALUES AND RECONCIIED WITH REPORTEDFIGURESOFTHECARRIERS. o o o o o o o c o o o FLIGHT mummm DEPRECIATION EXPENSE IN REIATION To TOTAL AIRCRAFT OPERATING EXPENSE REPORTED B: THE nemsnc Am CARRIERS . . . . Trams: 1939-1919 Feeders: 1925-1910 CAIGUIATION OF RETURN 0N INVBTMENI‘ AFTER TAXES . . . . . . . Domestic Trunks and Feeders IETINVESTMEMOFTHEDOMESTICABOARRIERS. . . . . . . . . As of December 31, 19149: Trude: and Feeders DISTRIBUTION OF REPORTED GROUND AND INDIRECT EXPENSE BETWEEN LOCAL STATION AND GENERAL WW EXEI‘SES o o 0 Domestic Trunks and Feeders: 12 Months Ended September 30, 19h? OERATIN} WES IN PERCENTAGE DISTRIBUTION B! ACCOUNT CLASSJI‘ICATIONAINDHCARRDIR. e u e o o e o o o o o 12 Months Ended September 30, 1919 OPERATING EXPENES IN TOTAL BY ACCOUNT CIASSD‘ICATION AND BY CARRIER 12 Months Ended September 30, 19h9 TRAFFIC VOLLIE BI CIASS AND AVERAGE PER STATION FOR THE mescmmmcmmSoooooooooovo 12 Months Ended Septembew 30, 19h9 TRAFFIC AND CHEATIM} DATA OF THE DOESTIC SCHEDULED Am CAREERS o 12 Months Ended September 30, 1910 NIHBER OF STATIOI‘S OERA'IED BY THE DOMESTIC SCfEDUIED AIR CARRIERS o 12 Months Ended September 30, 1919 67 69 7h 75 77 78 79 81 82 TABLE OF CONTENTS Reference Exhibits Schedule 5 Schedule 5 Chart 3 Chart 3 21.9.: SCHEDUIES ANAIXSIS CF EQUATION "1'I 0F CALCUIATED (3&1 EXPEIBE FOR DOMESTIC TR-mm Am GARLRERS I O O O O U I O O I O O O I 0 ANALYSIS OF EQUATION "2" OF CALCULATED 6&1 EXPEI‘ISE FOR DOMESTIC TRUTEARGMIRIERS............... ANALYSIS OF EQUATION "3" OF CALCULATED A0 EXPEISE‘N- FOR DOIESTIC TRUNK AIR CamR‘ERS O O O 0 O 0 I O O U 0 O 0 O 0 ANALYSIS OF EQUATION "’4“ OF CALCULMD A0 EXPENSE-e FOR DQJESTIC TRUNK Am CARRIERS O O . O C C O I O O O O O C 0 AVERAGE PERCENTATE RELATIONSHIP OF FLIGHT EQUIHEI‘IT DEHZI'JCLATION AND R'ENI‘AIS TO ARCRAFI' OPRATII‘X} WISE . o . . . o . SELECTED TRAFFIC AND Emma DATA comm ommoxs OF FIORIDAAIRNAYS INC. . . . . . . . . . April 1, 191$, through March 28,1919 Reference page Exhibits 61 Chart 21; Table 23 61 Table 23 62 Table 23 62 chart 22; Table 23 68 Tables 28, 29 81; Tables 3b,, 36, 37 INTRODUCTORY GWEN]! The pm'pose of this report is to present standards which have been developed to measure the inherent costliness of domestic scheduled air carrier operations, to explain and illustrate these standards, and to show their general appli- cation to the regulatory and route development functions of the Board. In view of the fact that the standards are a new development, it seems necessary to devote a large portion of the report to their explanation and demonstration. This involves presentation, in the broadest terns the subject permits, of the theory of the standard equations and their relation to expenses experienced by the carriers. Under- standing of the principle and the effect of the standards seems prerequisite to their acceptance and application. DESCRIPTION AND APPRAISAL 0F STANDARDS With few exceptions the _operating ex- penses of the scheduled domestic carriers conform to the values indicated by their inherent characteristics. Standards are based upon experience of the low-cost carriers. Urxieiligng Princgole The principle upon which the standard equa- tions are developed is that appropriately assigned traffic-unit costs (i.e., costs per ton-mile, per ton originated, and per ton lifted) should vary, under conditions of economical and efficient oper- ation, in inverse ratio to the volume of such units, with sufficient consistency to permit their cal- culation by standard equation. v No statistical correlation is required to demonstrate the general proposition that traffic-unit costs tend to vary DESCRIPTION AND APPRAISAL OF STANDARDS in inverse ratio to volume of traffic (Chart 3). It was, however, a major task to identify and calculate the several operating expense* values involved in the equations and to determine their rates of variance with pertinent traffic units. Terms The traffic and service pattern character- istics used in the standard equations are: traf- fic tons originated, average length of traffic haul, average interst7tion flight distance, and traffic tons lifted»; and, in addition, for the feeders, the number of stations. For both trunks and feeders, two equations are required in cal- culatiug Ground and Indirect Expense and two in calculating Aircraft Operating Expense. The feeder equations differ from the trunk equations in the respect have noted and in format. The terms and format of the equations are shown on the two following pages, Charts 1 and 2. Co arisen of Carriers' Reported Expenses with that:1 CEcfiIEted Sta-{13753 Values Evidence of the validity of the equations is the general and close conformity of the domestic air transport industry to the standard equation values shown on Charts 1 and 2. The carriers represented are the twenty-six domestic trunklines and feederlines which conducted. conventional-type scheduled operations for the full twelve months * Throughout the report the asterisk * used with "Operating Expense" or "Aircraft Operating Expense“ indicates the exclusion of flight equipment depreciation and rentals menses from the expense group referred to. 1/ Units of traffic based on the average number - of times it is necessary to lift a ton of traffic from, and inclusive of, its point of origin to point of destination. 3/ Discussed in Note at end of this section. (1) ended September 30, 191:9. The expenses, as report- ed to the Board by fourteen of these carriers, conform within a fraction of 1 percent to the figures calculated by the standard equations; three exceed 1 percent; four deviate approximately 2 percent; three show deviations of from 3 to 5 percent; and two, both small feeders, show devia- tions of approximately 22 percent. One of the latter is a plus-deviate, the other a minus—devi- ateog/ In developing the standards no major adjust- ment is made in either expense or traffic data as reported by am of the carriers except to elimi- nate flight equipment depreciation and rentals expenses. (See Tables 31; and 36.) The reason for the elimination of these capital charges is that they are so greatly influenced by considerations of financial managemnt as to obscure their rela- tion to the traffic and route pattern character- istics. Flight equipment depreciation and rentals are discussed later in the report. The standards are based upon low—cost figures rather than aver-gee. As will be noted tram the accohpanying graphs, such low-cost figures are the rule rather than the exception; and, as pre- viously indicated, the figures of fourteen car— riers conform almost precisely to the standards. The rigorousness of the standards is evidenced by the fact that the sum of plus-deviations, exclu- sive of one of the two "small feeders" referred to above, is 20.59 percent, whereas the sum of the minus deviations, excluding the other "small feeder,“ is only 8.1;? percent. Only two of the minus-deviates are under the standard by more than 1 percent. The few more substantial deviations of indi- vidual carriers shown on Charts 1 and 2 may be due to lack of uniformity in statistical reporting and accounting, minor inherent characteristics not fully accounted for by the equations, or by disparities in managerial policy. It seems ob- vious, however, that possible corrections to in- dividual carrier figures would have the effect of altering the position of such figures with respect to the equation values, rather than affecting the CHART I DOMESTIC TRUNKS TOTAL OPERATING EXPENSE: TOTAL OF ALL EQUATION VALUES RELATION OF TOTAL CALCULATED OPERATING EXPENSE TOTAL OPERATING EXPENSE * TO TOTAL REPORTED OPERATING EXPENSE* (I2 MONTHS ENDED SEPTEMBER 30, l949) NET DEVIATIONS 9o 2 CARRIERS RANKED IN ORDER OF PERCENTAGE MAGNITUDE I. U f CUMULATIVE 80 ’ * AVERAGE TOTAL OPERATING EXPENSE PERCENT DEVIATION , CARRIER REPORTED CALCULATED DEVIATION (PERCENT) 7o CONT $ 4.9I6,733 $ 4,9I6,689 0.00 0.000 TE NEA 4,942,364 4,943,248 —0.02 0.0I0 ‘XL NAL I0,972,036 I0,974,965 -0.03 00 I7 , CAP 23,275,304 23,288,236 -O.06 0.028 ‘ 60 DAL I3,708,928 . I3,727,883 -0.I4 0.050 I 8 -' UAL 73,477,737 73,34I,759 0. I9 0.073 “4‘ AAL 8I,077,366 8 I,233,200 —0. I 9 0.090 3' WA 8,907,8I0 8,885,I83 0.25 0.I I0 , g 50 00L 3,900,072 3,928,527 -0.72 0.I78 ; g 085 7,343,258 7,252,947 l.25 0.285 m TWA 57, I00,8I2 55,9 I5,604 2.I 2 0.452 I g 40 EAL 57,62 I,099 56,352,529 2.25 0.602 f 'j' MCA 6,358,827 6,598.3 I 5 -3.63 0.835 E Ng BNF I2.9 37,802 I2,432,095 4.07 I066 ~ v 30 \gp NWA 23,520,225 22,426,569 4.88 |.320 *SUMMARY OF E_(_)UATIONS D B ' 'o n n N fit / EQUATION I (GBII COMPONENT A) 20 Mc‘j’f [29.88 c -(0.0000I3238¢ )(TONS ORIGINATED)][T0N8—4,325][HAUL] cNCa' , gSEAs /. EQUATION "2" (Gal COMPONENT a) I T ‘ Io L /' [———$ “542287 “TONS ORIGINATED] , /- mm + 4,400 ’/ CI II EQUAT|ON 3 (A0 COMPONENT A) ‘ 0 [I0.97¢(T0N-MILES)] PLus [$I,403.5I (HAU..)] I. 0 IO 20 30 4o 50 60 70 80 90 EQUATION '4' (A0 COMPONENT 8) TONS LIFTED )2] / I CALCULATED OPERATING EXPENSE’M , (MILLIONS OF DOLLARS) [$6.85 (TONS ORIGINATED) (RATIO OF *EXCLUDING FLIGHT EQUIPMENT DEPRECIATION AND RENTALS TONS ORIGINATED SOURCE: TABLE I TOTAL OPERATING EXPEN$E* 3,000 2,500 A 2,000 (D a: < .3 .1 O D ‘5 I500 U) D Z < (I) D O I 5 I000 500 0 CHART 2 DOMESTIC FEEDERS TOTAL OPERATING EXPENSE: TOTAL OF ALL EQUATION VALUES RELATION OF TOTAL CALCULATED OPERATING EXPENSE TO TOTAL REPORTED ,OPERATING EXPENSE* (l2 MONTHS ENDED SEPTEMBER 30, |949) I—>17 NET DEVIATIONS CARRIERS RANKED IN ORDER OF PERCENTAGE MAGNITUDE Dim PU'U >-I-I 543 NA W‘é’ 3 P 8 F . L A 500 I,000 00 2,000 2,500 3,000 CALCULATED C. RATING EXPENSE“ (THOUSANDS OF DOLLARS) * EXCLUDING FLIGHT EQUIPMENT DEPRECIATION AND RENTALS CUMULATIVE * AVERAGE TOTAL OPERATING EXPENSE PERCENT DEVIAHON CARRIER REPORTED CALCULATED DEVIATION (PERCENT) FLA $ 883,08I s GGI,888 0.I8 0.I80 WIS I.089,044 I,088,548 0.23 0.205 PDA 2,IOI,O47 2,094,0I7 0.34 0.250 PAL 2,84 I ,889 2,855,84I -0.49 0.3 I0 SWA I,97I,I87 I.95I,930 0.99 0.448 CHA I,382,I48 I,377,II8 -I.09 0.553 MON I,393,485 I,370,I03 I.7I 0.7I9 WCA I, I32,282 I, I 58,744 —2. I 2 0.894 R08 987,8I8 987,205 2.I3 l.03l EMP 834,408 I,088,925 -2 L79 3. I07 TTA 2,I 29,757 I,739,825 22.43 4.884 I/ *SUMMARY OF EQUATIONS EQUATION "I“ (can COMPONENT A) [27070 (T0N-MILES)] EQUATION '2" (G 8| COMPONENT 8) $ 458,589 EQUATION "3' (A0 COMPONENT A) [26.40¢ (TONs LIFTED)(FLIGHT-27.5)] PLUS [$549.30 (FLIGHT-27.5)][STATIONS] EQUATION “4" (A0 COMPONENT B) [s 7.28 (TONS LIFTEDI] SOURCE: TABLE 2 fij¢~3~fij A rut? “-5—; : 3:... Tia’z'.‘ CHART 3 DOMESTIC TRUNKS TOTAL OPERATING EXPENSE THE GENERAL RELATION BETWEEN OPERATING EXPENSE*AND TON-MILES ( I2 MONTHS ENDED “SEPTEMBER 30, I949) TOTAL OPERATING EXPENSE* U / A THIS CHART SERVES NO OTHER PURPOSE THAN TO ILLUSTRATE L / ' 80 THE FACT THAT THERE IS AN OBVIOUS RELATIONSHIP BETWEEN . / THE VALUE OF TON-MILES TRANSPORTED AND THE COST OF . IA‘ THEIR TRANSPORTATION. THE SEVERAL INFLUENCES WHICH . L ARE REFLECTED IN THE TOTAL VALUES HERE PLOTTED ARE 70 ANALYZED ON SUCCEEDING CHARTS. / E T I / U) A W a: L A 4 60 _l _l O 0 LL 7 #M o 50 (I) Z 9 j 40 E 3135 30 -__..L ,_P ATT T T 80 —L//VE 0F AVERAGE RELATIONSH/P.' 4.3.67 CENTS PER TRAFFIC TON-MILE E N NE (FITTED BY LEAST SQUARES METHOD) 20 —~A—~~c W ATTTFT T __._,,, 22-2,, ~ T L,,, ~ T— C v.8 /|_ / 0° CS ' ON A / L T -' IO ' ‘ ‘ , ’T ,w,,,,,2,_,,LL,__L ~~— ~ -—— ' ' EQUATION: y = 2,994,903.20 + 0.4367477I2 x ' . AVERAGE DEVIATION: 8.76 °/o $2,994,903 { I T I I I ' I i I 0 IO 20 3O 40 50 60 7O 80 90 I00 IIO IZO I30 I40 l50 l60 I70 I80 |90 TRAFFIC TON-MILES (MILLIONS) SOURCE: TABLES 34 AND 36 *REPORTED TOTAL EXCLUDING FLIGHT EQUIPMENT DEPRECIATION AND RENTALS equation values, and it seems reasonable to con- clude that possible corrections in reported data might substantially reduce or in some cases elim- inate deviations. Attention is directed to the fact that in adhering to the "low-cost" carrier data covering a year of steady traffic powth and relative freedom from adverse cost influences, the result- ant line graphs may represent standards which are not uniformly or reasonably attainable under less favorable circumstances. However, it seems prob- able that, on the other hand, continued traffic growth and technological advances my further later the standards. It is not intended here to imply that any carrier, whose operating expense during the twelve months ended September 30, 19149, wa somewhat in excess or short of the sum calculated for it by the equations, was necessarily substand- ard or superstandard in managerial efficiency. The relations between the several trunkline equations and pertinent operating expense groups are shown on Charts h to 8, inclusive, and for the feeders on Charts 9 to 12. The development of these charts is further discussed in the ac- compam'ing Technical Section. It is believed, however, that the following brief cements will prove helpful to an understanding of their gen- eral significance. In the case of each chart, the line graph represents the values described by its accom- panying equation. The dot pattern through which it passes represents the specific, residual, car- rier values to which the equation is applicable. Tm "residual" values are , in each case, the re- mainders left from subtracting the values of the other three equations from the total reported operating expenses of the several carriers. It should be understood that this "residual” method of development was a matter of necessity rather than choice. It is not possible on the basis of available data to separately correlate minor reported suspense classifications with traf- fic characteristics. The smallest feasible sub— divisions available for this purpose are there- DESCRIPTION AND APPRAISAL OF STANDARDS fore the two large sum groups provided by the Uniform System of accounts, vim: Ground and Indirect Emense, and Aircraft Operating Expense. Even the figures reported by the carriers for these two groups cannot be wholly accepted at their face value because of the lack of uniformity among the carriers in assigning "burden" expenses between such groups. As noted from Table 1, column 18, the average deviation for the trmklines of the reported Ground and Indirect Expense values calculated by the pair of 6&1 equations is 2.21 percent; the range of deviation is 9.22 percent. Sindlarly, the average deviation meported Aircraft er- ating genes-5 column 22, is ho7h percen m a range 0 . 7 percent. The average deviation, however, of reported Total ORE-gatié% gum!- from the total equation use, co umn , s o 1.32 percent and the range is only 8.51 percent. These results are generally 5 ‘ with respect to the feeders also. (Table 2) In view of this showing, then, certain devia- tions of reported Ground and Indirect and Aircraft operating!- expenses from the equation values, as shown in Sections D and E of Table l, are more apparent than real. That is to say, the deviations are more a mtter of accounting than of fact. \ Obviously, the most valid comparison is between total reported values and total calculated values, although it seems significant that the separately reported G&I totals conpare more closely to equa- tion values than do the less manageable Aircraft Operating* expenses. It should also be borne in mind that the degree of the devia 3 shown on the component Charts )4 to 12 is e, ,gerated by the fact that the residual values apresented in the dot pattern include the net V nulative devia- tiom of total expense-u- from thv nun of all equa- tions, whereas the equation val s of the compon- ent graphs represent only a fr~ tion of the total calculated enemas-’1'. y Unless otherwise indicated, carriers are ranked in the tables in the ascending order of their volume of tons originated. (See Table 36.) Applic ability of Eqpations The equations are offered as the approximate expenses:- values which may be reasonably attained by a carrier, real or constructive (as in case of a proposed merger), in view of its inherent traffic and service pattern characteristics as specified above, under conditions of economical and efficient operation. They are offered for use in estimating the financial effect of mergers, route suspensions, and new route developmnt; for measuring the effect of commercial rate ex— perimentation; as approximate bench marks in studies of comparative efficiency; for develop- ment of subsidy and nail-rate standards; and, in short, for em project requiring estimtes of operating cost upon the bases of real or construc- tive traffic and service pattern characteristics. Principal evidence of the range of data to which the equations are applicable and their con- tinuing applicability is the data here presented for the twelve months ended Septenber 30, l9h9. This appears, however, to be an excellent base period. It is the earliest full twelve-month period for which sufficient feeder data are avail- able to afford a reasonably adequate base for cor- relation of traffic and expense. The safety rec- ord of the period was exceptional, particularly from the viewpoint of traffic impact, and it was free from major labor difficulties. The period, begiming as it does, at the close of the 19h8 peak traffic season, reflects a generally rising seasonal trend as well as a period of steady long- tern growth. Such circumstances seem particularly favorable to the realization of operating economies. Further, a sufi‘icient period of time has elapsed since the war's close to permit adjustments to postwar route and traffic expansion. In view of the general closeness of the cor- relations, the geat range in traffic magnitude and characteristics of the carriers covered, and the apparent lack of deviation bias with varia— tions in magnitude or other carrier characteristics, it is concluded that the equations can project with reasonable accuracy the operating expensex- of car- rier comMnations much larger than represented TABLE 1 (See can 1) CCHPAFA‘I‘IVE SW 0F CAMUIA‘I'ED OPERATING WISE-X- ON TOEAL OPERATE-3G EXPENSE BASIS AND Tim-GROUP EXPELEE BASIS, AND THE DEVIATIOEJ 0F REPORTED FRO}; CALCULATED TOTALS Domestic Trunks: Ground ard Indirect Expense —_._..._..__. Aircraft Operating Expenseu- Total Operating Ezqnensek (Based on data for 12 months ended September 30, 19119) OWN 0F RESIDUAL 6&1 EXPENSE AND RESIDIRL A0 EXELSE* W 1TH EQUATION VAL. (A) (B) (0) Ground and Indirect Eyense Aircraft operating Expensw Total operating Exoemeu- Deviation of residual Deviation of residual Deviation of reportEd from calculated ( ) from calculated from calculated carrier Residual (6823* calculated Imam Percent Residual A0 Calculated AME Percefi Re orted calculated Amount Percefi carrier (1) (2) (3) (7i) (5) (6) (7) (5) (9) 5165 (II) (12) ' (ES 7 00111 5 2,851,815 $ 2,851,771 3 11 0.00 :3 2,061,962 :5 2,061,918 3. 11 0.00 3 1,916,733 3 1,916,689 53 11 0.00 CONT 001. 2,375,833 2,101,288 —28,155 -1.18 1,195,781 1,521,239 -28,155 -1.87 3, 900,072 3,928,527 -28,155 -o.72 cor. HAL 5, 717,010 5,719,969 —2, 929 -0.05 5, 222,067 5, 221, 996 -2, 929 -0.06 10, 972, 036 10, 971, 965 -2, 929 -0.03 HAL 1121 2,912,182 2,913,366 -881 -o.o3 3 1,998,998 1,999,882 -881 —o.o1 1,912,361 1,913,218 -881 -0.02 1171 08.5 1,570,608 1,180,297 90,311 2.02 2,862,961 2,772,650 90,311 3.26 7,313,258 7,252,917 90, 311 1.25 686 1:01 3,825,065 1,061,553 -239,188 -5.89 2,291,271 2,533,762 —239,188 -9.15 6,358,827 6,598,315 -239,188 -3.63 101 W/ I 5, 392, 871 5 , 370, 217 22, 627 0.12 3, 537, 563 3, 511, 936 22, 627 0.61 - 8, 907, 810 8, 885, 183 22, 627 o. 25 W/I 1111. 7,751,871 7,770,826 -18,955 -0.21 5,938,102 5,957,057 48,955 -0.32 13,708,928 13,727,883 -18,955 -o.11 m1 BHF - 7,979,091 7,173,387 505,707 6.77 5,161,115 1.958.708 505,707 10.20 12,937,802 12,132,095 505,707 1.07 BNF m 11,902,121 13,808,768 1,093,656 7.92 9,711,157 8,617,801 1,093,656 12.69 23,520,225 22,126,569 1,093,656 1.88 1171 CAP ‘ 13, 181,513 13, 191, 175 -12, 932 -0.10 10, 080, 829 10, 093,761 -12, 932 —0.13 23,27 5, 301 23, 288, 236 —12, 932 —0.06 CAP NA 31,102,019 32,916,811 1,185,208 3.60 21,181,001 22,998,793 1,185,208 5.15 57,100,812 55,915,601 1,185,208 2.12 1781 EAL 32,617, 790 31,319,220 1, 268, 570 1.05 26,271, 879 25,003, 309 1, 268,570 5.07 57, 621,099 56, 352, 529 1, 268,570 2.25 EAL UAL 13,928,592 113,792,611: 135,978 0.31 29,685,123 29,519,115 135,978 0.16 73,177,737 73,311,759 135,978 0.19 UAL AAL 18,066, 927 18, 222, 761 -15 5, 831 —0, 32 32, 851, 605 33,010,139 -15 5, 831 -0.17 81,077,366 81, 23 3,200 -155, 831 -o.19 AAL Average deviation 2.19 3.32 1.32 C(IPARISON 0F REPORI‘ED 0&1 EXPENSE AND REPORTED A0 EXPEDB’EI- WITH EUATION VALUES (D) (E) ' (F) Ground and Indirect Expeme Aircraft Operating $071599 Total Operating meme-x- Deviation of repom enation of ropoffed Deviation of reported from calculated from calculated from calculated Reported calculated AmofiE Percent- Reported Calculated AmofiE PerceFrE Reported Calculated Imom Percefi ‘ (I5) (10) (17) (15) (I97 (20) (21) (22) (23), (210 (25) com 5 2,921,335 S 2,351,771 8 72,561 2.51 $3 1, 992,398 3 2,061,918 5.3 72,520 -3.51 53 11,916,733 33 1,916,689 $5 N4 0.00 COM 001. 2,262,299 2,101,288 411,989 ~5.91 1,637,773 1,521,239 113,531 7.15 3,900,072 3,928,527 -28,155 -o.72 001 1111, 5,752,878 5,719,969 2,909 0.05 5,219,158 5,221,996 ~5,838 -0.11 10,972,036 10,971,965 -2,929 -0.03 1111. mi 2,888,922 2,913,366 61,111 -1.85 2,053,112 1,999,582 53,560 2.68 1,912,361 1,913,2118 ~33’4 -0-02 NEA 015 1,172,391 1,180, 297 -7, 903 -o.18 2, 870, 861 2, 772,650 98, 211 3.51 7,313, 258 7,252, 917 90,311 1.25 02.9 LISA 3,913,321 1,061,553 --51,232 -3.72 2, . . ,506 2,533,762 438,256 -3.18 6,358,827 6,598,315 -239,’-:33 -3-63 HGA . /1 5,392,169 5,370, 217 22,222 0.11 3, 515,311 3, 511,936 105 0.01 8, 907, 810 8, 885,183 22, 627 0.25 w/I n11. 7,928,382 7,770,826 157,556 2.03 5,780,516 5,957,057 -176,511 -2.96 13,708,928 13,727,883 48,935 -0.11 nu. BI‘IF 7:151: 5119 7,173, 337 -318, 838 —1. 27 5, 783, 253 h, 958, 708 8211, 515 16- 63 12, 937, 802 12,132, 095 505, 707 1307 BM“ 1111 11,191,117 13,808,768 382,619 2.77 9,328,808 8,617,801 711,007 8.25 23,520,225 22,126,569 . 1,093,656 1.88 m CAP 13,116,118 13,191,175 221,973 1.68 9,858,856 10,093,761 ~231,905 -2.33 23,275,301 23,288,236 -12,932 -o.o6 up 1771 32,689,716 32,916,811 -227,095 —o.69 21,111,096 22,998,793 1,112,303 6.11 57,100,812 55,915,601 1,185,208 2.12 1711 EAL 30,767,208 31,319,220 -582,012 -1.86 26,853,891 2 ,003,309 1,850,582 7.10 57,621,099 56,352,529 1,268,570 2.25 EAL ULL 115,210,767 113,792,611 1,115,153 3.31 28,236,970 2 519,115 4,312,175 41,111 73,177,737 73,311,759 135,973 0.19 HAL AAL 15, 351,618 18,222,761 -871,113 -1.81 33,725,718 3 ,010,139 715,279 2.17 81,077,366 81,233,200 455,831 -o.19 ML Average deviation 2.21 1.71 1.32 * Operating Expense data here exclude flight equiment depreciation and rentals. Notes: 0011171111 2: Residual (6&1) = Total Operating Expenséreported, less notes (continued: Column 6: Residual (A0) = Total operating Notes (continued): Colman 11: sun of 00111111115 3 and 7. calculated A0 mensdt mama-reported, less calculated Columns 16, 20, and 2h: Identical witheolumzs 3, 7, and Column 3: Sum of Components A and B, based on Equations "1“ and GM Expense. 11, respectively. "2" as follows: Column 7: Sum of Components 1. and 13, based on Equations "3" and "1" as follows: General Note: Columns 1 and 8 reflect net cumulative deviations and arey Eguation "l": of course, identical with columns 12 and 25. This has the Eguation "2": effect of exaggerating the percentage deviations shown in [29.8% - (0.000013238¢)(Tons originatedfl [Tons - 1,325] [Haul] columns 5 and 9 since in each case these are based on only [10.97¢ (Ton—miss)] plus [31,103.51 (11.01)] a portion of the total expense. It should be noted that despite Eguation "2": this fact, they are, in most cases, stler than the deviations 5h 8 Eguation "h": shorm in the corresponding columns of Sections D and E. 3‘1 2 2 7 . __ . [fans +1.17% ] [Tms ”Rinate‘l] [$6.85 (Tons originated) ((Ratio of ww— )2] Source: 1.81., 11. 15, 31. Tons originated (6) mu: 2 (See Chart 2) CQIPAMTIVB 8mm! 0? CALCULATE OPERATIIG EXPENSES. 0] TOTAL OPERATING ms: BASIS AND TWO-GROUP muss BASIS, AID m DEVIATIOI 01" mm PRC! CALCULATE TOTALS Dmstie Feeders: Ground and Indireet Expense Aircraft Operating Expense. Total Operating lxpenee‘ (Based at data for 12 maths ended September 30, 19!;9) CGPARISG 0F RESIDUAL (MI IXPHSB LID RESIDUAL L0 manna WITH EQUATIOI VALUE (A) (B) (0) Ground and Indirest Expense Aircraft Operating Expense. Total Operatiniixpenae‘ Usdafien of residual Deviation of residual Ueviation of reported from oaleulated ) fro- oaleulated from ealeulated Carrier Residual (0&1). Caleulated m5? Percent Reeidual (A0 Calculated W Pen-em Be orted Calculated m Percent Carrier (2) (3) (10 (5) (5) (7) (5) (9} ER” (I!) (157 (m) us 8 578.650 9 576.152 8 2.1198 0.145 0 $2.892 0510.591: 3 2.198 0.19 ”.0893“; 81.056546 3 2.195 0.23 '18 m muss 650.201; -232. 519 65.76 1811.202 me.721 -232. 519 65.80 8311.106 1.066.925 -232.519 41.79 am on 686,262 701.250 411.968 -2.13 660,898 675,866 -1L,968 -2.21 1.562.1148 1.377.116 ~1h,968 -1.09 cm ‘01 711.027 657.6345 23.332 3.140 705.8140 682.1158 23.382 345 1.3911455 1.570.103 23.382 1-71 '0 R08 633. 636 613. 025 20, 611 3.36 37k. 791 394, 180 - 20, 611 5. 82 987, 816 967. 205 20, 611 2.1} 1103 HA 1,11u.082 750.950 590.132 51.95 1. 78.807 988.675 390.132 39.116 2.129.791 1.39.625 390.152 22-15 m ISA 670.822 695.501; -2h.hfl2 6.52 56.958 1161.th #2114182 -5.31 1.152.262 1.1563”: -21th2 4.12 m PM 931.657 921.627 7.030 0-76 1.176.1420 1.169.390 7.030 0.60 2.101.014? 2.0911411? 7.030 0-31; PM P‘L 1.218.309 10%3s261 “1319? '1 010 1e 5789 628 1a $2) 580 '1339? '0088 2.8111, 859 2.355.341 ‘15s952 “00159 P“ "A 1.053.019 1.063.782 19.237 1.81 907.385 838.1148 19.237 2.17 1.971.167 1.951.930 19.237 0-99 8‘ Average deviation 10.142 11.62 5.35 CUPAHISOH 01’ MORE 661 “I All) REPORTED L0 EXPENSE. WITH EQUATION VALUES (D) (B) (F) Ground and Indireet hpensa Aircraft OperathE Efigenae‘ Total (keratin; Expuae‘ Uefiatlon of reported 0 a on o repo e Teflatlon of reported from ealeulated {rm calculated - fro- calculated Carrier Reported Calculated mun? Percent Re rted Calculated mun; Percent Re orted Calculated mun? Percent Carrier 115) (16) ‘67)” “(1‘57" "fi'fi" W “(21')“ 7-227“ 5235 "123"" 7557‘ ‘ T567- !“ 0 580.292 . 576.152 ‘ lull-I0 0-72 3 505.752 0 510.391; 8 1.6142 -0.52 31.08530”; H.086.” . 2,198 0-23 '13 ll? 1:15.14” 650.201: 431.787 65% 1115.989 1116.721 432 43-13 8311.1:06 1.066.925 -232. 519 -21.79 II? 63A 692. 656 701. 250 -8. 9914 4.23 669.1192 675. 866 4.371; 43.911 1.362. 1'43 1. 377. 116 45.968 -1-09 cm ION 728.823 687.6345 111.183 5-99 6615657 682.1158 47.801 4-61 1,395.1:85 1.370.103 23.382 1-71 l0! nae 521mm 613.025 $8.945 41.11; 1463.336 394,180 109.156 30.132 987,816 961,205 20,611 2.15 nee m 1.019.257 750.950 298.307 39.72 1.080.500 958.675 91.325 9.29 2.129. 757 1.739.625 390.132 22°15 1““ m 671.161 695.301; £15m} '3J4'I 1461.101 MLMO 639 '0-07 1.132.362 1.156.71314 '21th2 -2-12 WA PM 917.267 9211.627 4.360 43-30 1.183.730 1.169.390 114.390 1-23 2.101.010 2.09;.017 7.050 0.31; PM PM- 1.h79. 317 1. 363. 261 216. 556 17-11; 1. 362. 072 1. 592. 580 ~230. 508 diets? 2. €941. 389 2. 855. 8111 -13.99 -0.h9 PAI- N 1.097.172 1.063.782 53.390 3-114 873.995 853.1118 411.53 4-59 1.971.167 1.951.930 19.237 0-99 SI Average deviation 12.23 6.15 5.33 II Operating Expense data here exclude {light equipmt Notes (oontinued): Colm 7: Su- 01 Components A and B, based on General Note: Colums h m a "nut m “1.1.31" d-pnoietion Ind I'm-1h Equation- ‘3' and 'h" as follow“ Wand are, of eourss, identical with l C 1 2 R aid 1 (“1) ti Exp M21 eolums 12 and 25. This has the street of en;- oteu o “In a e “A = Total Opera as an.“ . rati the reenta e deviations show: in eelulne "P914505. 1'“ 0‘101‘1‘17“! ‘0 339.100" [2644” (Tons lifted) (Flight 27.5)] gent! x9l‘simaepin eaeh‘ease these are based on eel: Cola-I 3: Sun of Coupon-ate A and 3, band on P1“! [85119.50 (FM-51“ - 27-5) (Stations) . portion of the cm 0m.“ It would be noted Equations '1' and '2' as follows: Equation "’4'! [.7026 (TO! lifted) that despite this taet, they are, in nest eases. ' ' , - c luau 11 Sun of eolums 5 and 7. smaller than the deviations shown in the eon-es- M [27 07‘ (Ton dud] cg“... 1;. 20, and a“ Identieal with column pending ooh-no 01‘ Section: D and I. Eta—'9 '2" “56.589 P" “"1" 3, 7. and 11. respectively. Cola-I 6! Residual (A0) I Total Operating lxpenae‘ Source: Tables 16, 17, 51;. reported, lees ealeulated 0&1 Expense. (7) ..«3— «A _._.o ' CHART 4 DOMESTIC TRUNKS GROUND AND INDIRECT EXPENSE: COMPONENT A EQUATION "I" RESIDUAL "I" ** COMPONENT A OF Gal EXPENSE RELATED TO REPORTED OPERATING EXPENSE* DATA FOR I2 MONTHS ENDED SEPTEMBER 30, I949 AVERAGE MILES OF TRAFFIC HAUL IOO A I I I I I I I e ** TOTAL OPERATING EXPENSE * I w 90 ———— LESS: CALCULATED AIRCRAFT OPERATING EXPENSE ’/’//,;/,//’__ AND COMPONENT B OF GROUND AND INDmECT EXPENSE 80 — (SEE SUCCEEDING CHARTS) [A E L A L 70 (D (I: 3 60 .J O D T THE VALUES PLOTTED ON THIS CHART ARE, AS FOR EACH CHART u_ g PRESENTED IN THIS SERIES, THE NET VALUES REMAINING AFTER 0 50 THE DEDUCTION OF ALL OTHER CALCULATED OPERATING EXPENSE —‘ 8 g VALUES. THE DEVIATIONS FROM THE PLOTTED CURVE, ON THIS 2 P AND OTHER CHARTS IN THIS SERIES, ARE CUMULATIVE. THE 5 4 EFFECT SHOWN UPON EACH CHART REPRESENTS, THEREFORE, A _ 8 o COMPARISON OF THE LIMITED CALCULATED VALUE OF THE EQUATION I . WITH GROSS DEVIATIONS OF TOTAL REPORTED EXPENSE FROM TOTAL '— CALCULATED EXPENSE. 30 —— DB A W CM 20 Ngacl CALCULATED CURVE VALUE = 29. 88¢ ~(0.0000/3238¢)(r0/vs) rows—4,325 c AASA' 00 L ' IE / CALCULArEU GROSS VALUE . [new -(0.0000/3233¢)(70A/3/][ro/vs- 4,325/[HAUL] IO .z’ //’/N 0 OJ 20 40 so so IOO I20 I40 I60 220 240 260 280 300 320 340 360 380 4,325 TONS TRAFFIC TONS ORIGINATED (THOUSANDS) SOURCE: TABLE '4 *EXCLUDING FLIGHT EQUIPMENT DEPRECIATION AND RENTALS by the largest carriers for which basic experience data are available. It is believed that the equations should re- tain substantial validity for a future year and probably longer. The carriers themselves set the pars represented by the equations. Whether future carrier experience will maintain or improve upon the pars represented by the equations, only future tests can fully determine. Such tests, on the basis of future data, should involve little tin or effort; while developmnt of the format of the equations represented a difficult original prob- lem, their application to future data should re- quire only simple statistical routine. hen their adjustment, if such adjustment should appear war- ranted, would represent a relatively minor under- taking. Ton-Mile Conparisom Comparisons of total reported operating ex- pense* for the twelve months ended September 30, 19149, and the sum of the equation values, both reduced to cents per ton—mile, are presented in the opposite columm. The data are arranged in descending order of calculated cents per ton-mile, a listing which affords an interesting comparison with ton-mile rank shown in the first column. Comparison of the above table with other data previously discussed will further emphasize two rather obvious points: that expense per ton-mile tends to vary in inverse ratio to the volume of ton-miles, and that this tendency is only indi- rectly caused by the influence of ton-miles upon costs. The above ton-mile rates are produced, of course, by dividing the reported and calculated expense figures, respectively, by traffic ton- miles. The basic differences in individual car- rier ton-mile costs have their source, however, in varying volume of tonnage, length of traffic haul, ratio, of tom lifted to tons originated, and other characteristics as given effect and weight by the standard equations. (See Table 23 ' and Schedules 1-h, inclusive.) Carrier and ton-mile rank Reported?! Calculated?! WIS 25 2h6.57¢ 2h6.00¢ ROB 2h 170.93 167.37 MON 22 163.26 160.52 TM 19 195.86 159.98 cm 20 150.71 152.37 M 23 116.66 110.17 mm ~ 21 128.110 131.17 an 18 121.52 121.11 m. 16 95.37 95.81: an 17 87.88 87.02 a/ The percent deviations are identical with " those shown on Charts 1 and 2. For deviations in cents per ton-mile, see Table 23. As the common denominator of expense and revenue the ton-mile has specific importance. It also has specific importance as a factor in certain of the standard equations. is used in sumary expense presentations in this report, however, the term "per ton-ndle" has no necessary implications other than that certain calculated total values are, for purposes of comparison, divided by traffic ton-miles. Perhaps influenced by the fact that the ton- mile is a significant basis for assessing and ap- praising air transportation revenues, it has on occasion been accorded unwarranted value as a cost distribution factor. It is only, however, under conditions of such high traffic density that serv- ice volume must necessarily vary approximately with traffic volume that the ton-mile is a sig- nificant basis for cost allocation to traffic classes. Under such conditions, increase in traf- fic volume necessitates increase in schedules, in the average available capacity of schedules, or both. Here weight of traffic is an important DESCRIPTION AND APPRAISAL OF STANDARDS .I O. .0 .' 0' O. .0 I. O. O. .0 '0 l. 0‘ O. O. .0 .0 O. O. Carrier and ton-mile rank Reportedfi/ Calculatedfi/ NEA 1h 79.71¢ 79.7215 COI- 15 77073 78030 RCA 12 60.83 63.12 m, 9 62.113 62.16 6&5 11 60.68 59.93 17/1 10 58.75 58.60 nu. 7 58.h7 58.55 am 8 58.00 55.73 cm 6 51;.10 5h.13 1m 5 51.97 119.55 1m. 1; 50.60 119.118 110. 3 119.09 I48.07 m. 2 115.16 115.07 ALL 1 1.2.72 112.80 factor in determining capacity requirements and therefore has reasombleness as a cost allocation factm'e Under thin trafi'ic conditions, typically ex- perienced by the very small carriers, it is ous- tomary to operate some minim number of daily schedules to serve frequency rather than volume needs. In addition, as indicated by the accom- panying tables and charts 3. minimum cost burden of between $150,000 and $75,000 annually is necessary to maintain a scheduled carrier in business, irrespective of its traffic volume. Minimum capacity burden costs, common to all car- riers, are not influenced by volume of traffic. If divided by ton-miles or other traffic units, minimum capacity burden costs reflect unit ex- pense in inverse ratio to the number of units represented, but those minimum capacity burden costs are not caused by such units. CHART 5 DOMESTIC TRUNKS GROUND AND INDIRECT EXPENSE: COMPONENT A EQUATION "I“ COMPONENT A OF Gal EXPENSE (CHART 4) PLOTTED AS A STRAIGHT LINE RESIDUAL “I" ** ADJUSTED TON-MILES (SEE CHART 4) 80 I I I I I I I **TOTAL OPERATING EXPENSE* LESS: CALCULATED AIRCRAFT OPERATING EXPENSE 70 AND COMPONENT 8 OF GROUND AND INDIRECT EXPENSE THE PURPOSE or THIs CHART Is To ILLUSTRATE THE EQUATION (SEE PRECEDING CHART) USED IN CALCULATING THE CURVE SHOWN ON CHART 4o 60 m d 2 l S 50 ’— 0 Lu F'- “3’ C c 4O 00— MN 3 N0 AEg‘hGH/v RN VIII 0 T 4 TL LA AI LF A A W E U P A A A A E L L A L . . I L U, 30 _.-.-_ . I— ‘ . z . . Lu 0 / 20 CALCULATED L/NE VALUE =[29884‘ - (0.0000/3238¢/( TONS/j CALCULATED moss VALUE =[29. 88¢ —(0.0000/3238¢)( ro~s)][r0/vs - 4,325][HA UL] IO 0 O 20 4O 60 80 I00 I20 I40 ISO I80 200 220 240 260 280 300 320 340 360 380 *EXCLUDING FLIGHT EQUIPMENT DEPRECIATION AND RENTALS TRAFFIC TONS ORIGINATED (THOUSANDS) (10) SOURCE: TABLE I4 Relation of Ton-Mile Factors to Expense It should be borne in mind that only a small portion of the Ground and Indirect Expense is air- borne in the same sense that the major portion of Aircraft Operating Expense is airborne, and that Ground and Im’firect Expense includes all or a major portion of executive, supervisory, and other ca- pacity burden expenses. Reports by the carriers to the Board indicate that, on the average, Ground and Indirect Expense comprises somewhat over half of the Operating Expense-:- of the feeders and almost 60 percent of the Operating Expense-x- of the trunks. (Table 33) Thair reports also indicate that, on the average, some 68 percent of Ground and Indirect Expense is incurred at headquarters by the feeders and approximately 55 percent by the trunks. (Table 32) While there are considerable differences among individual carriers in their showing in these respects, doubtless owing in part to lack of accounting uniformity, it seems apparent that a relatively large portion of the Operating Expense of scheduled air transportation is necessarily caused by headquarters-control activities and other centralized functions. This circumstance has important bearing on the showing of the G&I Expense equations respecting economies to be ef- fected by possible carrier consolidations and route pattern revisions; it also has important .im- plications with respect to "station costs." These considerations will be (fiscussed more fully later in this report. Although the two 0&1 equations for the trunks are simple in structure, they account for rather complex relations between 6&1 Expense and traffic ton—miles. The volume of traffic ton—miles of the several carriers is, of course, the product of leltiplying the average length of traffic haul by the tonnage originated of each, but the length- of-haul element of ton-miles is much less closely related than the tonnage element to the variabil- ity of (3&1 Expense. A function of Equations I'1" and I'2" is to accurately weigh the relation of , haul and tonnage factors to 6&1 Expense. DESCRIPTION AND APPRAISAL OF STANDARDS A good illustration of the result of this process is afforded by the figures of National and Northeast as shown on Schedule 1 to Table 23. The reported figures of both of these carriers conform almost precisely to their equation values. Both are light tonnage carriers, ranking thir- teenth and twelfth, respectively, among the fit-- teen trunks during the twelve months ended Sep— tember 30, l9h9. National, however, with 606.1; miles, ranked third among the trunks in average length of traffic haul, exceeded in this respect by only United and m. Northeast, with an av- erage haul of 189.9 miles, had the shortest av- erage haul of any trunk. The Equation "1" values for National and Northeast, in terns of unadjusted ton-miles, are 25.10 cents and 25.55 cents, re- spectively. The Equation "2" values, on a ton- mile-unit basis, are 7.62 cents and 21.92 cents. The composite 6&1 values are 32.72 cents and Not? cents, respectively, for National and Northeast. (Table 23) The difference between these composite values is largely attributable to the fact that haul is responsible to a. mob greater extent for National's than for Northeast's traffic ton-mileage, whereas haul is less a cause of GELI Expense than is tonnage. As previously noted, the trunk and feeder equation series differ in format and require sepa- rate description. (See Charts h-12) It was not found possible to obtain as close correlatiors by plotting the data for the tire groups of carriers on a single.set of graphs as by using separate graphs for each group. The feeders' minimum level of burden expense represents a major portion of their total expense; this minimum, on the basis of experience, appears to be approzdnately $166,600 annually, nearly equalling the total Gal Expense of the smaller feeders. other special considera- tions are that, unlike the trunks, feeders with rare exceptions must serve all stations on all flights. Typically, feeders operate a greater number of schedules than trunks to stations of given traffic volume. 11 Feeders! length of traffic haul and inter— station flight distance are typically short but vary greatly from carrier to carrier. It was found possible, however, with tiro exceptions, to obtain approximately as close correlation for the feeders as for the trunks, as between basic traffic factors and the residual expenses-x- remaining after subtracting $166,589 from their total Operating expense*. (See Tables 16 and 17.) The functions and effect of trmkline Equatiom "1" and "2” are joint. E nation "2" represents values ranging from 31,2 1,722 for the trunk of least tonnage, to $1,525,116 for the trunk of greatest tonnage. (Table 11:) As will be noted, this amount is nearly constant for the larger carriers since it varies only in the ratio that h,h00 bears to their total ton- nage. (Chart 6) Both in total amount and vari- ance, however, this equation represents an ex- tremely substantial value for the smaller trunks. It equals about one-half the total 6&1 Expense value for the smallest trunks as compared with only about one-thirtieth of such value for the largest. The result of its subtraction from the total (KI Expense of the several trunks is the residual which forms a uniform pattern of torr- mile values diminishing consistently with in- creasing tonnage at a rate described by Equation "1" (Charts I; and 5). The Aircraft Operating Expense-l- equations , "3" and "kg! are more closely identifiable by specific fumtion than the Gal Expense equations. The constant of 10.97 cents per ton-mile for trunks (Equation "3") is clearly an airborne ex- pense element. The $1,h03.§l per-mile—of—haUl constant might be described as a measure of the effect of varying volumes of tonnage. (Table 15, Chart 7) By dividing that haul constant by the number of tons, a ton-mile differential is pro- vided which bears an inverse ratio to such mnnber of tons: if a carrier transports 30,000 tons, its cfifferential amounts to approximately I4.68 cents per ton-mile; if 300,000 tons, approximately CHART 6 DOME$T|O TRUNKS GROUND AND INDIRECT EXPENSE: COMPONENT B EQUAT'ON“2" COMPONENT B OF G8I| EXPENSE RELATED TO REPORTED OPERATING EXPENSE*DATA FOR l2 MONTHS H II ** RES'DUAL 2 ENDED SEPTEMBER 30, 1949 TRAFFIC TONS ORIGINATED ' I00 T I I T l i \ * *TOTAL OPERATING EXPENSE * 90 LEss: CALCULATED AIRCRAFT OPERATING EXPENSE AND COMPONENT A OF GROUND AND INDIRECT EXPENSE 80 —(SEE PRECEDING CHARTS) C 3 70 ‘2. ,_ T < . Z o ‘3 60 c n: 0 o L 2 O I- 50 m 2 E '2 § (0 40 LN I! E s I 542 287 3 = *— j A |‘\ I; CALCULATED CURVE VALUE TONS + 4,400] _I F A o - $1 542 287 M W ' ° , = _'_»— o 30 c I/ CALCULATED GROSS VALUE TON$+ 4,400][T0N$ ORIGINATED] A T 20 A V)" ' A \\ L U l0 (.2 \\ A a A L L P I o o 20 40 Go 80 IOO I20 I40 |60 l80 200 220 240 260 230 300 320 340 360 380 TRAFFIC TONS ORIGINATED (THOUSANDS) * EXCLUDING FLIGHT EQUIPMENT DEPRECIATION AND RENTALS (12) SOURCE: TABLE I4 0.1;? cents per ton-mile; these differentials, added to the 10.97-cent ton-mile constant, would produce 15.65 cents and ll.I4I4 cents per ton-mile, respectively. (Schedule 3) Equation “I.“ is related to the "lift" ele-‘ ment of trunkline Aircraft Operating Expense}. Its value of $6.85 per ton, nmltiplied by the square of the ratio of tons lifted to tom origi- nated, is perhaps more complex in appearance than in principle: The ratio referred to is the aver- age number of times it is necessary to lift a ton of traffic from, and inclusive of, point of origin to point of destination. The individual carrier ratios range from a low of approximately 2 in the case of several carriers to a high of 3.51 in the case of National (Table 36). By dividing Residual "h" for the several carriers by their pertinent ratios, the average cost of lifting all of their tonnage a single time is caICIIEated. By plotting these calculated figures against the number of tons lifted by each carrier an average rate per fin fits?! for him-3.53% tonnage a si la time is We: calculate a carrier's ra io is 2, it follows then that one-half of its residual expense has been plotted against twice its number of tons originated, and, therefore, to interpret the plotted figures in terms of total value per ton it is necessary to multiply the graph value of $6.85 by the square of the ratio. (Chart 8; Schedule I43 Table 15) A feature of the graphs, except the feeder Aircraft Operating Expense-X- graph which warrants particular attention, is the a arent absence of station influence. (Aircraft Opera Expense-x- for the feeders is plotted on a station basis.) If the positions of the trunk carriers' values in relation to all 0&1 Eltpense graphs and to the 10 Mensa!- graphs are closely Wd in light of the varying number of stations operated by each (shown in Table 36, column 2), it will be noted that conformity to the graphs is not influenced by the number of stations operated. DESCRIPTION AND APPRAISAL OF STANDARDS The significance of this circumtance is that the variable influences of stations upon costs is accounted for by the equations. The effect of stations upon costs is to be found in the volume and type of traffic contributed by them to the carriers' total. This is not to say that the equations are not applicable to the costing of stations. 0n the contrary, the fact thatuthe equations account for station influence upon cost variability must be observed if the out-of-pocket cost of station operation is to be realistically determined. This subject is more fully developed under the following section. Choice of Method The equations are, of course, new and un- familiar. Their form is dictated by the relation between the carriers! expenses and their traffic. They describe this relation with the degree of accuracy indicated on the accompanying charts and tables. Further possible development would appear to depend, upon additional data covering future operating periods, and, perhaps, adoption and maintenance among the carriers of uniform methods of distributing "burden" expenses to nejor ac- counting classifications. There would seem to be no reasonable choice between starriards based, as here, upon statistical correlation and standards developed by "some other method." The conmon ex- perience of the carriers affords the only reliable evidence of validity. Method and the evidence of validity are the Joint products of correlating the pertinent factors of such experience, and evidence of validity seems an indispensable quali- fication of standards even though it my call for the use of new and unfamiliar processes in their application. The factors relied on by the standard equa- tions are surprisingly few. But they apparently include all major cost influences. It seems par- ticularly noteworthy that it was not found useful to distinguish between the various types of traf- fic comprising the total tonnage of the several 13 carriers. The relative volumes of mail, passengers, express, and freight, comprising a carrier's total tonnage, seem to mks no difference in its level of expense. The rates of revenue received for the several types of traffic, in relation to the proportions of the latter and to a carrier's expense level, unioubtedly do have an effect upon its profitability. Parhaps rates of revenue have an indirect effect upon cost levels. If so, such an effect is not sufficiently marked to permit correlation. Meme- revenue relations will be further discussed in the following section. Note: Because of the highly local character and Wamall size of feeders, their expense figures are more subject to substantial deviation from the equation values than the trunks. Their localness my reflect special area cost levels not applicable to other carriers, and their snall size tends to emphasize the effect upon deviation of expenses which are out of line with those of other feeders. While it is not feasible to attempt to analyze all deviations from the equation values, Empire's minus—21.79 and TTL's plus-22.h3 percent appear to require cement: During the calendar year 191:9 Empire paid no salary to its president, and it paid total officers' salaries of only 88,h00 as compared with the average of other feeders of $28,975. TTl paid its president $22,608.08 and total officers' salaries of $38,h08.l6, an amount for this expense classification which was apprenti- mately equalled only by Pioneer and Southwest, carriers transporting over twice M's tonnage. It also seems notewortlw that TTA's tonnage load factor of 21:57 percent was the lowest of the ten feeders included in this report, although it ranked sixth in tonnage transported. Empire's tonnage load factor was 39.09 percent, next to the highest of these feeders, and its tonnage was next to the lowest. (Table 36) Empire's reported station expemes were well below the feeder average for other feeder stations of comparable tonnage. (See Table 32.) CHART 7 DOMESTIC TRUNKS AIRCRAFT OPERATING EXPENSE: 233233;“; COMPONENT A OF AO EXPENSE RELATED TO REPORTED OPERATING EXPENSE* DATA FOR I2 MONTHS RESIDUAL "3"** ENDED SEPTEMBER 30, I949 AVERAGE MILES OF TRAFFIC HAUL '°°IIIIIII IIIIIII **TOTAI_ OPERATING EXPENSE * LESS: CALCULATED GROUND AND INDIRECT EXPENSE THE "AIRBORNE EXPENSE" EQUATION REPRESENTS THE INTERSTATION FLIGHT COST '— 90 AND COMPONENT B OF AIRCRAFT OPERATING INFLUENCE AS OPPOSED TO THE "LANDING-DEPARTURE" INFLUENCE. THESLOPE EXPENSE VALUE (10.97 CENTS) IS CONSTANT WITH TON-MILES. THE INTERCEPT VALUE ($1,405.51) IS A "CONSTANT" PER MILE OF TRAFFIC HAUL: IT PROVIDES, 80 __ (SEE SUCCEEDING CHART) THEREFORE, A DIFFERENTIAL TON-MILE ELEMENT WHICH VARIES FROM CARRIER __ TO CARRIER IN INVERSE RATIO TO THE AVERAGE NUMBER OF TONS ORIGINATED BY EACH, I. E., 70 1 435-3; : 7.02;! OR We f “5'51 : 0.70¢ _ (D E _J 60 _l 0 ° A u. 0 50 '- m 0 Z 5, X .- CD) 40 E L I L .— 30 UN . c A A / p N I 20 33 ‘fi I . gc Nggrg‘y LF , 0AL0ULArE0 LINE VALUE -—[$/,403.5/ +00. 97¢)170/v3)] A I NO SA TIT LA / GALCULATED GROSS VALUE = [$4 403. 5/ (HAUL)] +[/o.97¢ (TON-MILES” I0 ./ .’./0 '/.’.o $|.403.5I{o_/ | o 20 4o 60 80 I00 I20 I40 I60 l80 200 220 240 260 280 300 320 340 360 380 TRAFFIC TONS ORIGINATED (THOUSANDS) SOURCE: TABLE '5 *EXCLUDING FLIGHT EQUIPMENT DEPRECIATION AND RENTALS CH ART 8 DOMESTIC TRUNKS AIRCRAFT OPERATING EXPENSE: COMPONENT B COMPONENT B OF AO EXPENSE RELATED TO REPORTED OPERATING EXPENSE* DATA FOR I2 MONTHS RESIDUAL"4" ** ENDED SEPTEMBER 30, I949 - TRAFFIC TONS LIFTED THE ““0 [TRAFFIC TONS ORIGINATED] 20 I I T l ** X» Ia _ TOTAL OPERATING EXPENSE mm ”50 To WM 22. _ LESS: CALCULATED GROUND AND INDIRECT EXPENSE AND COMPONENT A I6 —~ OF AIRCRAFT OPERATING EXPENSE (SEE PRECEDING CHART) I4 0') Ir 240 CALCULATED LINE VALUE . CALCULATED CROSS VALUEI [$549.30 +(26.40¢)(70/vs L/FTED PER srAr/omg] [3: 549. 30 (FL/GHT- 27. 51/[37A 7/0/v3]+[26. 40 ¢ (TO/V5 L/FTED)(FL/6‘H7' —2z5g] O 2 4 6 8 IO I2 I4 TRAFFIC TONS LIFTED PER STATION (HUNDREDS) *EXCLUDING FLIGHT EQUIPMENT DEPREGIATION AND RENTALS (1'7) 20 22 24 SOURCE: TABLE I7 "’fi CHART ll DOMESTIC FEEDERS AIRCRAFT OPERATING EXPENSE: COMPONENT B EQUATION "4" X- RELATED TO REPORTED OPERATING EXPENSE DATA FOR I2 MONTHS “SEW-"30"” ENDED SEPTEMBER 30, IS 49 STATIONS I00 I I I 90 _**ToTAL OPERATING EXPENSE* LESS: CALCULATED GROUND AND INDIRECT EXPENSE AND THE TON-MILE ELEMENT (AS A RATE PER 80 _ UNADJUSTED TON-MILE) OF COMPONENT A 0F AIRCRAFT OPERATING EXPENSE (SEE CHARTS IO AND I2) 70 Z O E I- 60 (D 0: LI.) “- so P 2 c I: 2 j M H AL 5' 40 FOR CALCULATION OF THE LINE VALUE w 3 A 0 SEE CHARTS Io AND 12 3 I . LoL . B S ,d/ a, 30 w .l/ ‘2) w 2 . / ff, 26.40¢ PER UNADJUSTED TON-MILE E A // g 20 x 27.5 "FLIGHT” MILES A / 35 - $7.25 PER TON LIFTED / IO 0/. / E / M o ,/ P 27.5 MILES -.o I o I o 20 30 4O 50 60 70 80 90 IOO AVERAGE INTERSTATION FLIGHT DISTANCE (MILES) SOURCE: TABLE '7 *EXCLUDING FLIGHT EQUIPMENT DEPRECIATION AND RENTALS I13) CHARTI2 W AIRCRAFT OPERATING EXPENSE: COMPONENT B COMPONENT B CF AC EXPENSE RELATED TO REPORTED OPERATING EXPENSE* DATA FOR I2 MONTHS ENDED SEPTEMBER 30, l94-9 RESDUAL"4"** L000 éoo **TOTAL OPERAnNG EXPENSE* LESS CALCULATED GROUND ANDINDIRECT EXPENSE AND COMPONENT A OF AIRCRAFT OPERAnNG 800 —— EXPENSE (SEE PRECEDING CHARTS) 700 m 600 a: d .J _| o 500 s o w u. A o 400 ,3 P , 3 300 p 8 W D '- R I-Io T 200 N o AN--A l g s B CALCULATED LINE AND @3053 VALUES . [at zes (TO/VS L/FrEog] I00 0 E M P -I00 -200 O 5 IO IS 20 25 30 35 40 45 so TRAFFIC TONS LIFTED (THOUSANDS) SOURCE: TABLE I7 *EXCLUDING FLIGHT EQUIPMENT DEPRECIATION AND RENTALS I19) TABLE 3 DIN-MILE ANALYSIS OF WENSE-REVEII‘IUE MARGIN 0F DOMESTIC EUNK 1m CARRIERS (Based on data for 12 months ended September 30, 1%) me Carrier (bumercial Reported Flight Interest on (Ranked in order Reported Operating znopenee h‘ansportution ibtal Equipment De- reported of total calcu- excluding Flight Equipment revenue: Per transportation prociation and investment: ’Ibtal lated ton-mile Depreciation and Rentals: comercial MARGIN A revenue: Per 11me B .ientals: Per Per total Sum of Fax-cent IIARGJJI C : expenset) Per total ton-mile ton-mile (col. 3 - col. 2) total ton-mile (col. 5 - col. 2} total ton-mile ton-mile cols. 2,7,8 of col. 2 (col. 5 - col. 9) Carrier (2) (3) (it) (5) (5) (7) (5) (9) (10) (11) m 79.71¢ 66.087! 43.6375 96.1% 16.117¢ 9.111% 7.05:1 96.21;! 120.71. — 0.069! NBA 001. 77.73 63.98 -13.75 87.115 9.72 5.113 1.. 36 87.52 112.59 - 0.07 001. CONT 0.127 25:22 411.43% 712.5% 13.1532 6.10 111.19 22.05: 3111. -6.1-.3 $111 MCA 0 9 "' 0 0 ‘ ' I e e e m 62.11; 60.214 - 2.19 71.10 8.67 6.23 3.2; 72.09 115.3? .1023 ML cas 60.68 58.85 4.82 75.113 13.153 3.3; $372 $2.230 $2.211. $.20 wee/cg W I . 59.51 0.7 1 . o . . e DfL 22]; 58- 0-10 66.91 . L75 3-75 06-95 1114.50 43-111 DAL BNF 58.00 57.19 - 0.81 61.1.89 6.89 1.1.76 11.51 67.2] 115.98 -2.38 INF ‘31 c1? 511.10 50.78 - 3.32 63.115 9.35 5.78 1.68 59. 110.09 3.89 car mu 51 97 52055 0 58 59079 7002 5-57 70% 65-51 1%.05 ' -5¢72 NM 1:11. 50: 60.113 9183 61.30 10.70 5.63 2.89 59.12 116.811 2.18 mu. MA 11.9.09 53-95 )4- 56077 7:63 11-51 5-51 58.91 120.00 -2.1—L m 1‘ M 115.16 51.91. 6.78 . 9.20 6.11 17.25 55.52 122.91. -1.16 011. ML 1.2.72 51.57 8.85 51.98 9.% 11.20 11.58 51.30 120.811 0.68 1.1L W Commercial Calculated Coxmorcial transportation Flight Equipment Interest on Calculated Operating kpense transportation revenue plus Depreciation calculated lbtal excluding Flight Equipment revenue: Per calculated nail and Rentals: investment: Sum of Depreciation and Rentals: commercial MARGIN A1 revenue“: Per LIARGIN 131 Per total Per total cols. Percent MARC-Ii! 01 Per total ton-mile ton-tulle (col. 1); - col. 15) total tondmile (col. 16 - col. 15) ton-mile ton-mile 1 18,1 of col. 13 (501- 16 - col. 20) ‘ (13) (111) (15) (16) (17) (195 (20) (21) (2) I NBA 79.72 1! 66-08¢ ~13 .6117! 66.00;! ~13 .72 ¢ 8.31;! 0.17;! 96.20;: 120.67 -3o.2o¢ NBA COL 78.30 63.98 411.32 65.91 411.59 7.82 7.77 93.89 119.91 -29.98 COL" com 70.27 55.80 -111.1.7 55.93 417.31; 7.60 7.1.1 85.28 121.36 413.35 com 1 ”CA 65-12 590,45 "3067 99011-7 “3065 6021‘. 6022 75058 119071-1— "l()oll m HAL 62.1.7.5 60. -2.21 . 7 -2.21 7.66 7.% 77.37 125.89 -17.13 HAL 06:8 59 93 58 85 -1 08 58.90 -l.03 5.90 5.88 71.71 119.66 -12.81 061$ 8/1 58:60 59:51 0:91 59.53 0.93 5.97 5.90 70.17 120% 40.91; “/1 DAL 58-55 58-57 0.02 58.62 0.07 6.511 6.511 71.1.3 12.00 -12.81 DAL 13111? 55.73 57.19 1.16 57.32 1.59 5.72 5.66 67.11 120.12 -9.79 BNF CAP .13 50.76 -3.35 50.99 -3. ~ 6.01:. 5.85 66.02 121.97 --15.03 CAP N1“ ’49- 5 52- 5 5 00 52. 5 5-1-10 11490 11.89 590314 119-76 ~6-59 NM ( EAL 119 60 1-3 10:95 googl 12.93 5033 15:33 220?; fag-1;; '2-31; :5: MA 113 07 53 9 5 58 1. :2 .55 e - " . mu. 115307 51:91: 6:87 52.116 7.39 E68 1.60 511.35 120.59 -1.89 w. ML -80 51-51 8.77 51.97 9.17 1.1.8 1.11 51.69 1mm 0.28 1.11. ' Operating Bxpence data here ”“31““ flight equipment d°Pr°°iati°n “”63 (continued): Column 33 Reported revenue frm 135391169”: 910953 Notes (continued): Column 16: Reported revenue from passengers excess and rentals. . . baggage, express, and freight. baggage, express, and freight plus mail ” Calculated mail revenue in based on 60 cents P9? mail ton-111116. Column 5: Comercial transportation revenue (column 5) revenue commuted at 60 cents 1')” mail ‘ plus reported mail revenue. ton-mile. . Notes: General—(l) 1119 average of column 10 is 117.07 percent, and, Column 7: From h‘ble 28. Column 18; Calculation is based on average relation- of column 21, 120.96 percent. Column 8: 6 percent on reported not investmnt after ship of flight equipment depreciation (2) lhe ton-mile rates shown in this table are based taxes at 58 percent. (See hblee 5 and 30.) and rentals e‘cnense to A0 Expense on the total expense and revenue data in Column 13; From Table 23. (S Sch 'dul ‘- 28 - 181110 5 and the total, commercial, and mail Column 1L1: As reported. Sec colunm 3. 9° e 55 and Table .) 7 ton-mile data in liable! 26 and 35. Source: Column 19: Based on Table 5. 6 percent omcalculated net investment after taxes at 38 percent. (Computation is based on general relationship of investment to operating expenses. See Table: 5 and 50.) RELATION OF COST RELATION 0F CCBT ELEMENTS T0 CLASSES OF TRAFFIC AND RATES OF REVENUE No differential in the costs of transporting passengers, cargo, and other classes of traffic is apparent. Comercial self-sufficiency required comneroial revenue yield not less than 121 percent of Operating Expensei. General Comparisons Accomparvixg Tables 3 and )4 bring together, in terms of values per revenue ton-mile, both operating revemzes and the elements of operating cost and profit comprising revenue requirements. Analysis of the average revenue composition shown in Tables 3 and )4 appears in supporting Tables 7 and 8; Table 7 shows percentage of traffic by class, Table 8 the average rate of revenue for each class. Data in the four tables are arranged in the rank order, beginning with the highest rate, of the amount of calculated Operating Expensei per ton-mile. It becomes apparent from a brief emmination of these tables that the disparities between the financial operating margins of individual carriers are almost wholly attributable to (a) differences in inherent expense situations, (b) inequalities in financial position reflected in both flight equipment and working capital investment, and (c) the effect of lack of uniformity in average revenue rate levels due to variations in traffic composition and in class rates. Tables 3 and h are arranged to displair cer- tain significant relations between requirements for government financial support and the elements of cost and revenue which underlie such require- ments. The first five figure-columns in both sectiom of these tables Compare rates of Operating Eiqaensefi- (reported and calculated) with rates of both comercial and total revenue. The lower sections of both tables include mail revenue at a rate of 60 cents per mail ton-mile in order to permit estimation of the relative comercial self- sufficiency of the various carriers. The final ELEMENTS TO CLASSES OF TRAFFIC AND RATES figure-columns provide capital cost elemnts in order to afford comparison between total revenue and total revenue requirements. Capital Charges The added cost elements are largely influ- enced by circumstances external. to operation and are not, therefore, susceptible of approximate correlation with traffic and service pattern characteristics. Their inclusion is necessary, however, if transportation revenues and the total requirements for such revenue are to be shown on a comparative basis. In projecting the uniform capital cost ele- ments, reflected in Tables 5, 6, 28, and 30, the intention is to serve only the limited, basic pur- poses of this report. It is not implied that the projectiom either wholly or necessarily represent the reasonable requirements of the individual car- riers for purposes of rate-making or studies of comparative efficiency. The principal variations between the ”reported" and "calculated" figures for each carrier, as presented in the comparative columns of Tables 3 and h, are attributable to the capital cost elements. The column headings and notes appearing on the tables, and their sup- porting material, more/fully explain the character of these projections.— 1/ There are great disparities among the relative ' depreciable values of the fleets of the various carriers, a circumstance largely beyond the con- trol of individual management. Further, the ”earnings element“ requirement, based as it is on net investment, reflects not only these fleet disparities but also the individual financial position of each carrier. There is wide range between the minimum working capital necessary to bare existence (historically, fre- quently a negative value for certain air car- riers) and the magnitude of working capital which might be regarded as within the bounds of reason. These considerations, while R OF EVENUE 21 Relation Between Rates of Revenue arrl anaense There is an indirect but obvious relation between traffic rate and expense levels: expense per traffic unit tends to vary in inverse ratio to traffic volume; traffic volume tends to vary in inverse ratio to rate levels. The cents-per- ton-mile comparisons shown on page 9 clearly illustrate the first tendency, and it should be borne in mind that the calculated ton-mile costs involved in the comparison are in no way, based on rates of revenue. The second tendencf is, of course, too well known to require specif ic demon- stration here: other factors being equ) l, more passengers will move at 1; cents per mile than at 6 .cents per mile, and more cargo at 20 cents per ton-nfile than at no cents per ton-mile. The standard equations estinete the effect, upon cost, of variance in the volume and character of traffic. While variance in traffic volume among carriers is obviously attributable to vari— ance in the relative scope and potentialities of their route systems, there is also large variance among carriers in average revenue rate levels. (Table 8) To this variance in rate levels must be attributed a degree of variance in volume. The reason for variance in the traffic volune among carriers, however, whether it be variance in inherent potential or in rates of revenue, appears to have no very important bearing upon operating expense levels. As shown by Table 8, there is a general trend with traffic volume of the trunkldnes' average commercial revenue rate levels, ranging from 66.08 cents per ton-mile for Northeast to 51.57 cents for American. This trend doubtless influences, and is influenced by; the 1/ (continued) indirectly related to the traffic T and service pattern factors of the carriers, are not statistically correlative with such factors. The basis of the capital cost pro- jections is shown by Tables 29 and 31 an! their supporting material and notes (Tables 28 and 30, and Schedule 5). TABLE 1. Carrier (Ranked in order of total calcu- lated ton-mile 352...”, and rentals. Notes: WIS ROB HON TI‘A CHA EI‘IP WCA FDA PAL SWA WIS ROB MON TIA CHA 176A FDA PAL $711 (2) ZION-LEE ANALYSIS OF EXPENSE-REVENUE MARGIN 0F DOMES TIC FEEDER AIR CARRIERS (Based on data for 12 months ended September 30. 191.19) REPOR ED BASIS Commercial Reported Flight Interest on geported Operafing Expense transportation Ibtal Equipnent De- reported excluding Flight Equipment revenue: Per transportauon preoiatlon and investnent: ibtal Depreciation and Rentals: commercial MARGDI A revenue: Per MARGDW 8 Rentals: Per Per total Sum 01‘ Percent mom 0 Per total ton-mile ton-mile (col. 3 - col. 2) total ton-mile (col. 5 - col. 2) total ton-mile ton-mile cols. 2.7.8 of col. 2 (col. 5 - col. 9) Carrier (2) (5) (L0 (57 (5) (7) (B) (9) (10) (11) 2176.575! 58.0115! 488.539! 2.07;! 25.50% 21.16;! 12.3071 280.039! 113.5? -7.96¢ WIS 170.93 711.91 -96.02 9.16 -21.77 16.08 5.98 192.99 112.91 4.7.3.83 ROB 165.26 55.59 409.87 197.85 511.57 18-117 5.75 137-116 1111.82 10.57 M 195.86 17.8.85 417.01 188.96 -6.90 12.19 14.71 213.06 108.78 -21-,.1o 111 150.71 53.22 -97.19 161.61 10.90 13.09 2.61 166.1.1 110.142 44.80 0111 116.66 1411.70 -71.96 1311.141; 17.78 10.18 7.22 1311.06 1111.92 0.38 EMF 128.110 62.62 -65.78 133 .65 5. 25 18.03 9.112 155. 85 121.38 -22.20 VIDA 121.52 61.07 4.021113 126.50 11.98 9.89 3.88 135.29 111.33 -8.79 FDA 95.57 55.95 441 111.96 16.59 7-71 5.05 106.15 111.26 5.83 PAL 87.88 51.72 ~36.l6 107.05 19.17 13.81 11.01 105.70 120.28 1.35 SWA W Commercial, Calculated Comercial transportation Flight Equipment Interest on Calculated Operating Expense tansportation revenue plus Depreciation calculated lbtal excluding Fligmt Equipment revenue: Per calculated mail and Rentals: investment: Sum of Depreciation and Reninls: commercial 11111011: A1 revenue“: Per 1111mm 31 Per total Per total 001s. Percent 1111mm 01 Per total ton-mile ton-Imile (col. % - 001. 13) total ton-mile (001. 16 - 001. 13) ton-mile ton-mile 13.18512 of col. 13 (col. 15 - col. 20) (15) (I57 (16) (17) (I5) (I9) (2) 2116.007: 58.OI4¢ -1s7. ,1 55.12,: 487.887! 23.16;! 11 517,; 281.00,! 1117.23 -&2.88¢ ms 167.37 711.91 92.22 71.119 -92.88 12.1411 7:01 186.82 111.62 -112.33 1103 160-52 55.59 ~10? . 15 55.59 -106.95 16.25 7-75 1811-50 1111.911 450.91 EN 159.98 118.85 -111.13 149.50 410.118 18.146 8.27 1816;71 1116.71 -137.21 MA 1 .57 .22 -9‘-.15 3.52 -98.85 15.18 7. 0 17 85 l 7.7 -121.33 cm. 125.17 33.70 -1 h? 5.11. 4011.03 11.83 6.133 167.113 112. -122.29 my 131.17 62 62 -68.5 62.59 -68.58 10 62 71 11.7.50 112.1. 431.91 mm 121.11 61:07 4.0.03 61.05 -60.06 13:73 2:20 11.1.01. 116.142 -79.99 m 95.81. 53.93 411.91 511.11 11.73 11.21 J... 111.95 116.81 37.611 211. 87.02 51.72 -35.30 51.90 ~35.12 8.01.1 1.1.02 99.06 113.86 7.18 SWA # Operating Expense data here exclude flight equipment depreciation Notes (continued): Column 3: Reported revenue from passengers, Notes (continued): Column 16: Reported revenue from passengers, excess excess baggage, express, and freight. baggage, express, and reight, plus mail ”- Calculated mail revenue is based on 60 cents per mail ton-mile. Column 5; Comercial transportation revenue revenue computed at 60 cents per mail (001mm 3) plus reported mail revenue. ton-mile. General—(l) the average of column 10 is 113.97 percent, and, Colman 7: From Table 28. Column 18: Calculation is based on average relation- 01‘ column 21, 1111.171 percent. Column 8: 6 percent on reported net investment ship of flight equipment depreciation and ihe ton-mile rates shown in this table are based after taxes at 38 percent. rentals expense to A0 Expense. (See on the total expense and revenue data in Ihble 6, (559 1533193 6 ”Id 30-) Schedule 5 and M10 28-) and the total, commercial, and mail ton-mile 001mm 13: From Table 23. Column 19: 6 percent on calculated net investment data in Tables 26 “d 35' (7011111111 11;: after taxes at 38 percent. (Computation As reported. See column 3. Source: (22) Based on nble 6. is based on general relationship of investment to operating expenses. See 1812100 6 and 30.) RELAT ION OF COST trend in traffic volume. For example, American's volume would have been less during the twelve months ended September 30, l9h9, at an average commercial revenue rate of, say, 66.08 cents than it actually was at 51.57 cents per ton—mile, but, except for its very high inherent traffic poten- tial, it could not have attained approximate com- mercial self-sufficiency at so low an average rate as 51.57 cents. It is, however, by no means apparent that American's average 51.57-cent reve- nue rate, or other such average rates shown on Table 8, represent optimum levels from the stand- point of net operating income. As previously observed, in developing the standard equations it was not found necessary to give weight to the varying proportions of differ- ent classes of traffic represented in individual carrier's traffic totals. Indeed, although the proportionate class composition of traffic varied greatly from carrier to carrier, no consistent relation between carrier expense deviations and such traffic-class variations is discernible. Freight It is noted (column 8 of Table 7) that the percentages of total traffic ton-miles represented by air freight varied among carriers over a range of from zero to approximately 16 percent. Freight rates varied from approzdmately I45 cents a ton- mile for certain of the feeders and for Colonial, to less than 20 cents a ton-mile for the "Big Four.” (Table 8) The relation of air freight rates to inherent costs is subject to reachr analysis by use of the standard equations. By September, 191:9, air freight had been in fairly extensive operation for some three years. While some small portion of its total volume doubtless represented diver- sion from air express, it is here gagged, for A purposes of illustration, that an air freight is \traffic which would be lost to the carriers if \air freight service, as such, were discontinued. girlie following table shows the Margin A1 gains for \ 1‘.‘ \ ELEMENTS TO CLASSES OF TRAFFIC AND RATES OF REVENUE 23 Calculated Operating should prove a useful @ensex- : Comercial Revenue : Marvin A}, tool for appraisal of Tota ~Exc u ‘na : o c 1 : Tom Exuuifing the net financial Carrier traffic freight : traffic freight : traffic .rgight effect of reduced-fare : : ' services. com 70.27¢ 70.959: : 55.8% 57.50¢ : -1h.h7¢ -13.h5¢ m 11-5007 hSOl-Il 2 510914 57.87 3 6087 120,46 0n the basis Of ‘ AAL h2.80 273.21: : 51.57 57.91 : 8.77 1h.67 the limited showing of three selected carriers which it is estimated would have been made for the twelve months ended September 30, 19149, had they not conducted air freight services. The comparative ton-mile ex- penses are calculated by use of the standard equations, the conparative revenue figures on the basis of the pertinent revenues and ton—miles. (See Tables 3, 8, 26) The savings indicated by the Margin A1 fig- ures range from approximately 1 cent per ton-mile in case of Continental to 6 cents for American. The estimated saving is, of course, attributable to the disproportionate reduction of average ton- mile revenue yields caused by the low freight rates, as compared with the negligible average- ton-mile expense saving contributed by freight volume. Passegers Determinatiorxs regarding the net effect of reduced~passenger-fare services upon operating margins would appear to require more extensive study than the scope and time considerations of this report permit. The coach-service experiment has had shorter and less comprehensive test tinn freight service, and adequate statistical data are not available from which to estimate the "new" volume contributed by reduced-fare services or the haul and lift characteristics of this vol- ume. It seems apparent, however, that when these deficiencies are remedied the standard equations ,lriiAl—l, ..__._...._._.,Wv.ie ,, the tables supporting this section of the report and certain other obvious considera- tions, it would appear that reduced-fare passenger services have relatively greater possibilities for financial success than cargo services. (See Tables 7 and 8.) Reduced-fare services are designed to attract off-peak travel and they yield ton-mile rates approximately 100 percent greater than cargo rates. On the other hand, there is the probability of diversion from the higher-rate traffic. While there is no showing, on the basis of the study here reported, that abnormal volumes of reduced— fare services have resulted in lower than calcu- lated ton-mile costs, it is not believed that the statistical data in this connection are yet con- elusive. The effect of reduced-fare service upon av- erage revenue yield is, of course, directly call.- culable. The impact of such service upon volume is difficult of estimation ard at best not subject to entirely conclusive determination. It is cer- tain, however, that a given percentage of rate reduction Would have to induce a relatively high gain in traffic volume at Little increase in ex- pense burden, in order to yield a net profit, as is evidenced by the example relating to cargo. The data presented in this report, particu- larly the data presented on Tables 7 and 8, lend no support to a theory that the very extensive reduced-fare services of a few w the carriers benefitted their revenue-expense relationship. It is not intended to imply disbelief in the favorable potaitialities of well-planned, off- 1| 1| H M TABLE 5 ANALYSIS OF EXPENSE-REVENUE MARGII‘I 0F DOMESTIC TRUNK AIR CARRIERS (Based on data for 12 months ended September 30, 1919) REPOR 'IED BAS IS Carrier (Ranked in order l’gpoyted Flight of total calcu- Reported Operating 1I'xpense Commercial Total mqulpment De- Interest on flbtal lated ton—mile excluding Flight Equipment transportaltion MLRGIN A trmSportation MARGIN B precintlon and reported (Sum of {JARGIN C expense’) Depreciation and Rentals revenue (col. 5 - col. 2) revenue (001- 5 "' (301- 2) p Rentals investment cols. 2,7,8) (col. 5 - col. 9) Carrier (2) (3) (1+) (5) TE) ' Z75 w) 19) 110) NBA 3 11.912361; 3 14,038,151; $3 -905.950 3 5.965.192 $ 1:021.128 6 587.5714 35 1137:1178 $5 5.967.th :3 6.931 NEA 001- 3.900.072 5 #119,155 '7506917 11.387 .676 1187 .6014 212,670 218.637 14.39th ‘3.731 001' 00M 11,916,753 5,786,607 4.150.126 5.186.81J4 270.111 026.122 295.556 5.656.511 4119.667 COM ”GA 613581827 600230699 '3350128 703623816 1:20 79989 5119,1121 2051908 7311110156 111.18.6é0 “CA 1w. ' 10,972,056 10,271,656 ~700,L100 12, 96,0111 1,5 .005 1,095,515 601,625 12,669,222 -173,lol HAL 01$ 7.315.258 6.801141% 638.812 8.608.666 11355-1408 1153.551 517.721 8.2911550 5111.536 0655 I; 1' 8,907,810 8,716,522 -l91,1:88 11,889,102 2,981,592 1,096,685 750,627 10,755,122 1,194,280 11/: DAL 15 #055925 15a 183.313 '5m0615 15.601.012 1.892.0311 1. 109.059 879,770 15.697 .757 616.7115 DAL BNF 12.937.802 12. 155:059 ~781'ra765 111.1L7hoéf37 1. 536, 885 1.062.7140 1.005. 57 3 15.0063115 63.1.1128 "NI: CAI“ 25,2]5’3011 21,325,871!» ‘10924911430 2723000362 1130255058 106%9621 72111452 2506%053] 126749005 31‘ WA 23.520225 22. 507 .287 --.012.938 £7,060,622 3.5110383 2f20,676 3.238111%: 2912):?!22 $623362: £an EAL 621 6 C"5,16 8 252 070 9 {311 8, 12 190 7 120 811 3 "5 7 J m m $110013? 571656.633 ’7353826 6610313576 83930: 2 5.2119189 6:178:5911 6835281895 4112972519 gm ”AL 73 .1477 3757 79 , 1110 .871 5.663 1 15h 88 .1152 .1166 111. 9711.729 91950558 6 .905 a 506 90.355. 58 1 4:881: 115 DAL ML 31.077566 9311893685 12.112519 98.61.411th5 171%7lo79 7.969.956 3.513.794 9735613076 1.355.369 “L W Commercial transportation Calculated Total Calculated Operating Expense Commercial revenue plus Flight Equipment Interest on (Sum of excluding Flight Equipment transportation MARGIN 11 calculated mail mam Bl Depreciation calculalxsd cols. MARGIN cl Depreciation and Rentals revenue (col. 13 - col. 12) revenue“ (col. 15 - col. 12) and Pentals investment 12,1],13) (col. 15 - col. 19) (12) T137 (173 (15) , (15) (17) (187 (19) (20) m S h.9h3.2118 3 11,038,191; 3 9011,8111 is 11,092,018 6' 4351.250 3% 5111.970 .3» 506,668 6- 5,9611.886 $-l,872,868 NBA ‘ COL 3:928:52? 3.1149: 155 479.372 3,206.6” 421.900 592. :92 390.058 14.711007? "1:50hob50 COL CONT 11.916.689 3.786.607 '1.130:082 3.913.383 4.003.306 551.716 513.613 5.967.018 43355.85 CONT \ 1101 6,598,515 6,025,699 -57h,616 6,216,189 -582,126 652.1111; 650.0111 7,900,800 -1,6ell,611 HCA m 103714.965 10,271,656 403.329 10.586568 688.397 laihSJ-z-Bé 1:276:810 1'5 .597.le 4.010.615 ML 1 (2:3 7:252:9'4-7 61801-111116 441489501 7,127,097,4- "121h975 7130957 7121115 836790019 “10551-0145 ws ‘ W/I 8.885.185 6.716.322 468.861 9.0261130 111.267 905.096 - 895.275 10.685552 4.659.122 14/: 1 DAL 15:72] 0885 15: 1881315 ”5391570 1307M-h799 163916 13555.09le 1011859102 1697460927 ’310020128 DAL ‘ EMF 12014323095 1231533039 ‘2791056 1207860188 35111095 182768867 13%035214 114096901186 ‘2318 1298 BET CAP 233839236 21.325371: 4.962.562 21,939,952 465148.231; 2.599.115 2.517.051 23J+0ho1+50 '6. .1478 CAP ; m Qol1266569 22. 507 .287 30.718 25.965311}; 1.539. 175 2.2196081; 2.210.555 %38%8 188 4.590% WA 3 m 56.352529 65.375.169 9652066100 683.7%0972 12Mlgb115 (DJ—#586352 6’2020705 686993.536 496.6111 EAL I 11“ 556915.601; 57 18560638 1.921.031; 635011-1158 7.388.894 5.922. 189 5:801“ 165 67.61-11.958 44.576500 MA 1 ML 75131110759 79331100871 517991112 8533561359 12001113600 706081905 7011932372 8831111110236 ‘390873877 UAL ‘7 “L 8102339200 95: 159.685 11695691185 98.627 {579 17 .3911. 179 3.500.138 865511.120 981087 .808 539.571 AAL r ‘ Operating Expense data here exclude flight equipxzent depreciation 1101753 (continued): (70le 7: From Th'ble 28. Notes (continued): Column 1']: Calculation is based on average and rentals. _ Column 8: 6 percent on reported net investment relationship of flight equipment de- es Calculated mil revenue is based on 60 cents per mil ton-mile. after taxes at 38 percent. (See ThbleSO.) . preciafion and rentals expense to A0 - Column 12: From hble 1. Expense. (See Schedule 5 and Mle 28. Notes: Column 2: From Table 1. Column 13: As reported. See column 3. Colwm 18: 6 percent on calculated net invostnent Column 3: Reported revenue from passengers, excess baggage. Column 15: Reported revenue from passengers , excess after taxes at 38 percent. (Computation gxpress, aid freight. baggage, express, and freight, plus mail is based on general relationship of ource: w C.A. B. revenue computed at 60 cents per mail investment to operating expenses. Column 5: Commercial transportation revenue (column 3) plus ton-mileo See Table 30. ) reported mail revenue. Source: Recurrent Reports. C.A.B. Source: Tables 1. 28, 50. ( 2h ) RELATION OF peak, traffic services at reduced rates, but rather to direct attention to the dangers of uneconomic expansion of such service. This subject will be further cemented on under the subheading "Comercial Self-Sufficiency.” Mail Accomparying data reflect no differential between the unit cost of transporting mil and other classes of traffic. Mail volmne is, of course, relatively small. It accounts for an average of only 3.12 percent, for the feeders, and 14.00 percent, for trunks, of their total traffic torr-ndles, and it ranges from 1.10 per- cent to 7.8).; percent for inflvidual carriers. (Table 7) There are, perhaps, certain mail-cost con- siderations incident to the authorities and priorities of the Post Office Department over mail and mail service, and to nail-rate proceed- ings, not applicable to other classes of traffic. Any cost differentials which may be incident to these considerations are not, however, identifi- able with deviations of individual carrier ex- penses from their standard equation values. Historically, mail compensation has been calculated to supply the can'iers' financial needs under conditions of namgement, as specified in the Civil Aeronautics Act, and in view of the facilities used and useful to the mail service, and in consideration of their commercial revenues. Mail payments fixed by the Board have men geared to mail volume and mail service in a manner cal- culated to supply such needs. It seems clear, however, that the characteristics of mail traffic, as such, cannot afford an index of the carriers' operating costs or financial needs. Mail volume relative to other classes of traffic is much too small for this purpose and its other character- istics are not correlative with the carriers' costs or their financial needs. For example, the short-haul carrier characteristically experiences COST ELEMENTS‘TO CLASSES OF TRAFFIC AND higher unit costs and lighter mail loads than long haul carriers of similar traffic density. (Conquers the pertinent figures for Northeast and Capital with those of Natioml and Northwest.) Commercial SelfnSufficielgz While it is not intended to here define a specific level of comercial self-sufficiency, it seems apparent that such level would, under condi- tions of average capital structure and financial condition, require traffic revenues yielding an average rate per total ton-mile approxhrating 121 percent of the calculated average operating expenses- rate. (Tables 3 and h) it expense of 13 cents per ton-mile, an average revenue rate of 52.03 cents would be required; at 50 cents, the average reve- nue rate requiremnt would be 60.5 cents; at Capital's expensefl- rate of 5h.13 cents, an average revenue rate of approximately 65.5 cents would be required (assuming in each case a condition of adequate net worth and a fleet of average mo- d81‘111t3’). As will be noted from Table 3, for the twelve- month period ended September 30, 19149, both Eastern and American approximately met the conditions of commercial self-sufficiency, as set forth above (assuring service mail-pay of 60 cents per mail ton-mile), although there was a spread of almost 9 cents in their commercial revenue per commercial ton-mile. While United and mm somewhat more than cleared their calculated total operating expenses, on the above terms, both would have fallen short of earning the calculated return on investment. Northwest would have required an average commercial rate of approximately 60 cents to have met this calculated measure of commercial self-sufficiency. 0n the basis of M's reported figures, it would have actually fallen short of this measure by the net amount its operating expense* and capital. charges exceede the calculated figure for these cost elements.— _.L ,1 RATES OF REVENUE 25 Capital would have required a total average revenue yield of 66 cents to have net its total normal requirements as here calculated. (Table 3) Its reported Operating Expense!- corresponied almost exactly with the value calculated by the standard equations. Its capital costs were less than typical because of the abmrmally low de- preciation and investment base represented by its largely depreciated fleet and generally sub- normal financial position. Assuming normalcy in these respects, however, and an average cem- mercial rate per commercial ton—mile of 60 cents rather than the 50.78 cents it actually experi- enced, Capital's total requirements for govern- ment financial aid would have been $3,203,999 or 83.13 per nail ton-mile, in order to tring its total average revenue to the 66-cent p’er-ton-mile— level of its total normal requirements. Capital's regular-tariff passenger traffic yielded revenue of 62.20 cents per ton—rile. This class of traf- fic, however, represented only 61.10 percent of its total. (Tables 7 ani 8) All values con- sidered, it seems reasonable to conclude that while Capital's requiremnts for government aid were partly attributable to its large proportion of low—tariff traffic, it was not, for the twelve months ended September 30, 19h9, in an inherently comercially self-sufficient position. All of the carriers less favorably situated than Capital, respecting traffic and service pat;- tern characteristics, were further down the scale from a level of inherent self-sufficiency under the terms here stated, for the twelve months ended September 30, 1919. Of these, Braniff, l/ Ammmmhsunudem;amaanamn;mainmneto fully analyze Northwest's plus-deviation of its reported from calculated operating Expenses, it seems probable that both M's out-of—line operating experses and its capital. charges are related to its extensive and costly fleet modernization program. l 7-. ._miml_—__l___..rm. T113136 Carrier (Ranked in order ANALYSIS OF EXPENSE-REM MARGIN OF DOMESTIC FEEDER AIR CARRIERS (Based on data for 12 months ended September 30, 19149) REPOR‘JED BASIS Reported Flight of total calcu- Reported Operating Expense Commercial Total Equipment De- Interest on lbtal lated torn-mile excludig Flight Equipment transportation MARGIN A transportation MARGDI B preciatlon and reported (Sum of, MARGIN C expenset) Depreciation and Rentals revenue (col. 3 - col. 3) revenue (col. 5 - col. 2) Rentals investment cols. 2.718l (col. 5 - col. 9) Carrier (27 (3) (LL) (5) (6) (7) TB) (9) (10) ms $1,089.0hh $ 216.903 3 ennui $1,201,703 3 112.659 3 93.162 3 5mm $1,236.8Le s $5.116 WIS ROB 987 .516 1420,7146 '567 :38 862.000 “1251316 92:91-11: - 525 1a 115285 “232.235 ROB mu 1s393J+85 M13515 '95-: 1.6881571 295.086 157 .707 .357 1.600.019 .522 MON Tn 2.129.757 500314-59 “1.629.293 20°5h-e777 “711-3980 155:851 511%1 2.516.819 '523072 m cm 11362.]14-8 1459-630 “902518 lobb01669 93.521 113.325 25.580 1:5014-a055 4153531!- ORA EM? 8314:1406 31-0 a 510 “523,896 961.569 127 : 163 72-795 51:61-17 958-81413 2.721 W WGA 1: 152,362 5’46: 169 £86,093 1: 178 a560 146.293 158.980 83.098 1,37%511’0 '1951730 W“- PDA 2:101:0’47 1.037 .921 45065-125 231871238 86.191 170.955 67,071 2.339.071 ‘151a335 FDA PAL 2.81+1.889 1:558:871 '1a235a013 3:536:21L8 LL9LLa559 229.919 90.8114 3: 162:622 173:6% PAL 3"“ 1.971- 167 1- 133:8814- ‘875a285 21h01am 1:50.055 309.717 89.:999 2570.835 50559 SWA W Commercial transportation Calculated metal Calculated Operating Expense Commercial revenue plus Flight Equipment Interest on (Sum of excluding Flight Equipment h‘ansportafion MARGIN A1 calculated mail MARGBJ Bl Depreciation calculated cola. MARC-IN 01 Depreciation and Rentels revenue (001.13 - col. 12) revenue** (001. 15 - 001. 12) and Rentals investnent 12,17,18) (col. 15 - 001. 19) (12) (13) (310 (157 (16) (17) (13) (19) ‘20) WIS 31.08636 3 215.903 3 431:0.615» $ 256.722 $ -829 821; $ 103 610 e 0 98h $1 2141,1140 e -98h.h18 ms Ron 967.205 Leonie 6116.169 1450.1;62 -B6:7h5 711899 30:55:; £079,612 £19,160 ROB MON 1570-105 Lil-£15145 “925: 558 1457. 412.662 138.559 66.170 15711-312 '1: 117 .571 MON TIA 1:759:625 500.1159 '1ne39:166 538,222 "1301.1403 200.701 89.927 2:050:25} 4.192.031 TTA GEL 1:577:116 h59a650 “917% 14351755 “893561 137:201 66-020 1580.537 '1o096.532 CEA Ell? 1:066:925 310.510 “75631415 322.380 William-i5 a 145.9” 1.197.196 “5714.616 RIP mm 1 156 71414 5’46 169 “610 575 551 979 '60hn765 93 672 50 313 1: 00 729 '7148 750 W03 Pm 2309L3017 1.0571921 4.0561096 1.0553621 4.038.396 2572336 1072215 2.336316% 4.3833027 m PAL 2085508141 13558187]- '192963970 1:612: 52,4- '1: 21151317 53141032 11463155 3353610% '137233502 PAL 5“ 1351.950 1.135.881} “818.0116 lamb '7871726 180,291; 90.199 2322;1423 '1:053n219 SWA t Operating Ebcpense data here exclude flight equipment depreciation Notes (continued): Column 7: From liable 28. Notes (continued): Column 17: Calculation is based on average and rentals. . Colunm 8: 6 percent on reported net investment relationship of fligmt equipment de- n Calculated mail revenue is based on 60 cents per mail ton-mile. after taxes at 38 percent. (see predation and renials expense to A0 lable 30.) Expense. (See Sd'xedule S and liable 28.) Notes: Column 2: From hble 2. Column 12: From Ihble 2. Colu'm 18: 6 percent on calculated net investnent Colmm 3: Reported revenue from passengers, excess baggage, Column 13: As reported. See column 3. after taxes at 38 percent.- (Cmputafi-On express, and freight. Column 15: Reported revenue from passengers, excess is based on general relafionship of Source: Recurrent Reports, C.A.B. baggage, express, and freight, plus mail Column 5: Commercial h-ensportafion revenue (column 3) plus revenue computed at 60 cents per mil reported mail revenue. ton-mile. Source: Recurrent Reports: C.A.B. Source: Tables 2, 28, 30. ( 26 ) investnent to operating expenses. See flhble 30.) It RELATION OF COST Delta, and Western/Inland are indicated as in position to have earned slightly more than suf- ficient to cover their operating Expense-x- but not enough to meet their total revenue require- rents. All others not specifically mentioned fell below even this level. The following figures for Eastern, united, and American, based on the calendar year 191:1, afford an interesting comparison with corre- sponding figures in Table 3: Cents per ton-mile Operating Expense Tomciel less Flight revenue per Equipment commercial Carrier Depreciation ton-mile Margin Eastern h8.33¢ 53.7819 s.us¢ United 51.56 51.11 -o.h5 American 116.71 52.37 5.66 Following are the total traffic ton-mile com- parisons for these carriers as between 19141 am the twelve months ended September 30, 1919: Cmier 19111-16 19149 Eastern 22,910,162 113,88h,902 United 31,623, 225 162,716,577 American m4, 05735013 189, 777, 377 if Passenger ton-miles are included at an average of 192 pounds per passenger-mile. The above ton-mile values are not wholly comparable with corresponding figures in Table 3 3 there was a large difference in dollar values as between the two periods; further, the 19,41 expense figures in- clude a small amount of flight equipment rentals expense, an item excluded from the figures for the later period. The relative margins are, however, generally comparable and seem extremely significant, particularly in view of the very large increase in traffic volume between the two periods. The conclusion seems inescapable that ELEMENTS TO CLASSES OF TRAFFIC AND RATES OF REVENUE 27 the' increase in traffic volume from 19141 has not been accompanied by proportionate progress toward commercial self-sufficiency and profitability. The problem emphasized by the above showing seems fundamental to' air transportation develop- ment ani rate regulation. Obviously, the most favorably situated carriers tend to set the rate and service patterns for their less favorably situated competitors. An optimm average revenue rate, which would appear to be not less than 60 cents per ton-mile for Capital and carriers of lesser traffic magnitude am density, might well represent an unreasonably high level for American. The latter's regular-tariff passengy/r traffic yielded 60.57 cents per ton-mile. Itts total com- mercial traffic yielded only 51.57 : :ents; yet its strong inherent position permitted this ava‘aang down of revenue per ton-mile and the retentiof of a small margin above total revenue reqwdrements. Its showing in this particular, however, was int impressive, in view of the fact that its inherent situation was the strongest of all carriers. During the past ten years there has been great expansion in the traffic and routes of the scheduled domestic air tramport system, accom- panied by a trend of increased total requirements for goverrmzent financial aid. The expansion has been accomplished partly by the extension of routes into areas not previously served, partly by establishing or increasing nmltiple—carrier services in areas already served, and partly by traffic increase consequent to g'owing public ac- ceptance of air transportation and by development of new classes of traffic. Assuming continued operation and development of scheduled air transportation in accord with the presently established principle of controlled com— petition under conditiom of government regulation and financial aid, the remedy for the unfavorable trend. here discussed—and one which is strongly supported by the general showing of the study here reported—would appear to be the merging of car- riers whose routes can be efficiently inteyated, particularly mergers of the strong and the weak, and the elimination of services which do not appear to be justified by either quantitative or qualitative values. TABLE 7 PERCENZmGE DIS RIBUTION OF REDUCED-FARE AND OCIHER PASSENGER TRAFFIC AND OEIBER CLASSES 0F {IRAFFIC Domestic flrunks and Feeders (12 months ended September 50, 1914.9) Carrier Passenger ton-miles \/- (Ranked in order of total 111121 51:81 excluding . calculated ton-mile traffic coach- and Coach and Excess baggage Express Fre1ght Mail expense!) ton-miles {natal famil fare fami -fare ton-miles ton-mles ton-mles ton-gulls; Carrier (1) (57 (35 (£5 (3) “('7“7 ‘TT—e "TT"‘9 T‘y—m F-ERS ms 100.00% 91.00% 91.00X - fl 0.1.67g 1.4.6: - X 1..081 was 1108 100.00 911.27 92.13 2.11. 0.21 - 2.72 2.80 R0113: 11011 100.00 81..15 82.59 1. 0.1.0 2.27 10.07 3.11 M0 111 100.00 90.97 90.57 0 0 0.29 1.611 1.31 5.79 111 081 100.00 811.17 82.31. 1.83 0.1.8 3.52 7.38 . 1.4.5 on m 100.00 98.92 91.85 3.07 ' 0.1.2 1.78 - 2.88 EMP 1101 100.00 97.31. 97.31. - 0.20 1.36 - 1.10 1101 PDA . 100.00 92.71. 89.03 3.71 0.72 1.97 2.86 1.71 P01 P11. 100.00 93.35 92.28 1.07 0.1.9 0.95 2.21 3.00 P11. sm 100.00 91.97 86.82 5.15 0.28 1.51. 3.96 2.25 sw1 mums m 100.00 51. 88.27 5.27 0 29 1.38 3.35 1.1.1. 11111 COL 100.00 95:02 911.02 - 0:71 1.18 2.18 1.91 001. CONT 100.00 89.91 82.96 6.95 0.70 1.1.0 1..97 3.02 com 1101 100.00 91.18 80.57 6.61 0.75 1.91 3.09 3.07 1101 NAL 100.00 85.97 85.9] " 107).]. 39a 6008 2099 HAL 0&8 100.00 85.1.0 85.1.0 - 0.82 1..1.1. 1..88 1.1.6 0&3 w/I 100.00 89.70 87.66 2.01. 0.62 2.29 3.98 3.1.1 11/1 011. 100.00 80.56 81..36 - 1.01. 3.12 7.52 3.96 01L BNF 100.00 86.00 83.75 2.25 0.60 3.65 5.02 1.673 BNF 012 100.00 77.37 61.10 16.27 0.1.5 3.86 15.91. 2.38 011> mu 100.00 80.92 62.53 18.39 0.70 3.62 9.39 .37 NM EAL 100.00 83.96 83.92 0.01. 1.35 3.12 7.31 28 EAL 011 100.00 76.78 66.1.3 10.35 0.88 11.39 10.11 7.81. m1 011. 100.00 71..93 67.71. 7.19 0.71. 3.95 10.02 6.36 U11. 111. 100.00 76.02 67.56 8.1.6 0.92 2.80 15.1.8 1..78 11L :1- Excluding flight equipment depreciation and rentals. Notes (continued): (2) Owing to lack of adequate , Notes (continue d); (3) For the feeders, the average . . information, promotional— proportion of mail ton-miles to Notes: (1) Data cover-mg coach- and manly-fare . fare passenger ton-miles. total traffic ton-miles was 3.12 passenger-traffic (column 5) were obtamed other than coach- and fmnily- percent; for the trunk, [“00 from spec1a1 reports of the earners to fare traffic, are included in percent. the range, for feeders, the 0.1.3. In some instances, owzmg to the totals in column I“ was from 1.10 to 5.79 percent; lack of full reporting for the period, it was necessary to estimate some portion of :2:°::;nks, from 101111. to 70311 reduced-fare traffic. / . Source: Based on Tnblee 26 and 35. (28) TABLE 8 TON-MIIIE RATES OF CGMERCIAL TRMSPORTATION REVENUES BY CLASS FOR THE DMSTIC AIR CARRIERS Distribution of Ton-Mile Rates: Scheduled and Nonscheduled Reduced-Fare and other Passenger Excess Baggage anaress Freight (12 morrths ended September 30, 19119) Total comer— Scheduled operations Carrier cial transporta- Passenger / (Ranked in order of total tion revenue per Totfi excluding calculated ton-mile commercial coach— and Coach— and Nonscheduled expensete) ton—mile Total Total f ‘ —fare fami -fare Excess be e W Frei ht o ations Carrier (1) (55 (35 (55 (55 (75 (9? (r1765 (11) FEEDERS WIS 58.0h¢ 58.0h¢ S8.82¢ 58.82;! - ,d 75.09¢ h0.3h¢ .. ¢ .. ¢ W13 ROB 7h.9l 75 .19 75.98 NA NA 88.16 - h7.38 1.9.82 ROB MON 53.39 52.119 56.17 56.111 143.23 709111: 110.38 23.71: NA MON TTA 118.85 118.83 11.8.99 119.06 32.15 33.57 33-h? 119.26 65.55 Tm cm 53.22 53.35 56.56 56.90 1.1.59 63.67 37.11 23.91; 32.27 cm mP M4070 (411036 M057 M4093 314028 53036 31007 "' 516083 mp WCA 62.62 62.115 62.57 62.57 - 70.79 52.78 - 85.31; WGL Pm 61.07 60.97 62.50 63.03 h9.7h 66.03 33.16 29.53 90.115 Pm PAL 53.93 51-1019 5,4089 55005 (41014-8 6908,4- 36058 29062 112022 PAL Sim 51.72 51.65 52.26 , 53.02 39.61; 56.68 11.67 10.03 55.67 SWA TRUNKS NEA 66.08 66.11 67.141 68.27 53.08 100.37 hho77 35.66 51.30 NEE COL 63098 63299 611069 614069 " 68006 39078 111-1032 62.25 COL CONT 55080 55088 570921 59.19 (430112 57067 38068 211.110 53006 CONT MCA 59.16 59.119 61.15 62.68 171.75 61.29 35.56 25.18 53.81. mm 1m. 60.21; 60.73 611.20 68.20 - 68.115 26.77 , 22.1.8 7.21 m. 685 58.85 58079 61095 61095 "' 78039 33061 23023 79015 035 W/I 59.51 61.011 63.16 63.90 85.57 68.55 33.09 25.20 32.55 8/: m 58.57 58.61 62.92 62.92 - 63.110 30.39 21.31; 33.30 DAL BNF 57019 57-16 60.10 60053- (45012 79052 31078 23001 59092 BNF GAP 50,78 51.18 57.91; 62020 142.50 55.116 32.614 21.91: 38-08 CAP 1m 52.55 52.60 56.96 61.33 82.18 511.15 3h.58 22.1.1 143422 NM EAL 60.h3 60.62 6h.B6 61;.86 10.29 6h.51 35.51 19.73 23.87 1m. m 53.95 511.05 59.91 62.32 hh.67 60.75 33.55 18.32 83.22 1m HAL 51.91; 51-95 59.18 60.116 147.26 63.11; 33.03 18.07 51.36 ULI- MI. 51.57 53459 58.81; 60.57 145.15 55.79 38.67 18.81; 113.80 ML * Excluding flight equipnent depreciation and rentals. Notes: (1) Data covering coach- and family-fare passenger Notes (continued): (2) Owing to lack of adequate information, revenue (column 6) were obtained from special promotional—fare passenger revenues, NA - Not available. reports of the carriers to the C.A.B. In some other than coach— and famly-fare, are . instances, owing to lack of full reporting for included in totals in column 5. the period, it was necessary to estimate some portion of reduced-fare revenue and traffic. Source: Based on Tables 26 and 27. (29) TABLE 9 CQIPARATIVE CALCULATED OPERATING EXPENSES‘ 0F EASTERN AND NORTHEAST AS TWO SINGLE DmESTIC SYSTBAS AND AS A CONSOLIDATED SYSTBI Based on: (i) Squetions '1' through 'b' for the eelouletion of totel Opereting Expense excluding flight equipment deprecietion end rentels (for the 12 months ended September 30, 19119) (2) Consclidetion ct EAL end NBA trsffic, including, for ton-origineted end ton-mile treffie dete, certein edJustmente beeed on estimted chenges in treftic volume resulting from cpcretion of the cmsolideted route pettern Consolidetcd e stem Totel Traffic ——F.t%€fir' Line Description EAL m EAL end “he Ad uetments Totel ein T2) (3) (157 (5) (5) (7) (8) FACTORS 1 'l‘reffic tens criynetcd 2.2.691: 32.650 275.3111. 6535/ 2711.791 2 Truffle tom-miles 113.8%,902 6,200,h68 120,055,370 208,h68-/ 120,293,836 3 Trefl‘io tons lifted 6117.993 70.851 718.8111. 1.9h13/ 720,785 b Plene miles 52,307,611; 3.517.960 56.125571: 56.125. 571% 5 Plene depertures 297.639 143.601 301.2”) 3111.940 6 Heula Averege length of treftic heul (miles) 1469.3 189.9 xxx 1137.8 7 Flight: Averege interstetion flight distence (miles) 175.7 87.6 xxx 1611.5 8 Retic or [—Tjfingggzfiw 2.67 2.17 xxx 2.62 9 Adjusted treffie tons: (Tons - 11.325) 238.569 28,325 266,691; 270.1166 10 Rete per edjusted treffic ton-mile (6&1 Expense) 26.67% 29-11% In 26.2111 RXPBISE AND REVENUE Gel Bxpense 11 W A: Equetion "1" 829,531.,609 31.5%.1116 331,1118355 831,070,666 0 5148.209 12 Component 3. Bquetion "2" 1.511.111 1,359,220 2,873,631 1,516,8h6 1,356,785 13 Totel 31.309320 2.915.366 30.292556 52.557.512 1.705.070 A0 3 ones. 1); Component A: Bquetion '3' 13,131,8111 9116.718 111,098, 559 13,810,691 287,866 15 Port 1 (Ton-mile clement) 12,193,171. 680,191 13,173,365 15,196,231. ~22,669 16 me 2 (man element) 658,667 266,527 925,191. 6111.157 310,737 17 Cmponent a. Equetion "h“ 11,851,1168 1,05,161. 12,901.,632 12,935,928 -31,296 15 ““1 25. 003. 309 1 .999. 552 27. 003. 191 26. 71:6. 619 256. 572 19 T011“ eelculeted °P°flt1n5 33PM“ 56.352529 (4.953.248 61.295.777 59.35hdll 1.961.606 20 Cinereiel trensportetion revenue (reported) plus nmil revenue celculeted et 60 cents rill tan-mil. 68,796,972 14,092,016 72,888,990 73,018,360 129,370 21 llfizmté urge .12,M;L,U.13 9 -851,230 .11,$3,2l3 313,6815229 32,091,016 22 Totel celculeted reting se' or treffie ton-mile h9ck5¢ 79.72% 51.01;! 119.32% 23 Tote! eeIeuleta grenschfiggon revenue per treTHe ton-mile 60.141¢ 66.00]! 60.707t 60.70! 2)., Wmerofel treneportetfen revenue per comeroiel Won-mile 60.15351 66.08% 60.73/ 60.73% t Opereting Expense dete here exclude flight equipment deprecietion end rentels. 2/ Estimeted decreese in tone orgineted: The sum of pessengers inter- chenged between fiend EAL dmng the two months of lurch end September 19119 wee 889 (beeed on rantings shown in the Airline Treffie Survey, March 1919, September 191.9: C.A.B.). The two cerricrs reported I combined totel of 1,142,173 revenue pessengere during lurch end September 1919 (Recurrent Reports, C.A.B.), the 689 interchenged pessengere ere dupliceted, therefore, in the reported totel of the two eerriers' tons originetcd. 0f the two-month totel 01‘ 11,42,173 peeeengers, the 889 pessengcrs represent 0.201 percent. It is here euumcd thet, on e oonsolideted system, (1) such peesengers previously routed vie the two cerricre would be routed vie the ccnsclideted eerrier end would therefore be reported only once so treffic originated, end (2) both pessengers end other clesscs of treffic would heve been roughly proportionete on en interchange besis. (In thie connection, it is noted thet for the 12-month period ended September 30, 19119, mu pessenger tons origineted emounted to 93 percent of its totel tens origineted‘ ELL's reletive pereentege wes 86; end in the com- bined totels of these too eerriers, peesenger tons represented 87 percent of the totel.) In order, that, to estiute the totel volume of undupliceted tonnege origineted on the cmsolideted system, the percentage of 0.201 is epplicd to the sum of the two cerricrs' reported tms origneted—275,3hh, resulting in en sstimeted deereese of 59 tons. b Betimeted increese in ton-miles: For the two months of lurch end Septe er , e ote o , pessenger-miles end 1,151 pessengers ere represented in the routinge (shown in the Airline Treffio Survey reports) of peeeengers treveling between NEA end EAL etetione, vie m end other csrricrs which elso served the ELL-served stations. Assuming thet ell such Mother-carrier Journeys would be routed henceforth vie the consolideted carrier, the increese in pessonger-miles would be 0.1736 percent, beeed on the relation between the 332,169 peseenger-miles referred to ebove, end the totel of 191,333,000 pessenger-miles es reported by we end EAL for the two months (Recurrent Reports). It is further essumed thet, on e con- sclidetcd syetqn, both pessengcre end other cleescs of treffio would move roughly in proportion. In order, then, to estismte the volume of edditionel ton-miles thet would be cerricd, the percentage of 0.1736 is epplicd to the sum of the two oerricrs' reported ton-milcs--l20,085,370 es shown ebove, resulting in en inoreeec of 208,168 ton-miles. (late: In estimeting totel pessengeh-miles which moved over Mother—cerrier routings, end which, on e coneolideted-oerrier besie, could be essumd es treffio for the consoli- deted oerrier, stetions on EAL which would involve. unrsesonebly circuitous routings were not included.) 3/ Procedure in ”tin-ting edditionel tone lifted: (l) Beeed on the lurch end September 1919 Airline Treffic Survey reports, e totel of 2,010 peesengers trevelsd vie ell-terrier routinge between we end 311. steticns (not including those trips involving unrsessnebly eireuitoue routings). Of this totel, 889 pessengere were routed vie NBA end EAL. and 1,151 vie m end other carriers. Assuming that the 1,151 passengers referred to would meke their full Journeys over th consolidated system, thet volume of pes- eonger traffic would then rcpres ‘t on additional volume of tone lifted. (2) The total revenue peseengers reported by EAL end REA for the two months of Merch end September 1919 win 11132. 173, representing 17.116 percent of their combined total of 2,532,1185 reported for the your 1919. (30) Notes: Generel--3quetims: Equetion 'l' [29.88/ - (0.0000132381) (Tens 61-151mm] [Tone - 11,325] [Beul] Equetion '2' [1%] [Tons origineted] Equetiom '3' [10.97% (Ton-anon] plus [$1,h03.51 (Elul)] Equetion 'h' Tons lifted [36.85 (Tons origineted) (Retic of one o mete >2] Colums 3 end 1;: The dete in colume 3 end I; cover the 12—month period ended September 30, 191.9. The expense figures ere eelculeted totels beeed on the equetions presented in this report. Revenue figures ere teken from Teblee 3 end 5 . Column 5: Sum of colums 3 end 1; unless the item is e unit or weighted figure computed from beeio dete in column 5. Column 6: (See footnotes y, y, _e/) Column 7: Lines 1-3 inclusive, ere the sum of columns 5 end 6. Lines ’4, 5, 23, end 211 Are identical with date in column 5. other items are computed from the beeic rectors shown end from the equetions. Ton-miles Line 6' Tens oFIEIneted Plene miles Line 7' [Plene depefiures Tone lifted Line 8‘ [one or an e] Line 10. [29.68/ - (o.oooo1323e¢) (Tons origineted)] Line 20: From Teble 5 , tor colums 3 end )4. Tetel in colon: 7 is beeed on coneolidetcd-eystem ton-miles (line 2) end the 60.70-esnt weighted revenue rete (line 23, column 5). Line 19 + line 2. See else Tebls 3 for ton-mile retes shown in column 3 end i. ebove. Line 20 +linc 2. See else Teble 3 for ton-mile retes shown in columns 3 end I. ebove. Comerciel trensportetion revenue per comeroiel ton-mile. es shown for EAL end an in columns 3 end I; ebove (from Table 3). The 60.73-oent rete shown in colums 5 end 7 is the weighted rete beeed on combined EAL end use dete. Line 22. Line 23: Line flu y (cmtinued) (3) Based on the totel of 1,151 additional full-Journey pes- sengcrs estimated for the two—month period, end the proportion of 17.1.6 percent borne by the two months to the year totel, it is estiuted that 6, $2 edditionel passengers would meke their full Journeys over the con- eolideted system during e 12-month period. At an evcrege of 192 pounds per pessenger, it is cetinted that 633 pesscngcr tons would thus be cerried. (ll) Beecd on dete used in this report (see Table 35) peeeengcr tons originated represent in totel for the EAL end NBA systems 87.08 percent of their totel tons origineted. Assuming thet, on e emsolideted system, both peseengere end other olesses of trefi‘io would move roughly in pro- portion, the totel estimete is 727 tons origneted (633 divided by 0.8708). (5) Assuming thet the EAL retio of tons lifted to to‘ns originsted, 2.67, would be reeeoneble to spply to the estimete of edditionel full-Journey truffle cerricd to its destinetion on the consolideted system, the 727 tons orianeted represent 1,9141 edditionel tons lifted. Source: Passenger origination-destination date (Merch and September 1919) for the traffic adjustments shown in column 6 were harnished by D. I. Blueetone, Analyses Division, Bureau of Economic Regulation, C. A. B. APPLICATION OF APPLICATION OF EQUATIOhB T0 WES OF ROUTE PATTERN REVISIOI‘S Consolidation offers remedy for notably uneconomic routes. General. Cons ideratiom The correlations here presented indicate that the probable financial results of mergers am other route pattern revisions are reasonably calculable on a "before and after" basis by application of the standard equations. That is to say, the money difference between (1) the sum of the equation values applied separately to the traffic and. serv- ice pattern characteristics of twa carriers it is proposed to merge and (2) the total value de- rived from applying the equations to the consoli- dated traffic and service pattern characteristics of such carriers, should closely approxinate the savings to be expected from the merger. Or, in the case of elimination of stations or routes, similar results should be obtained on a calculated "before and after“ basis. Careful analyses of estimated traffic changes are necessary before applying the equations. The merger of carriers which interchange traffic Would have the effect of reducing tons of traffic origi- nated to the extent of the duplication represented by such interchange traffic, of increasing average traffic haul, of reducing number of stations, etc. It cannot be too strongly emphasized, however, that any assumed traffic increase should be pains- takingly estimated and checked to insure that perti- nent characteristics are realistic. The equations automatically allow for factors of change other than those which are given weight by the equations. They provide expense estimates in terns of average experience rather than in "optimistic" terns. Note that the above-outlined procedure takes no account of possible deviations of the reported figures from the equation values for the carriers EQUATIONS TO EXAMPLES OF ROUTE PATTERN involved in a contemplated route pattern change. Such refinement would seem both impracticable and unnecessary since the problem involves only a de- termination of the differential in two sets of estimated costs. It is not to be assumed that merger or other route revision would in itself either reduce or increase rates of deviation of the carrier or carriers involved in the route pattern change. Tests of the probable effect of remedial ac- tion which might be taken respecting notably uneco- nomic route systems indicate total discontinuance or merger as the courses offering the possibility for the most substantial savings. Discontinuance of service to certain stations of very light traf- fic also offers opportunity for a degree of saving, but less, perhaps, than might be expected. As previously remarked, a principal portion of the "burden” expense of the carrier experiencing very light traffic is incurred by its headquarters establishment. This burden is but little affected by the number of stations operated. Further, if the stations to be discontimled are intermediate to terminals and reasonably directly enroute, such discontinuance could have but relatively minor effect on total aircraft operating expens , and savings would be offset, of course, by the loss of revenue caused by discontinuance. The carriers represented in this report are, with the exception of Western/Inland, all single corporate entities developed and operated as such for a period of many years. Western acquired Inland in.the fall of l9h3, and, it is to be pre- sumed that, by the fall of l9h8, the process of integrating the two carriers was complete and their joint Operation for the twelve months ended September 30, 191:,9, reflected the economies of single-carrier operation. (Operating Expenses as reported by Western/Inland for the period deviates from the sum of the equation values by only 0.25 percent.) It seems obvious, however, that a period of integration would in every case be necessary before the economic advantages of merged operations REVISIONS 31 would be fully reflected in financial results, and that such advantages could only be realized as the result of drastic action on the part of management to reduce executive, headquarters, and other burden expenses to the dimensions of efficient single-carrier requirements. An actual merger project would, of course, involve use of comprehensive traffic data, from the interested carriers' records, as the basis of traffic factor estimates, rather than the limited samples drawn from the Board's semiannual air traffic surveys here used. Comprehensive records would also be developed as the result of formal proceedings before the Board. These considerations should be borne in mind in con- nection with the examples presented below; the purpose here is to illustrate the use of the equations rather than development of thorough- going analyses. The number of illustrations has been lindted to the minirmnn deemed necessary for illustrative purposes. The possibilities for combination and change afforded by the domestic air service pattern are, of course, almost in- finiteo Following are five examples of the applica- tion of the equations to assumed route pattern revisions. These examples are selected with an eye to variety and because they involve only minor preliminary analysis of basic traffic data. They do not, of course, represent proposals or suggestions for route pattern changes: (1) Merger of Eastern and Northeast (2) Merger of Mid-Continent and Continental (3) Merger of Monarch and Challenger (h) Elimination of Five Shall Stations by Western/Inland (5) E]infi.na‘bion of Five Shall Stations by Pioneer Merger c'.‘ Eastern and Northeast It is not the purpose here to discuss the possible advantages or disadvantages of a merger TABLE 10 COMPARATIVE CALCUIATED OPERATING HPENSE" 0F (XJHTINKNCI‘AL AND LED—CONTNENT AS TWO SINGLE DOMESTIC SYSTEMS AND AS A WNSOLIDA’ED SYSTEM heed on: (1) Equations I'1" through "L," for the calculation of‘ total Operating Expense excluding flight etiuipment depreciation and rentals (for file 12 months ended September 30, 19119) (2) Consolidation of com and 110A traffic, including, for ton-originated and ton-mile traffic data, certain adjustments based on estimated changes in traffic volume resulting from operation of the consolidated route pattern Consolidated system Natal Wfic Potentia Line Description CONT HGA CONT and M01 Adjustments ‘lbhl gain ' (I) (2) (3) (14) (5) (6) (7) (8) FAG lOFS Notes x Generalm-Equati one : 1 n-effio tons originated 6 £3,251 $311.95? $5.911 569; 221.1181: Euation "1" 2 n-effic ton-miles . . 9 10 152.907 17 9.756 776.758 18. .5 _ _ 5 Traffic tons lifted 146.157 70.2611 116.701 .9614-‘3/ 120.665 [29.88% (“00001323”) ”b” wimudfl [m “325]le ’4 Plan. 3111-03 5:798-7h9 Bel-$251958 flag-1.707 Ilka-10707 nation "2|! 5 Plans departues 33.1176 56.0519 911.995 911.995 L” 31’5’42’287 ] ibns cri inated 6 Haul: Average length of traffic haul (miles) 369.1 299.0 m 3311.6 ‘Ibns $ HJIOO [ 5 :l 7 Flight: Average interstation flight distance (miles) 150.7 1119.1 m 1119.7 " ” 8 Ratio of [711%] 2.15 2.01 2.16 2.21 m}— [10.97¢(1bn-oilee)] plus [$1103.51 (noun 9 Adjusted traffic tons: (Tons - 1.325) 11.629 50.6 2 15,261 50,155 Equation "1" 10 Rate per adjusted traffic ton-mile (6&1 Expense) 29.6356 29.22;! xxx 29.16;! \ [$6.85 (Tons originated) (Ratio of ions lifted )2 ] EXPENSE AND REVENUE or g Gil ense Columns 3 sand in 'me data in columns 3 audit cover the 12-month period 11 meat 1: Equation :1: s 1.600.019 $2,691,580 s 1.291.637 cs 1.095.525 e 696.538 123::ozpfit‘tliitiihis.fizznfai‘ifizi.i’°e°::§:i‘fizguzzm 12 Component B: Equation 2 1,251,722 1,369,965 2,622., 7 1, ,831 1,19h,856 13 M01 2 851 771 1 061 553 6 916 321 6 320 556 595 968 m “1”“ m“ “I“ 3 ”“1 5 ' ’ ’ ’ ’ ° ' ' ' ’ Column 5: Sum of columns 3 and )4 unless the item is a weighted figure A0 E ense’ c0 comgutedsfrom basic data in column 5. 111 women A: Equation '3" 1’265’590 1‘566‘533 2'851‘925 2,L|b9,063 362’860 001$ 7; merigzniglugwg/dres/ihe sum of columns 5 and 6. Lines 1;, 15 Part 1 (Ton-mile element) 767.551 1. a 1091110238 1199911” '85'211 5 25 a. are identical with data in column 5 Other items are 16 Part 2 (Haul element) 518’036 1419’6'1‘9 937’685 “9’61“ “8’0“” 0’ uted from the basic factors shown and from.the equations 17 comI’Qnflnt B3 Equfition ")4" 7791328 %7J429 1171060757 118261687 "790930 omp Chm-miles . 18 101:1 2.061.918 2.535.680 1.598.680 1.295.750 302.930 Line 6: [ mg mg ,6 ] 19 Jbtal calculated Operatigg Expense: 1,916,659 6,598,315 . 11,515,001 10,616,106 898,898 Lin. 7, [M] 20 mercial transportation revenue (reported) plus mail revenue calculated P1393 departures at 60 cents per mil ton-mile 3,913,383 6,216,189 10,129,572 10,580,191 150,919 1bns lifted 21 Estimated margin $4,003,306 $5 -382,126 $4,585,132 $ -35,615 81,519,817 Lin" 3* W 22 'Jbtal calculated Operating kpense“ per traffic ton-mile 70.27;! 65.12;! 65.9% 58.25; 11110 10: [29-88% - (0-000013238¢) (Tons originatedfl 23 flbtal caclulnted transportation revenue per traffic ton-mile 55.9356 59.117}! 58.05% 58.05;! - Line 20: From Mle 5 , for colums 3 and 14.. Total in column 7 is based Commercial transportation revenue per ccnmercial ton-mile 55.80¢ 59.115)! 57.99¢ 57.99;! on consolidated-system ton-miles (line 2) and the 58.05-cent weighted revenue rate (line 23, column 5). # Operating Expense data here exclude flight equipment depreciation and rentals. above, assumed to be additional traffic resulting from "new" consolidated-system Line a: Line 19 ‘1 line 2. see also liable 3 for ton-mile rates shown interstation combinations, and (2) the onward journey; of 1,221.; passengers shown in columns 3 and )4 above. Estimated increase in tons originated: ’Itro adjustnen‘bs are included by the Survey routings to have traveled partially via. map. or COM and partially Line 23: Line 20 {- linc 2. See also ihble 3 for ton-mile rates sham in e estfinate of traffic tons increase: one, a decrease based on inter- via another carrier also serving MCA and com stations. Assuming all such in columns 3 and L; above. change traffic; the second, an increase based on the assumption of gain in Journeys routed henceforth via the consolidated carrier, the estimated increase Line 21;: Commercial transportation revenue per commercial ton—mile, as traffic from "m” consolidated-system interstation combinations served also in passenger-miles would be 14.14.5111 percent, based on the relation between the shown far MCA and CONT in columns 3 and )4 above (from 1hble3 ). by other carriers. Procedure in developing the estimate of net traffic tons 1,293,149.]. passenger-miles, referred to above, and the total of 29,057,000 pas- 'Ihe 57.99-cent rate shown in columns 5 and 7 is the weighted increase is as follows: (1) 111a sum of passengers interchanged between 1ch senger-niles as reported by MCA and (”NT for the two months (Recurrent Reports). rate based on combined Mud and (”NT data. and (XJNT during the two months of March and September 1919 was 898 (based on It is further seemed that, on a consolidated system, both passengers and other roufln s shown in the Airline h‘affic Survey, March 1919, September 191.19: classes of traffic would move rouglly in proportion. In order, than to estimate C.A. 3.), and anus represent a duplicated count in the total for the two fine volume of additional ton-miles that would be carried, the percentage of carriers' tons originated. (2) Slhe sum of passengers estimated as additional 11.14. 111 is a plied to the sum of the two carriers' reported 1n'affic ton-niles— 3/ (continued) Assuming that, on a consolidated system, both passengers and traffic which would result from "new" consolidated—system interstation 17, 9,756 column 5 above). resulting in an increase 01‘ 776.758 tom-miles, other classes of traffic would move rouglly in proportion, the total combinations which would be competitive with other carriers, is 1,858 traffic estimate in this connection is 1,835 tans originated (1,681, (Airline ilk-affic Survey rantings). (3) lbs net increase in passengers is o Procedure in estimating additional tons lifted: (1) As referred to divided by 0.9178). (5) Assuming- that the weighted ratio of 2.16 of tons then estimated at 960. (h) 'Jhe tire carriers reported a combide total of in b above, a total of 3,082 addiflonEi passenger journeys are estimated as lifted to tons originated (computed by dividing 116,701 tons lifted by 90,899 revenue passengers during March and September 1911.9 (Recurrent Reports, accruing to the consolidated system during March and September 1919. (2) Ibtal 53,911 tons criginateduthe sums for the two carriers, column 5) would be C.A.B.)3 of this total, the 960 passengers referred to in (3) above represent revenue passengers reported by MCA and CONT for the two months of March and reasonable to apply to the “mtg of additional traffic over the 1.0561 percent. In order, then, to estimate the total volume of unduplioated September was 90,899, representing 17.57 percent of their combined total of. consolidated system, the 1,835 tons originated represent 3,9614 additional tonnage originated on the consolidated system (assuming passengers and other 517,212 reported for fine year 1949. (3) Based on the total of 3,082 additional tons lift-3d. classes of traffic in approximate proportions), the percentage of 1.0561 is passenger journeys (both new" and onward journeys) estimated for the two-month applied to the sum of the 12m oarriers’ reported tons originated—53,911, period, and the proportion of 17.57 percent borne by the two months to the year resulting in an estimated increase of 569 tons. total, it is estimated that 17,941 additional passenger journeys would be made . a, over the consolidated system during the 12-1monfil period. At an average of 192 y hmud mum" 1;; “mile“ F" a" m mm” °f “‘"h and pounds Per passenger. it is estimated that 1.6811 Passenger tons muld thus be Source Passen er ori inafion-desunation data (March d s tombe 191, ) September 1%9 (from the lirllne 'h'affic Survey reports) a total of 1 293,119., : g 5 . an ep :- 9 . . ' cmiod- (11) Based on data used in this report (see Table 35). passenger mm for the traffic adaushnents shown in column 6 f rni had passenger-miles represent: the “1511301131 701“!” from 3.052 “(11110331 PS” originated represent in total for the MCA and CONT systems 91.78 percent of D W B Ann 1) wer: u s senger Journeys, filat is, (a) the estimated 1,858 passengers, referred to their total tons originated. ggulationmecarfi' lyaes ivision, Eireau of conomic , . . (32) 1 l’ 1‘ APPL lCATlOf‘1 OF between Eastern and Northeast but , rather, to show its indicated effect, based on the equation standards, upon operating expenses* and commercial transportation revenues. Table 9 is presented for this purpose. The net gain in the consolidated profit margin as calculated for the twelve months ended September 30, 1919, is $2,091,016. This estimted gain is made, up of calculated savings in direct Aircraft Operating Expense:- of $256,572, Ground and Indirect Manse $1,705,071» and operating revenue increase of $129,370. The calculated changes in expense and revenue, as well as the modifications of traf- fic ani service pattern characteristics responsible for such changes, are shown on Table 9. The fonowirg interesting result is obtained by applying the rough test of commercial self- sufficiency, described in the previous section, to the consolidated figures of the two carriers used in this example: Estimates of Per—ToxHiile Financial Operating Results for Separately Operated Carriers Compared with such Estimates for Consolidated System 121% of Connercial calculated revenue plus Operating 60¢. per nail Description Expensex- ton-mile Eastern, separately 59.8% 60.h1¢ Northeast, separately 96.157 66.00 is calculated for consolidated system 59.68 60.70 Attention is directed to the fact that for the twelve months ended September 30, 191;,9, Eastern's reported Operating Meme-x- exceeded the values calculated by the equations by 2.25 percent 3 the excess for Northeast was —0.02 percent. (Table l) The reason for Eastern's excess is not determinable on basis of data available. Its weight load fac- tor was the lowest of the “Big Four," and its daily equipment utilization the highest. (See EQUATIONS TO EXAMPLES OF ROUTE PATTERN REVISIONS Table 36 and the Recurrent Reports.) Eastern's plus—deviation, however, is not regarded as perti- nent to the merger estimates. Under terms pre- viously defined, Eastern falls within the com- mercially self-sufficient group of carriers. Its average rate of comercial revenue was higher than such rates for others of the "Big Four," princi- pally owing to its smaller proportion of low- *yield traffic. Northeast's average commercial revenue rate was substantially higher than Eastern's. (Table 8) Merger of Mid—Continent and Continental The basic data, calculatiom, and estimated financial results respecting this example are shown on Table 10. The net financial benefit in— dicated for the projected consolidation is $1,316, 817, comprising $302, 930 Aircraft Operating Expenses, $595,968 Ground and Indirect Expense, and gain in revenue of $160, 919. It is assumed that the merger would have resulted in certain minor traffic increases, as estimated on Table 10. The effect upon calculated ton-mile Operating Expense* is a reduction, from 70.27 cents for Continental and 63.12 cents for Mid—Continent, to 58.25 cents for the consolidated operation. The two carriers used for this example are among the smaller trunks. While serving comnon terminals at Kansas City and Tulsa, they are not competitive. Mid-Continent's reported Operating Expense* for the twelve months erded Septanber 30, 1919, was 3.63 percent lower than the sum of its equation values, a circumstance which cannot be adequately analyzed on the basis of data available. Mid-Continent is the only trunkline whose reported expenses were less than the equation values by more than 1 percent. Continental's reported Operating Expense* coincided with the equation values. The indicated saving of Operating Expenses, although less than in tin consolidated-systen example of Eastern and Northeast, is 7.81 percent of the combined calculated Operating Eiqaensex- 33 of the two carriers, and sufficient in amount to lower the ton-mile Operating Expenseié rate for the consolidated operation to the approximate level of the average rate of commercial revemie; however, it is not sufficient to provide a margin to cover flight equipment depreciation and earn— ings on investment. Merger of Monarch and Challenger Monarch, Challenger, and Arizona Airways have already merged. The latter carrier was not in operation during the twelve months ended September 30, l9h9. The consolidated figures shown on Table 11 include, therefore, data re- lating only to Monarch and Challenger. Because of the highly local character of the Monarch-Challenger traffic, a circumstance common to feeders, no adjustment is made here for inter- change traffic. As indicated by Table ll, the savings which would have resulted from the merger of Monarch and Challenger during the twelve months ended September 30, 1919, are estimated at $518,053, comprising 3361,1161; in Aircraft Operating Expense* and $166,589 in Grourd ard Indirect Ex- pense. It seems reasonable to conclude that the three carriers involved in the merger would have cost a total of approximately $1,000,000 more to operate separately than as a consolidated car- rier for the Welve-month period ended September 30, 19119; the feeder equation standards indicate a minimm saving of $156,589 on account of the inclusion of Arizona in the merger as distinguished from its operation as a separate carrier. The combined traffic of Monarch and Challenger for the twelve months ended September 30, mm, was 6,677 tons originated and 1,757,359 ton-miles. This compares with 10,769 tons originated ani 2, 979.9149 ton-miles for Pioneer. Southwest's tons originated were 12,296 and its ton-miles 2,216,016. In view of the fact that the minimum: per carrier of $166,589 C&I burden applies to feeders having traffic greater than would be repre- sented by the Monarch-Challenger-Arizona combine.- tion, such combination falls within the demonstrated TABLE 11 CCIPARATIVE CALCULATED OPERATING EXPENSBS* 0F CHALLHWGER AND IONARCH AS 'rwo SINGLE DOLESTIC SYSTEMS AND AS A CONSOLIDATED SYSTE Besed cm (1) Bquetions ”1" through '14" for the celculetion of total Opereting Expense excluding flight equipment deprecietion end nentels (for the 12 months ended September 30, 19149) (2) Consolidstion of CEA end non traffic end opereting dete, including edjustnent in number of stetims operetsd. Conselideted s stem Totel Renae! 0 Operating Expense dete here exclude flight equipment depreciation end rentals. 5/ Both of the stetions Denver end Selt Leke City ere served by CHA end MON; the stetion count of eech cerrier includes those two Line Desefiption ORA ION ORA end I0! Adjustments Totel sin (I) (2} Gr (14) (5) (5} (7f 53) FACTORS 1 Truffle tons originated 3,276 3,1401 6,677 6,677 2 frame ton-nun 903.810 853.519 1.757.359 1.757.359 3 Treftic tons lified 10,680 10,713 21,393 21,393 ‘5 P1“. .11.. 1.571.592 1073130116 3.305. 503 3.305.508 5 Plene depertunss .18, 21,762 140,321; 140,321; 6 Flight: Aves-ego intersteticn flight distenee (miles) 817.7 79.7 xxx 82.0 7 Number of steticns 13.91 15.91; 29.85 -2.00.‘/ 27.85 8 Adjusted rum. (Flight - 27.5 .11..) 37.2 52.2 xxx 5!..5 9 Adjusted treffic ton-miles: [Tons urea (Flight - 27.5)] 610,896 559,210 1,170,115 1,165,918 RUINS! 0&1 IE” 10 Component M 3q|flt1°l '1' . Zdnéél 231.056 3 1875. 717 3 U75. 717 C " 11 Omen-11% 3' lquetion '2' 156.589 1:56.559 913.173 1456.589 1456.539 12 Totel 701. 250 687. 61:5 1. 333. 395 932. 506 1456. 589 A0 se‘ 15 039°“ ‘1 nation '3' 598.329 “682 1.203.011 Inn-$1.947 61.14614 11. Pert 1 (Ton-mile element) 161,277 11.7.631. 306,911 307,802 1,109 15 Pert 2 (Flight/Station element) 157,052 167.0148 8914.100 833,715 60,355 16 COIPWOI“ 5' 'Wt103 '16. 77. 537 77.776 155.315 155.313 " 17 Tom 67508“ 632.155 1.353.321; 1.296, 610% Gelculeted Qpereting gens“ 18 10‘5“ 81,377, 116 “.370. 103 .2. 71%7. 219 $2. 229. 166 .513. 053 stetions. 011 e consolideted-cerrier besis, the two stetions would not, of course, be dupliceted in the stetion count. Notes: Generel-nlquetiens l Eluetion '1' :27.07¢ (Ton-mile s)] Bunion '2' $156,589 per cerrier Bauetion '2' [26.th (Tons 1mm) (Flight - 27.5)] plus [0519.30 (Flight - 27.5) (Stetimsfl Equeticn 'h' [07.26 (Tens lifted)] Colnmns 3 end In The dete in columns 5 end 1. cover the 12-month period ended Septemer 30, 191.9. The expense figures ere celeuleted totels besed on the equetions presented in this report. (See Tables L; and 6.) Colum 5: Sum of column 3 end L; unless otherwise indiceted. Colum 6: (See footnote _e/) Colum 7: Lines 1-5 inclusive, ere identicel with dete in column 5. Line 7 is the sum of oolums 5 end 6. Other items ere computed from the besio rectors shown end from the equetions, end, in the expense dete, ere in some instenees identicel with eolum 5 (see lines 10 end 16). Line 6: [ Plene miles ] Plene depeFEiz-es APPLICATION OF effective range of the standard equation values and would therefore appear to require only a. single $166,589 cm burden figure rather than three times the amount for operation of three separate feeder carriers. As shown by Table 11, some additional saving as a result of consoli- dation should be effected in Aircraft Operating Expenseh Presently available data do not afford in- formation on how far beyond the Pioneer and Southwest traffic levels the equation standards would continue to be applicable. It seems reason- able to assume, however, that feeder consolida- tions representing operations well in excess of such levels would continue to yield the approxi- mate savings indicated by the equations, i.eo, , the number of feeders consolidated, minus one, mJltiplied by $166,589, and. some additional amount attributable to saving in Aircraft operating Expense*. Elimination of Five Small Stationsfl Wester Inland The calculations and full details respecting this mmple are shown on Table 12. The net saving to Western/Inland, based on system opera- tions for the twelve months ended September 30, l9h9, exclusive of the five stations here involved, is estimted, by application of the equations, at 3103, 828, the net amount between estinated expense saving of $208,793 and estimated revenue loss of 3101;, 965 . Traffic elimination is estimated at 611; tons originated and 176,510 ton-miles. The stations selected for this emmple repre- sented minimum traffic situations for this carrier. All were in operation for the full twelve-month period. All were intermfiate stations. ’ It should be noted that the indicated savings are the result of changes in the traffic character- istics of the carrier which it was estimated would result from the elindnations. The trunkldne equa- tions do not give weight to stations as such. EQUATIONS TO EXAMPLES OF ROUTE PATTERN REVISIONS Elimination of Five Snell Stations by Pioneer The calculations for this example are shown on Table 13. The net savilgs from the five-station elimination are estimted at $39,261:, representirg the difference between a calculated expense reduc- tion of $159,376 and a revenue loss of $120,112. Traffic elimination is estimated at 896 tons originated and 221, 8131 ton-miles. The procedure followed in calculating the effect of the elimination of the five stations from Pioneer is similar to that applied in the case of Western/Inland, except that the feeder rather than the trunkline equations are used. The stations are among the "smallest" served by Pioneer; they are all. intermediate to terminals, and all. were served for the full year of the sample period. 35 rimmed, in“. __..A_r_ain.,wiu a 7-,” ,— TABLE 12 Line [.1 [:0 \O (2340 VIC‘UNF‘ 1? 18 19 20 21 22 23 2h 25 * Operatixg Expense data here exclude flight equipnent depreciation CALCULATED EFFECT ON THE OPERATING EXHEISE-X- OF WESTERN/ INLAND FROM ELIMINATION OF 5 SHALL STATIOI‘S Based on: Equations "1" through "11" for the calculation of total Operating Expense excluding flight equipment depreciation and rentals (for the 12 months ended September 30, 191,9) Adjustments System total owing to System total before elimination elimination c after elimination Description of 5 stations 5 stations 2; of 5 stations (2) (3) (14) (5) FACTORS Notes (continued): Traffic tons originated 10,890 61]; h0,276 Column 1;, lines 1—5 (continued); Traffic ton—miles 15,163,0h6 176,513 114,986,503 (2) Line 1. The total of tons originated (enplaned) for each of Traffic tons lifted 89,340 5,381 83,759 the 5 stations is taken from the carrier's Form hl reports, and, in Plane miles 9,032,613 57,080 8,975,533 order to estimate for each station the total tonnage it may be Plane departures 53,018 2,851; 50,161; considered to generate—both originating and terminatim, the reported total tonnage originated is doubled. Flight: Average interstation flight distance (miles) 170.1; xxx 178.9 (3) Line 2. The estimated haul for each station, computed in Haul: Average length of traffic haul (miles) 370.8 xxx 372,1 step (15, is applied to the estimated total tonnage generated for each Ratio of [ Tons lifted ] 2 18 xxx 2 08 station, computed in step (2), in order to estimate traffic ton-miles 1Tons origina'Ea' ' ' attributable in total to the 5 stations. Number of stations 3645 5.00 31.1,; ()4) Line 5. The total plane departures for the 5 stations are the sum of t e n of departures shown on the carriers' Form hl station Adjusted traffic tons: (Tons — h,325) 36 565 m 35 951 rePOI'tS 13° the 0.1.13. . . Rate per adjusted traffic wmfle (GM Expense) 25.31195 m 2;.3595 (5) Line 1". plane miles attributable to the 5 stations are estimated at 20 plane miles per plane departure, based on the assump— EXPEI-JSE AND REVENUE tion of circuity, landing, and take—off, of 20 miles per flight to and from each station. 0&1 £112,159 (6) Line 3. In order to estimate traffic tons lifted in total for Component A: Fquati on «1': $3, 977,919 :3 51,5113 $3,926,399 the system excluding the.5.stations, the average system load on board Component B: Equation uzu 1,392,305 1,977 1,390,328 (computed as ton-miles dinded by plane mules, column 5) is weighted Total 5,370, 2’47 53,520 5,316,727 by the number of plane departures. The net difference between traffic tons lifted on the system before and after elimination of the 5 stations A0 ense is then attributed to the 5 stations. fiat A: Equation ''3" 2,183,808 17, 513 2,166,265 Part 1 (Ton-mile element) 1,663,386 19,367 1,6hh,019 “1““? I" _ - Part 2 (Haul element) 520,132 4,321, 522,216 Lines 12—22. Data represent the difference between columns 3 and 5, Component 13: Equation ")4" 1,331,128 137,730 1,193,398 and-are not directly ccmputed, Total 35115936 355,273 3,359,663 Line 23: Computed by diViding line 20 by Line 2. Total calculated Operating Expense!- 8,885,183 208,793 3,676,390 Column 5: Commercial transportation revenue (reported) plus mail revenue calculated at W 001““ 3 lid-““5 (”1an h. ‘60 cents r'mail ton-mile 9,026,150 10h,965 8,921,h65 ___.33L}ne = See mte 1‘6“?ng ’6? line 3a 901mm 1*- Elem-Ema e mug-WW 3 1111,2’47 $-103,828 3 215,075 Lines ,7,8,10,11: Unit, ratio, and weighted figures are computed from basic data in column 5. Total calcuhted Operating Expense? Per traffic ton-mile 58.60¢ 116.2% 57.8% {Lines 12-20: Calculated on the basis of the traffic factors and Total calculated transportation revenue per traffic ton-mile 59.53¢ xxx 59.53¢ equations shown. Commercial transportation revenue per conmerfial ton-mile 59.51¢ :00: 59.51;: Line 21: Computed at the rate or 59-53 cents (from line 2h,column 3)- and rentals. 3/ Cedar City, Cut Bank/Shelby, El Centro, Logan, Alliance. Notes : General—Equations : Eguation "1" [29.88¢ - (0.000013238¢) (Tons originatedfl [Tons - h,325] [Haul] E uation “2" ‘ *1 Shz 287 Tim] [Tons originated] ‘ « nation II II » I10.97¢ (Ton-miles)] plus [$1,h03.51 new] nation "1;" [$6.85 (Tons originated) (Ratio of( Tons lifted )2] Tons ori' gInated Notes (continued) : Column 3: Data cover the 12-month period ended September 30, 1919, and are taken from tables presented elsewhere in the report. (Tables 3, 5, 22, 23) Column )4, lines 1-5: Procedure in estimating traffic and traffic characteristics of the 5 stations: (1) Estimated length of traffic haul (miles) attributable to the traffic of the 5 stations is based on passenger origination—destination data presented in the March and September 1919 Airline Traffic Survey reports. For each of the 5 stations, 0&D passengers and passenger—miles provide the basis for estimation of the average haul of all traffic: (a) Such OIL-D traffic between any two of the 5 stations is halved to avoid duplication. (b) other 0&D traffic reported, both on-line and off-line to the connecting point on U/I’s route, is attributable in total to the station as shown. The average miles of passenger haul, i.e., journey, are thus computed from the sum of 03.43 totals referred to. Source: (36) Passewcr origination-destination data (March and September 19h9) for the traffic adjustments shovm in column )4 were furnished by D. W. Bluestone, Analyses Division, Bureau of Economic Regulation, C.A.B. 31% 5‘0 mdm VIC‘WNH 11 12 13 11; 15 1.6 17 18 19 20 21 22 23 21; it Operating Expense data here exclude flight equipment depreciation CAIBULATED EFFECT ON THE OPERATING EXPERSl‘B-M- CF PIOIL'IER FRCM ELIMINATION OF 5 SMALL STATIOIB Based on: Equations "1" through "1;" for the calculation of total Operating Expense exclmiing flight equipment depreciation and rentals (for the 12 mnths ended September 30, 19119) Adjustments System total owing to System total before elimination elimination a}: after elimination Description of 5 stations 5 stations 1 of 5 stations (2) (3) (h) (5) FACTORS Traffic tons originated 10,769 896 9,873 Traffic ton-miles 2,979,916 221,8111 2,758,108 Traffic tons lifted 33,599 6,2514 27,3115 Plane miles 3,918,920 132,900 3,786,020 Plane departures hh,181 6,6115 37,536 Flight: Average interstation flight distance (miles) 88.7 :06: 100.9 Haul: Average length of traffic haul (miles) 276.7 m 279.1; number of stations 23.97 5.00 18.97 Adjusted Flight: (Flight - 27.5 miles) 61.2 xxx 73.1, ted traffic ton-miles: one lifted (Flight - 27.5)] 2,056,259 no: 2,007,123 EXPEIBE AND REVEIWE Gel gyms empone A: Equation "1" 3 806,672 $ 60,052 3 71;6,620 Component B: Equation "2" 1456,589 - 14563539 Total 1,263,261 60,052 1,203,209 A0 2: ense* Tfl—Tomomn A: Equation "3" 1,3h8,651 53,920 1,29h,73l Part 1 (Ton—mile element) $112,852 12,972 529,880 Part 2 (Flight/Station element) 805,799 10,9118 761;, 851 Component B: Equation "14" 2113,929 115,1;011 198,525 Total 1,592,580 _ 99,324 131931256 Total calculated Operating Expense-x- 2, 855,8111 159,376 2,696,1165 Cmcial trampofiation revenue (reported) plus mail revenm calculated at 8) cents oer mail ton-mile 1,612,521; 120,112 l,1192,1|l.2 Be 6 mar $4,216,317 $-39,261L 3-1,20h,053 Total calculated Operating Ebtpenseat per traffic ton-mile 95.81% 71.8147! 97.?” Tom calculated trampofiatipn revenue per Wfic ton-mile 5h.ll¢ xxx 51;.ll¢ Commercial transportation revenue per comercial—ton-mille 53.9333 xxx 53.93?1 and rentals. _a/ Big Spring, Bryan, Las Vegas, Plainview, Tucumcari. Notes: General—eqations x nation "1“ [272077 ("ran-miles)] uation "2" $136,589 per carrier uation " " 226.116' (ions lifted) (Flight - 27.5)] lus E55119.” (Flight - 27.5) (Stations uation "11" [Jazz-(ram lifted)] 1] Note! (continued): Column 3: Data cover the 12-month period ended September 30, 19119, and are taken from tables presented elsewhere in the report. (Tables 1;, 6, 22, 25) Column 1;, lines 1-5: Procedurein estimat 7 traffic and t_r.effic chu'qcteris s o e s one: (1) Estimated length of traffic haul Tmiles) attributable to the traffic of the 5 stations is based on passereer origina- tion-destination data presented in the March ard September 19149 Airline Traffic Survey reports. For each of the 5 stations, can passengers and passenger-miles provide the basis for ' estimation of the average haul of all traffic: (3.) Such 0&D traffic between any two of the 5 stations is halved to avoid duplication. (b) Other Gib traffic reported, both on-line and off-line to the connecting point on PAL's route, is Source: attributable in total to the station as shown. The average miles of passenger haul, i.e., Journey, are thus computed from the sum of cab totals referred to. (37) new 13 Notes (continued) 2} Column 1;, lines 1-5 (continued): (2) line 1. The total of tons originated (enplaned) for each of the 5 sm is taken from the carrier's Form bl reports, and, in order to estimate for each station the total tonnage it may be considered to generate—both originating and terminating, the reported total tomage originated is doubled. (3) Line 2. The estimated haul for each station, computed in step (1), Is applied to the estimated total tonnage generated for each station, computed in step (2), in order to estimate traffic ton-miles attributable in total to the 5 stations. (1;) Line 5. The total plane departures for the 5 stations are the sum of the number of departms shown on the carrier's Fem 1:1 station reports to the C.A.B. (5) Line . Plane miles attributable to the 5 stations are estimate a 0 plane miles per plane depertue, based on the assump- tion of circuity, landing, and take—off, of 20 miles per flight to and from each station. (6) Line 3. In order to estimate traffic tons lifted in total for the eye em exc uding the 5 stations, the average system load on board (computed as ton-miles divided by plane miles, column 5) is weighted by the number of plane departures. The net difference between traffic tons lifted on the system before and after elimination of the 5 stations is then attributed to the 5 stations. Column Lu Lines 11-21. Data represent the difference between columns 3 and 5, Wealth computed. Line 22: Computed by dividing line 19 by line 2. Column 5: Lines 1-10: Column 3 minus column 1;, unless the item is a unit, ratio, or weighted figure computed from basic data in column 5. (See also the note referring to line 3, column 11.) Lines 11-12: Calculated on the basis of the traffic facta's and equa one am. Line 20; Computed at the rate of 511.11 cents (from line 23, column 3). Passenger origination-destination data (march and September 191t9), for the traffic adjustments shown in column 1; were furnished by D. W. Bluestone, Analyses Division, Bureau of Economic Regulation, C.A.B. 38 TECHNICAL SECTION Relation of Equations to Separately Reported Ehcpense Groups The five trunkline ard three feederline charts shown in this section (Charts 13-20, inclu— sive) differ from the corresporriing charts pre- viously presented (Charts h—lz) only in the character of "residual" expense values. In the case of charts previously presented, each equation value is compared with an expense remainder de- rived by deducting all other equation values from total reported Operating Expense-k. (See Tables 1h-l7, inclusive.) In the case of the accompanying charts, the Ground and Indirect Ebcpense equation value is compared with the residual obtained by deducting one or the other 6&1 equation value from total reported 6&1 EJqJense; the Aircraft Operatirg Emense-K- values are similarly treated. (See Tables 18—21, inclusive.) Table 22 summarizes reported ani calculated Operating Expense-x- and its two najor categories, as developed in the tables and charts referred to above. It also shows the amount and. percent devia- tions of the total reported Operating Expense:- from calculated values for each of the trunk and feeder carriers. Develgpment of Equatiors The development of the equatiors was a najor task. It was originally hoped that a single set of equations could be developed to serve for both feeders and trunklines. This hope was not realized and is not regarded as possible of realization ex- cept by use of added, and greatly complicating, factors. The necessity for using separate sets of equa— tions for feeders and trunklines presents a problem in the application of the equations to possible mergers of feeders with tnmklines. This is not to say that the equations are not useful for the STANDARDS--DOMESTIC SCHEDULED AIR CARRIERS purpose of estimating the firancial result of such a project, but, rather, that it is not regarded as feasible to estimate the effect upon the net operating margin of a trunkline by the simple process of consolidating the traffic figures of the two carriers and applying the trunidine equatiors to the consolidated totals. Trlmklines typically operate fewer schedules than feederlines to stations which they serve jointly. Realistic estimate of the effect of this type of consolidation would require extensive assumptions respecting the volume of service to be maintained and the effect upon volume and other traffic c‘raracteristios of any assumed changes in smh services. Aralzsis of Ton-Mile Expemes For the purpose of further defining the ton- mile expense relations referred to in the main part of the text, there are here presented Table 23, Charts 21 and 22, and supporting Schedules 1, 2, 3, and h. The schedules relate exclusively to trunklines. Table 23 presents, for both trunks and feeders, the several elements of calculated Operating Expensefl- on ton-mile bases. All data in this table are ranked in ascending order of com- posite expensiveness per ton-mile. The ton-mile expensiveness for each element of the equation values is also indicated on the table; the data. are arranged to afford conparisom, in terms of a ton—mile common denominator, of the several expense elements. The schedules illustrate the fact, how- ever, that these ton-mile expressions of expense are, for the most part, simply conversions from some more basic relation. This, of course, is also true of the feeder ton-mile figures appearirg in Table 23: The underlying G&I Equation "1" value in column 2, Table 23, is more significantly reflected in the adjusted-ton—mile base shown in column 2, Schedule 1. Crart 21 illustrates the relation be- tween the natural ton-mile values and the adjusted ton-mile values used in the trunlline G&I Expense Equation "1." The underlying Cuch Equation "2" value in colimm )4, Table 23, is more significantly reflected in the ton-originated arrangement shown in Schedule 2. The Aircraft Operating Expenses figures (Equation "3") shown in column 8, Table 23, include as their major element a true ton—mile constant of 10.97 cents; the added element is the haul differential shown in Schedule 3. The ton- mile figures appearing in column 10, Table 23, are only superficially related to ton-miles; this value (A0 Expense* Equation "14") is simply a con- version of the traffic-lift element analyzed in Schedule L; and illustrated on Chart 22. (See also Chart 8 in main body of text.) It does not seem feasible to devise a simple, inherent expense iniex for all carriers. Each carrier's inherent expense position is composite; it my comprise both favorable and unfavorable characteristics. For example, in calculated ton— mile expersiveness, National ranks third in its A0 Expensex- value (column 12, Table 23) and ninth in its Cfil Experee value (column 6, Table 23). In calculated ton-mile expensiveness, Capital ranks seventh in its A0 Expeme-x- value (column 12), and tenth in its (ii-I Expense value; and Northwest ranks thirteenth in A0 Expenses? value, and eleventh in ”0&1 Expense value. Tables 21; and 25 Comparative Summary of Reported and Calculated Operating Expe nee-r on fire-Group Expense Basis (Table 21;) Reported Operating Expensea‘e Related to Calculated Operating Expense-x- in Percentage Distribution by Account Classification (Table 25) These two tables attempt, in so far as avail- able data perzrit, to identify the source of the deviations from the equation values of individual carrier figures. While the lack of uniformity among tie carriers in allocating "burden" experses does not allow absolute identification of such source in all cases, the comparative presentation on Tables 21; and 25 clearly indicates the expense groups responsible for deviation in certain cases, and, in all cases, afford pertinent information on this subject. The reported expenses of Empire and TEA show the widest deviations from the equation values. The figures of these carriers, therefore, are selected as a basis for explaining the signifi- cance of the tables: Note that the calculated amounts of columns )4, 5, and 6 on Table 2).; correspond to the calculated percentage colmnns 9, 10, and 1].. Reported expense columns 2 ard 3 correspond to percentage columns 7 and 8. Note also that data appearing in the latter columns are repeated in columns 3 and 7 of Table 25, and that their sum appears in column 2 of Table 25. Empire's reported Operating EJqJense* is less than calculated by $232,519 (Table 21;: column )4 minus the sum of columns 2 and 3) and its reported expense is 21.79 percent less than calculated (column 9 minus columns 7 and 8). This carrier's reported Aircraft Operating Expense!!- is 38.99 percent of total calculated Operating Expenseit, as compared with a -39.06-percent relation of its calculated Aircraft Operating mapensefl- to its to- tel calculated Operating Expensem A great di- vergence, however, is shown in the Ground arri Indirect Expense figures: Here the reported G&I Expense is 39.22 percent of the total calculated Operating Expenseif, and the calculated 6&1 is 60.9h percent of the calculated total. In view of this showing, and other circumstances previously referred to, it seems reasonable to conclude that Empire's internal accounting practices are approxi- mately uniform with the generality of such prac- tices, and that its large minus—deviation from calculated expense values is almost, if not wholly, attributable to subaverage Gal Expense. Aircraft Operating Expenseie reported by m is 62.11 percent of the calculated Operating Ex- pense* total, as compared with the 56.83-percent relation between calculated Aircraft Operating TECHNICAL SECTION Expensex- and the calculated total. TTA's reported Ground and Indirect Expense is 60.32 percent of the calculated total, as compared with 143.17 percent calculated C&I to the calculated total. By this measurement, its Aircraft Operating Expense-X- is 5.28 percent high, and its GScI 17.15 percent high. Following through these analyses to Table 25, it is interesting to note that Empire's reported Flying Operations Expense-w- represents 70.h7 percent of its calculated Aircraft Operating Expense», as compared with the feeder average of 67.39 percent, and its Direct Maintenance Expense 29.35 percent, as compared with the group figure of 311.73 PGrcent. TTA's reported Flying Operations Expense->6 is 61.11 percent of the calculated total, and its Direct Maintenance h8.18 percent as compared with the feeder ‘ verage referred to above. The following table 13/ compares the several classes of reported Ground ani Indirect anaense of the two carriers with the feederline averages: REPORTED G&I EXPEI‘BE AS PERCENT OF CALCULATED GKcI EXPENSE 39 conformity in the total than in the detail, to lack of accounting uniformity, and to attribute the greater conformity of 6&1 Expense than A0 Expense-X- to the greater managerial control 01' Ground and Indirect Expense than Aircraft Operating Expense}. Carriers other than Empire and TIA whose deviations seem sufficient to warrant special comment are Mid—Continent, Braniff, and Northwest: Except for Empire, Mid-Continent is the only substantial mime—deviate. Its reported total Operating Expense-x- is onlz,r 96.37 percent of its calculated figure. The fact that its reported Aircraft Operating Expenses is 96.52 percent, and its Ground and Indirect Expense 96.28 per- cent, of the respective calculated totals, sug- gests review of its traffic reporting procedures. This is not to imply, however, that the entire amount of Mid-Continent's minus-deviation may not be due to better than average managerial performs. Its Direct Flight Equipment Mainte- Expense Account Classification Enpire ‘I‘TA Total 6&1 Expense 6h.35% 139.72% Ground Operations 21;.10 15.01: Ground and Indirect Maintenance 9.16 20.60 Passenger Service 5.36 11.119 Traffic and Sales 10.111 20.65 Advertising and Publicity 2.27 9.13 General and Administrative 10.51; 20.95 No carrier other than Empire and ITA varies sufficiently from its calculated value to permit such emphatic identification of deviation cause as is possible in case of these two. With respect to total figures for the twenty-five carriers, sixteen carriers deviate less than 2 percent; with respect to Aircraft Operating Expenses values, eight carriers! reported totals deviate less than 2 percent, and eleven carriers are in the 2—percent ‘rracket respecting M Elmense. (Tables 1, 2, ard 33) It seems reasonable to attribute the greater Feeder nance and Ground and Indirect average Mairrterence percentages (Table 25) are well below the trunkline 101.11% averages. There are, of course, 36.86 other divergences between the 13.23 carriers! individual percentages 8.21 and the group averages appearing 15 .99 in Table 25. 5.10 17.59 Braniff's figures suggest a comparison of its cost allocation procedures with those of similarly situated car- riers. Its reported total Operating Expenseie is h.07 percent above the calculated figure, its Aircraft Operating Expenses 16.63 percent above the calculated figure for this category, and its 6&1 Expense 11.27 percent less than the calculated figure. The principal source. of the disparity between this carrier's reported and calculated figures is in Direct Flight Equipment Maintenance, a category in which Braniff's reported total ex- ceeds the calculated trunkline average by 10.25 percent. 14,0 Northwest's total plus-deviation of [“88 percent appears to be principally attributable to its Aircraft Operating Enqiensee, although it also appears relatively high in Ground and Indirect Maintenance Expense. This carrier's fleet diffi- culties during the base period of the study have been the subject of previous comment. While available data are not informative respecting the cause of the carrier's relatively high reported Ground and Indirect Maintenance EXpense, it is noted that this category is derived partly by allocation of basic eiqaenses not onl;r between functions but also between domestic and inter- national services for which procedure there is no uniform prescription. Comnercial Traffic arri Transportation Revenues Tables 26 and 27 provide basic data, by car- rier, covering commercial ton—m'les and comercial transportation revenues. Both exhibits show a distribution of volume by scheduled and nonsched- uled revenue operations, and, within the former group, totals for reduced—fare arrl regular-fare passenger traffic, excess baggage, express, and freight. These data support the material pre- sented in Tables 7 and 8 (discussed in the min bochr of the text) which show percentage distribu- tion of reduced-fare and other passenger traffic and other classes of traffic (Table 7) and ton- mile rates of comercial transportation revenues by class (Table 8). The ton-mile data shown in Table 26 are co- ordinate in total with those presented in Table 35. Passenger ton-miles are computed on the basis of 192 pounds per passenger, as indicated by the notes to Table 36. Capital Charges Tables 28 and 29 and Schedule 5 present data covering flight equipment depreciation and rental expenses of the trtmk and feeder carriers. Table 29 shows the historical relation between these expenses and total Aircraft Operating Expense TECHNICAL SECTION reported by the carriers; the historical period covered is, for the trunks, the years from 1939 through September 30, 19149, and, for the feeders, their total years of operation, all in the postwar period. As discussed previously, the equation standards were developed for the Operating anaense values not including flight equipment depreciation and rentals, since the latter charges vary so geatly among the carriers owing to differences in maragement con—t siderations and age composition of fleets. In order, however, to estimte the carriers' total revemle requirements, discussed in the earlier text, it was considered necessary to develop esti— nates of depreciation and rentals. (See Tables 3—6.) Such an estimation is here made, for the purposes of the report, on the basis of the aver- age relationship during the postwar period between reported flight equipment depreciation expense and Aircraft Operating Eiqiense. Computation of this average relation, expressed as a percentage of Aircraft Operating Expense—25.75 percent for the trunks and 20.30 percent for the feeders—is shown by Schedule 5 which also supplies technical descriptive notes. Comarison of flight equipment depreciation and rental expenses, as reported and as calculated on the bases of the average relationships referred to, is made on Table 28, in both total dollar amounts and ton-mile rates. Table 28 also shorts a comparative summary, by carrier, of total re- ported Operating Expense including the depreciation and rental charges (columns 7 and 10), total cal- culated Operating Expense-r combined with the re- ported depreciation and rental charges (columns 8 and 11), and the total calculation of Operating Enqaense* combined with the estimate of depreci- ation and rental charges (columns 9 and 12). Percentage deviations are shown in columns 13 and 11; for each of the trunk and feeder carriers. Table 30 shows, in detail for each of the trunk and feeder carriers, the calculation of an average rate on investment developed from the carriers! reported net investment as of December 31, 1919 (Table 31) and generally average re- lationships between (1) Operating Expense-X- and reported working capital,‘and (2) calculated Aircraft Operating Expense* and reported invest- ment in operating property ani equipment at the close of the year 1919. Interest on investment is computed for each carrier at 6 percent after taxes at 38 percent; comparative return on in— vestment is shown on the bases of both reported and calculated net investment (Table 30). The computed capital charges—~flight equip- nent depreciation and rentals (Table 28) and return on investment (Table 30), are covered in the general text discussion of the analysis of expense-revenue margin of the carriers. (See also Tables 3—6, inclusive.) Generalheadquarters and Local Station Expenses Table 32 presents a breakdown of the car- riers! reported Ground ard Indirect Expense, and Ground Operations Expense, as between general headquarters, on the one hand, and local station expense, on the other. The distribution by the two categories, shown in total amount and in percentage relation, is referred to in the general text discussion of the relation of ton- mile factors to expense. For the trunks, the average proportion of local station expense in reported $51 EXpense Was 145.141 percent, and, of general headquarters expense, Sh.59 percent, although within the former group the trunk carriers' individual per- centages ranged from slightly more than 28 per- cent to 63.1;6 percent, and, in the general head- quarters expense, from 36.51; to 7l.h3 percent. Among the feeders, the average and individual proportions as between local station and general headquarters experses were, of course, farther from the near 50-50 distribution generally in— dicated for the trurflcs: the feeders' local station expense amounted to, both individually and on the average, about one-third of total reported 6&1 Expense, and general headquarters, about two—thirds. Ojeiating Expense, Traffic, and Station Data Eeported by the Carriers for the Twelve-Month Period Ended September 30, M9 Tables 33 and 3h, referred to earlier in this section, present the carriers! reported Operating Emense, in total and in percentage distribution, by nejor expense group and by account classification. Table 31:, sunmarizes two sets of totals—one, inclusive of flight equipment depreciation and rental experses, and, the other, exclusive of those expenses. In Table 33, reported Aircraft Operating and Ground and Indirect expenses are shov‘m in per- centage relationship to reported Operating Ex- pense; account totals within each of the mjor expense groups are shown in percentage relation— ship to their reported group totals. Table 35 Presents, for each of the twenty- five trunk and feeder carriers, the volume of traffic tons originated and ton-miles carried in domestic system operations during the twelve- month period ended September 30, l9h9. Average traffic volume per station for each of the carriers is also shown ‘qv tons originated, tons lifted, and ton—miles. The detailed data in this table are supplementary to system totals presented in Table 36. Table 36 presents basic traffic and oper- ating data for the ten feederline and fifteen tnmldjne carriers whose scheduled domestic revenue operations provide the basis for the expense stardards developed in this report. The notes on Table 36 describe and define the data shown. Supporting mterial covering the bivalve-month we ighted count of stations by carrier (column 2 of Table 36) is furnished in Table 37. TECHNICAL SECTION Schedule 6 is proflded in supplement to Tables 36 and 37; it furnishes the specific expense and operating data needed for inclusion of Florida Airways in the calculation of Operating Expense):- standards for feeder air carriers. (See Tables 16, 17, 20, 21, and related charts.) For purposes of the report, it was considered desirable to in- clude Florida's operatiors in calculation of the equation standards, since it is the "smallest" feeder for which data are available for a twelve- month period; it was not considered desirable, however, to present data covering Florida in other than the major calculation tables and charts, , sime its scheduled operations ended as of March 28, 1919, the date of its certificate termination, and it is not new conducting sched- uled operations. TABLE 111 (See charts )4) 5’ 6) CATEUIATION OF CClIPONENTS A AM.) B 0F GROUND AND INDIRECT EXPENSE FOR DOESTIC TRUNK AIR CARRIERS Equations "1" and "2" Related to Total Reported Operatigglsltpensek (Residuals "l" and "2") GROUND AND INDIRECT EXPEIBE: (Based on data for 12 months ended September 30, 1919) Conponent A, Equation "1" Calculation of CGJPONENT 'A 29.88¢ per GROUND AND INDIRECT EXPETSE: Component B, Eguation "2" adjusted ton- Calculation of 001mm B Adjusted Adjusted Residual I'1'I Calculated mile, less Per ton Calculated Calculated Residual tons ton-miles Per Residual "l" 0.000013238¢ Calculated Residual "2n originated: Residual "2“: 0,3,1 Expense; Gail: originated (Haul :1: Per mile adjusted per mile per ton Residual "1": Per 11 $31 512 287 System Components Carrier Expenseu- (Tons-11,325) adjusted tons) Qf Haul ton-mile System Of Haul originated System originated System [Tons +fi,m (col. 13 x tons) A and B Carrier (If (2) (3) (1) (5) (6) (7) (8) (9) (10) ' m) (12) (13) (11) (15) (16) com 3 2,851,815 11,629 5,399,561 8 1,335 29.6371 33 1,600,093 8 1,335 29.63¢ :5 1,600,019 $66.01 $1,251,766 $66.01 81,251,722 $ 2,851,771 com COL 2,375,833 11,803 3,882,827 1,278 28.90 1,121,993 1,386 29.63 1,150,118 61.06 1,225,385 65.55 1,253,810 2,101,288 cox. NAL 5,717,010 21,658 11,952,611 7,269 29.18 1,108,025 7,271 29.50 1,110,951 16.10 1,336,086 16.20 1,339,015 5,719,969 NAI- NEL 2,912,182 28,325 5,378,918 8,337 29.13 1,583,262 8,312 29.15 1,581,116 11.60 1,358,336 11.63 1,359,220 2,913,366 NBA 085 1,570,608 30,018 10,578,313 9,090 30.28 3,203,113 8, 831 29.13 3,113,102 12.11 1,157,506 39.81 1,367,195 1,180,297 02.9 1101 3,825,065 30,632 9,158,968 8,211 26.81 2,155,100 9,012 29.12 2,691,588 32.31 1,130,177 39.19 1,369,965 1,061,553 1m W/I 5,392,871 36,565 13,558,302 10,789 29.51 1,000,569 10,728 29.31 3,977,912 31.60 1,111,932 31.05 1,392,305 5,370,217 W/I mL 7, 751, 871 56,651 21, 783,163 16,120 28. 98 6,313,376 16,169 29.07 6,332, 331 23. 28 1,119, 510 23.59 1,138,195 7,770, 826 nu. BNF 7, 979,091 57, 957 20,760,197 18, 251 31.50 6, 538, 511 16, 812 29.06 6,032, 801 31.25 1, 916, 290 23.13 1,110,583 7,173,387 mm M 11,902,121 78,017 12,879,022 21,161 31.31 13,138,671 22,170 28.79 12,315,018 31.05 2,557,106 17.77 1,163,750 13,808,768 NNA CAP 13,181,513 129,161 11,629, 557 36, 268 28.08 11,689,136 36,308 28.11 11, 702, 068 11.08 1,179,175 11.18 1,192,107 13,191,175 CAP m 31,102,019 156, 930 113, 209,302 15,191 28. 80 32,600, 735 13, 518 27.75 31,115, 527 16.66 2,686,192 9.31 1,501,281 32, 916, 811 TM EAL 32,617,790 238,369 111, 866,572 66, 276 27. 80 31,103, 379 63,573 26.67 29, 831, 809 11.17 2,782, 981 6.21 1,511,111 31,319, 220 EAL m 13,928,592 256,802 160,013,326 68,065 26.50 12,111,111 67,817 26.12 12,275,166 6.33 1,653,126 5.81 1,517,118 13,792,611 UAL AAI. 18,066,927 372, 251 187,616,016 92,315 21.81 16,511, 782 92,651 21. 89 16,697,616 3.61 1, 369, 31.1 1.05 1,525,115 18,222,761 AAL -x- operating Expense data exclude flight equipment depreciation and rentals. Notes : Column 2: Column 1: Column 5: Column 6: Residual 6&1 Expense = Total Operating Expense!- reported, less calculated A0 Expense'i Column 3 x average miles of traffic haul. Column 7 divided by average miles of traffic haul. (See Chart 1.) Column 7 divided by column 1. (See Chart 5.) Notes (continued) : Column 7 : Column 8: Column 9: Column 10: Residual "l" = Total Operat- ing Expense‘reported, less calculated A0 Expenses less Component B of calculated 6&1 Expense. Column 9 1: column 3. (See Chart '1.) (See Chart 5.) Column 8 x average miles of traffic haul. Eguation "1": [29.88¢ - (0.000013238¢)(Tons origimtedfl [Tons - 1,325] [Haul] (42) Notes (continued): 0011mm ll: Column 12: Colunm 13: Column 111: Column 15: Column 12 divided by tons originated. (See Chart 6.) Residual "2" B Total Operating Expenséxeported, less _ calculated A0 E1q3ensd§ less Component A of calculated Carl Expense. Calculated rate per ton originated = [W] (See Chart 6.) Column 13 1: tons originated. Equation “2" : $1 512 287 [m] [ Tons originated] Sum of columns 10 and 11;. 0 TABLE 15 (See Charts 7, 8) CALCUIATIOI‘I OF CGJPOHENTS A AND B OF AIRCRAFT OERATING EXPEBBFFOR DCMESTIC TRUNK AIR CARRIERS Equations "3" and "1" Related to Total Reported Operetta; E>q1_ense*(Residuals “ 3" and "1") (Based on data for 12 months ended September 30, 1919) AIRCRAFT OPERATHIG EXPEI'SE: Component B, Equation "1" Calculation of COMPOI‘ENI‘ B Calculated ABCRAFT OERATING XPEI‘BE: Component .1, Equation "3" Residual "1" __ Residual "1": Calculation of CQEPOIIENTEK Dividéd by System Calculated Calculated Residual "3" $1,103.51 CalcTIIated calculated ratio of ($6.85 per ton Residual "1" A0 Expense :* Residual Per mi 10.97;! per per mile Residual "3": Residual "3" I: Tom lifted ] Ratio originated x the divided by Components Carrier A0 Expense* System of Haul ton-mile of Haul System Per Idle of Haul System 7 Tom or1g1'nated_ souared ratio squared) the ratio A and B Carrier (1) (2) (3) (1) (5) (61 (7) (8) I97 (16) (12) (13) (MT (15) com 5: 2,061,962 8 1,285,631 8 3,183 as 767,551 8 518,036 8 1,285,590 8 3,183 8 779,372 8 318,111 6.0025 8 779,328 8 318,093 8 2,061,918 com COL 1,195,781 890,116 3,391 550,130 368,111 918,571 3,502 577,213 268,171 1.6225 605,668 281,706 1,521,239 COL 1m. 5,222,067 2,776,120 1,578 1,927,961 851,088 2,779,019 1,583 2,113,018 696,017 12.3201 2,115,917 696,851 5,221,996 NAL NEA. 1,998,998 915,831 1,981 680,191 266,527 916,718 1,985 1,052,280 181,922 1.7089 1,053,161 185,329 1,999,882 11m 085 2,862,961 1,912,535 5,127 1,327,627 191,597 1, 822,221 5,171 1,010,737 517,780 1.0101 950,126 172,819 2,772,650 0838 1108. 2,291,271 1,326,815 1,138 1,116,681 119,619 1,566,333 5,239 727,911 362,160 1.0101 967,129 181,308 2,533,762 1101 W/I 3,537,563 2,206,135 5,950 1,663,386 520,122 2,183,808 5,889 1,353,755 620,989 1.7521 1,331,128 610,609 3,511,936 W/I m1 _ 5,938,102 3,092,619 8,013 2,571,951 539,650 3,111,601 8,093 2,826,198 1,082,919 6.8121 2,815,153 1,090,212 5,957,057 1111. BNF 5,186’4,h15 331155914149 93611] 2,211.17,005 5023737 29911-937112 8,235 2,51Ll-3673 151583835 (407089 2,008,966 925,791- 1159585708 EMF 1-' 9,711,157 6,829,198 12,131 1,961,751 771,088 5,735,812 10,110 3,975,615 1,759,122 5.1076 2,881,959 1,275,203 8,617,801 1m CAP 10,080,829 5,159,172 16,007 1,719,753 152,351 5,172,101 16,017 1,908,725 2,115,830 5.3821 1,921,657 2,121,101 10,093,761 CAP 1m 21,181,001 11,958,297 20,735 12,760,597 1,012,192 13,773,089 19,092 10,110,912 3,602,392 8.3521 9,225,701 3,192,285 22,998,793 1m EAL 26,271, 879 11,120,111 30,727 12,193,171 658,667 13,151, 811 28,021 13,120,038 1,913,872 7.1289 11,851,168 1,138,752 25,003,309 EAL 111 29,685,123 18,860,513 30,269 17,850,008 871,527 18,721,535 30,051 10,960,588 1,155,521 6.0516 10,821,610 1,100,218 29,519,115 1111. AAL 32,851,605 21,370,113 12,101 20,818,578 707,369 21,525,917 12,710 11,328,658 5,369,032 1.1521 11,181,192 5,112,887 33,010,139 AAL * Aircraft operating 1331361155 data here exclude flight Notes (continued): Column 6: $1,103.51 per average mile of Notes (continued): Colman 9: Residual "1" = Total Operating 6‘111-‘1PIIIBITh depreciation and rentals. traffic haul. Expenset reported, less Column 7: Sum of columns 5 and 6. calculated GM Expense, less Notes: Column 2: Residual A0 Expense = Total Operating Equation "3": Component A of calculated Expense? reported, less calculated C111 .9758 Ton-miles)] plus A0 Expensdt Expenset $1,103.51 (Hau1)] ‘ Column 10: (See Chart 8.) Column 3: Residual "3" = Total Operating Expense* Column 8: Colman 7 divided by average Column 12: E nation “1": reported, less calculated 0&1 Expense, miles of traffic haul. (See Tons lifted 2 less Component B of calculated AO Expense? curt 7.) $6.85 (Tons originated) Ratio of W ) Column 1: Column 3 divided by average miles of Column 13: (See Chart 8.) traffic haul. (See Chart 7.) Column 11: Sum of columns 7 and 12. (1.3) TABLE 16 (See Chart 9) CALCULATION OF COMPONENTS A AND B 0F GROUND AND INDIRECT EXPENSE FOR DQIESTIC FEEDER AIR CARRIERS Equations "1" and "2" Related to Total Reported Operating Expense* (Residuals "l" and "2") (Based on data for 12 months ended September 30, 1919) GROUND AND INDIRECT EXPENSE: Component A, Equation "1" GROUND AND INDIRECT COMPONENT A: EXPENSE: Component B, Calculated Equation "2" Calculated Residual "1" C(MPONE—TNT : GacI Expense: Residual Traffic (27.07¢ per Calculated Components Carrier 6&1 Expense* Residual "1" ton-miles ton-mile) Residual "2" Residual "2" A and B Carrier (3) (It) (57 - (55 ('7) (5) (9) FLA $ 5060750 $ 503161 1801887 3 1480966 3145707814 314563589 is 5050555 FLA ms 578,650 122,061 1.1.1.681 119,563 1159.087 1.156.589 576,152 WIS EMP l417.655 63.9011 715.237 193.615 2211.070 1156.589 650.201; EMF cm. 686,282 229,693 903,810 21.11.661 11n,621 [156,589 701,250 c111. MON 7113027 25hsl438 8530519 2310056 14791971 [1560 589 68706145 MON ROB 633.636 177.0147 577.595 156.1136 1177.200 1156.559 613.025 ROB TTA 1.1’41.032 6310493 1.087.}407 291.1561 8116.721 1:56.559 750.950 TTA WCA 670. 822 2111.235 881 .5142 233. 715 1432. 107 1156. 589 695.3011 WCA FDA 951.657 1175.068 1.728.990 1:68.038 1:63.619 1156.589 9211.627 PDA PAL 1 .2119. 309 792. 720 2.979. 9119 806.672 [1142.637 1156. 589 1.2633531 PAL SWA 1.083.019 626.1130 2.943.019 607. 193 1175.826 1156.539 {1.063. 782 SWA * Operating Expense data here exclude flight equipment Notes (continued): Column 5: Equation "1": [27.07¢ (Tonhmiles)] depreciation and rentals. (See Chart 9,) Column 6: Residual "2" = Total Operating Expense* Notes: Column 2: Residual G&I Expense = Total Operating reported, less calculated A0 Expenset, less Expense* reported, less calculated A0 Expense*. Component A of calculated G&I Expense. (See Chart 9.) Column 7: Equation '2": 3&56.589 per carrier. (See Column 3: Residual "1” = Total Operating Expense* reported, ha . less calculated A0 Expensefi, lees Component B of Column 8: Sum of columns 5 and 7. calculated 6&1 Expense. (44) TABLE 17 (See Charts 10, 11, 12) CALCULATION OF COMPONENTS A AND E OF AIRCRAFT OPERATING EXPEBBEv‘i- FOR DCMESTIC FEEDER AIR. CARRIERS Eguations "3" and "2" Related to Total Reported Opaat'BgFExpenset‘ (Residuals "3" and "2") (Based on data for 12 months ended September 30, 1929) AIRCRAFT OPERATING EXPENSE: Component B, AIRCRAFT OPERATING EXPEBBE: Goyonent A, Equation "3" Equation "2" Residual "3" Adjusted Adjusted $529.30 per 26.2075 CCMPOMEHI‘ A: Calculated CCEEPOrENI‘ E: Col. 74 T Flight ton-miles adjusted per Calculated Residual "3" Calculated Calculated Residual Flight miles (col. 6 1: Flight mile adjusted Residual "3" per adjusted Residual "32" Residual "2": A0 Expense-)6: A0 Per miles (Unadjusted Tons Per ton-mile: (col. 9 4' Flight mile Per Residual $7.26 per Components Carrier Expense* System station less 27.5 less 27.5) lifted) station System System col. 10) Ear station System station "2" ton lifted A and B Carrier (17' (2) (37' (h) (5) 160 (7) (8) (9) (10) (11) (12) (13) (1h) (15) (15) (17) .(15) F“- $ 157,526 99 128,782 $11, 859 $3 652 18.2 72,051: $ 9,997 $103,567 $ 19,022 $3 127,589 3 6’46 35 109,772 $10,108 ii 29,937 $ 28, 722 6 156,331 FLA WIS 512,892 269,013 29,835 652 25.6 275,606 25,028 393,755 72,760 266,515 651 396,288 25,209 26,377 23,879 510,392 'WIB EMI’ 182,202 90,200 6,050 218 27.8 359,952 15,271 227,691 95,028 322,719 779 -2,621 -310 —138,517 92,002 216,721 22? CHA 660,898 583,361 21,938 733 57.2 610,896 31,220 237,052 161,277 598,329 752 222,292 30,359 62,569 77,537 675,866 CHA MON 705,820 628,062 39,202 755 52.2 559,219 28,673 257,028 127,632 602,682 727 280,503 30,122 101,158 77,776 682,258 HON ROB 37129 791 315, 629 37, 2111 861 23.5 352, 282 23, 895 201, 235 93, 583 295, 018 305 222, 227 26 ,351 79, 773 59, 162 352, 180 ROB TTA 1, 378, 807 1, 288, 718 60, 760 1,009 60. 2 727, 022 33, 068 701, 372 197, 212 898, 586 702 1,091, 732 51, 273 280, 221 90,089 988,675 TTA WCA 236,958 321,201 21,227 771 27.8 222,293 15,271 229,065 116,818 325,883 829 202,152 13,610 91,075 115,557 261,220 RCA Bl 1,176,220 1,022, L158 53,205 802 66.2. l, 225, 213 36,272 711, 972 323,256 1,035,228 799 719,967 36,832 1110, 992 133,962 1,169,390 FDA PAL 1, 573,628 1,332,699 55, 682 910 61.2 2, 056, 259 33,617 805, 799 522, 852 l, 328, 651 919 791, 921 33, 038 229, 977 223, 929 1, 592, 530 PAL SWA 907,385 580,663 22,192 1,080 22.2 1,008,067 12,302 295,296 266,130 561,226 1,022 315,220 13,132 325,959 326,722 888,128 522 -x- operating Emense data here exclude flight equipment Notes (continued): Column 7: Tons lifted 1: Flight less Notes (continued): Column 13: Residual "32" = Total Operating depreciation and rentals. 27.5 miles (column 6) = Expense-1e reported, less calculated Adjusted ton-miles. 0&1 Expense, less 26.20¢ per Notes: Column 2: Residual A0 Expensea‘ :1 Total Operating Column 8: $529.30 x column 6. (See Chart 11.) traffic ton-mile (unadjusted). Expenses:- reported, less calculated Column 9: Column 8 x number of stations. Column 12: Column 13 divided by number of 0&1 Expense. Column 10: 26.20¢ x column 7. stations. (See Chart 11.) Column 3: Residual "3" -'- Total Operating Expense} Column ll: Sum of columns 9 and 10. Column 15: Residual "2" : Total operating reported, less calculated GM Expense, Eguation "3“: Expensax reported, less calculated less Component B of calculated A0 Expensei'co 0&1 Expense, less Conponent A of Column 2: Column 3divided by number of stations. [26.20¢ (Tons lifted)(F1ight - 27.5)] calculated A0 Expense'X-o (See column 5: Column 2 divided by: Average inter- plus £13529.” (Flight —- 27.5) (Stations)] Chart 12.) station flight distance (Flight) less 0011111111 16: E uation "2": 27.5 miles. (See Chart 10.) Column 12: (Column 11 divided by number of $7.26 (Tons Iift’ ed)] (See Chart 12.) stations) divided ”:57 Flight less Column 17: Sum of columns 11 and 16. 27.5 miles. (See Chart 10.) (45) CHART I3 DOMESTIC TRUNKS GROUND AND INDIRECT EXPENSE: COMPONENT A ' COMPONENT A OF Cal EXPENSE RELATED TO REPORTED Gal EXPENSE DATA FOR I2 MONTHS RESDUAL "I-Gal"** ENDED SEPTEMBER 30, I949 AVERAGETMILES OF TRAFFIC HAUL '00 I I I I I l **REPORTED GROUND AND INDIRECT EXPENSE \ I->> 90 — LESS: COMPONENT B OF GROUND AND INDIRECT EXPENSE 80 _T (SEE CHART 4 AND SUCCEEDING CHARTS) X / - E L A / L 70 / U) / (I: <1 . j 60 / O o T / w THE VALUES PLOTTED ON THIS CHART, AS FOR 3 50 A / ~ EACH CHART PRESENTED IN THIS SERIES BASED ON (I) 2 THE INDIVIDUAL REPORTED TOTALS IN THE TWO G&I g P / AND A0 EXPENSE GROUPS, ARE THE NET VALUES REMAINING q AFTER THE DEDUCTION OF ONE OF THE TWO CALCULATED g 40 COMPONENTS IN EACH EXPENSE GROUP. SEE CHART 4 2 FOR COMPARISON. .— 30 D A L CM W 20 c gag 4. , LL, 38 LA5 -_ CALCULATED CURVE VALUE = [2.9 88 0‘ - (00000/3238 CU 70A/5)][r0/vs-4325] lo T '- // CALCULATED 03033 VALUE = [2.9.88¢ —(0. 0000/3230 C)! r0/v3)][70/vs- 4,325][HAUL] OA~ o /I/ (U 20 40 so 80 IOO |20 I40 I60 I80 200 220 240 260 280 300 320 340 - 360 380 4,325 TONS TRAFFIC TONS ORIGINATED (THOUSANDS) I46) SOURCE: TABLE I8 RESIDUAL "(—Cal" ** CENTS PER ADJUSTED TON-MILE 80 TO 60 50 4O 30 20 CHART I4 DOMESTIC TRUNK§ GROUND AND AND INDIRECT EXPENSE: COMPONENT A EQUATION I COMPONENT A OF 68d EXPENSE (CHARTS 4 AND l3) PLOTTED AS A STRAIGHT LINE ADJUSTED TON-MILES (SEE CHARTS 4 AND (3) ** REPORTED GROUND AND INDIRECT EXPENSE LESS: COMPONENT E OF GROUND AND INDIRECT EXPENSE (SEE CHART 5 AND PRECEDING CHART) C 8: 80 N NSNI N w 3'3 TE fig I/ fig w 2 I, E u P A A A A L A O L CALCULATED L/NE VALUE =[29.CC¢ 4000003233 m r0/v31] CALCULATED GROSS VALUE = [29. 88¢-(0. 0000/3238¢){ r0~sg/[ TONS -4,325][HAUL] I 20 40 so so I00 (20 I40 (so (so 200 220 240 260 280 300 320 340 360 380 TRAFFIC TONS ORIGINATED (THOUSANDS) I47) SOURCE: TABLE I8 CHART I5 DOMESTIC TRUNKS GROUND AND INDIRECT EXPENSE: COMPONENT B EQUATION "2" COMPONENT B OF G8I| EXPENSE RELATED TO REPORTED GBII EXPENSE DATA FOR I2 MONTHS RESIDUAL "2-CDI"** ENDED SEPTEMBER 30, |949 TRAP—PIC TONs ORIGINATED '°° T I I I I **REPORTED GROUND AND INDIRECT EXPENSE LESS: COMPONENT A OF GROUND AND 90 —- INDIRECT EXPENSE (SEE CHART 6 AND PRECEDING CHARTS) 80— KI O 0') O CALCULATED CURVE VALUE = W TONS + 4,400 4:. O CALCULATED GROSS VALUE = M TONS ORIGINATED 7'0/V5‘ + 4,400 DOLLARS PER TON ORIGINATED 0| 0 r>o 'nzm u o . >22 'o>o >24 I 20 U A A L L A . L I0 0 l I I 0 20 4O 60 80 IOO l20 I40 I60 I80 200 220 240 260 280 300 320 340 360 380 TRAFFIC TONS ORIGINATED (THOUSANDS) SOURCE: TABLE 18 (48) CHART I6 W AIRCRAFT OPERATING EXPENSE: COMPONENT A COMPONENT A OF A O EXPENSE RELATED TO REPORTED AO EXPENSE* DATA FOR l2 MONTHS ENDED SEPTEMBER 30, I949 RESIOIIAI. " I-Ao" ** AVERAGE MILES OF TRAFFIC HAUL '°° l T J I l **REP0RTEO AIRCRAFT OPERATING EXPENSE* 90 — LESS: COMPONENT B OF AIRCRAFT OPERATING EXPENSE 80 _ (SEE CHART 7 AND SUCCEEOING CHART) 70 (I) 0: 3 60 _l 8 5? u. L 0 50 ——— 8 CALCULATED LINE VALUE= [$1,403.51 + (I0.97¢)(T0~S)] ,,\\ Z I \\ . A u AT Ross VALUE= I,403.5I(HAUL) + IO.97¢ (TON-MILES) \ 0 / g 407 CLCL EDG [It ] [ iji E c O L [— 30 T . / 2 T /. a 20 s 23 ‘1’: 7,“, // 3c w LF / I2 ' . '0 j / T 7777 7 7 ~ 9/" ..’. $I,403.5I{1T/J t 0 20 4o 60 80 IOO I20 I40 l60 I80 200 220 240 260 280 300 320 340 360 380 TRAFFIC TONS ORIGINATED (THOUSANDS) SOURCE: TABLE I9 *EXCLUDING FLIGHT EQUIPMENT DEPRECIATION AND RENTALS (49) CHART I7 DOMESTIC TRUNKS ‘ AIRCRAFT OPERATING EXPENSE: COMPONENT B EOUATION "4" COMPONENT B OF AO EXPENSE RELATED TO REPORTED AO EXPENSE* DATA FOR I2 MONTHS RESIDUAL "2-A0"** ENDED SEPTEMBER 30, I949. THE RATIO TRAFFIC TONS LIFTED TRAFFIC TONS ORIGINATED 2° T T T T **REPORTED AIRCRAFT OPERATING EXPENSE* '8 T LESS: COMPONENT A OF AIRCRAFT OPERATING EXPENSE (SEE CHART 8 AND PRECEDING CHART) T T T T i T CALCULATED LINE VALUE - $6.85 (TONS ORIGINATED)(RAT/0 0F——— TONS “”50 ) TONS ORIG/NATED MILLIONS OF DOLLARS 6 A A TONS LIFTED 8 ——_ Z T L— CALCULATED GROSS VALUE [$6.85 ( ONs 0R/GlNATED)(RAT/0 0F TONS 0——R——IGINATED)7 XE LL T w 6 c A . C P 4 c A N _BI_A—W ../ c0 CN w A N L A . ../’ - 0N &E | L F / LT SA / 2 T / -/ L’fm I. O 'I T 0 50 IOO ISO 200 250 300 350 400 450 500 550 600 650 700 750 800 TRAFFIC TONS LIFTED (THOUSANDS) SOURCE: TABLE I9 *EXCLUDING FLIGHT EQUIPMENT DEPRECIATION AND RENTALS (50) THOUSANDS O F DOL LARS CHART l8 DOMESTIC FEEDERS GROUND AND INDIRECT EXPENSE: COMPONENTS A AND B EQUATIONS "I" AND "2“ COMPONENTS A AND 8 OF G 8 I EXPENSE RELATED TO REPORTED G 8! EXPENSE DATA FOR |2 MONTHS ENDED SEPTEMBER 30, |949 REPORTED GaI EXPENSE 3000 (SEE CHART 9 ) 2500 2000 COMPONENT A: CALCULATED VALUE = [27.O7¢ (TON-M/LES)] (LINE FITTED BY LEAST saUAREs METHOD, EXCLUDING \ EMF: ROB, AND TTA FROM CALCULATION ) FA I500 5 L. w p A T 2 WC A I000 w 8 IF] §22 . / /‘ ./ 500 T ' I | l COMPONENT B: CALGUILATED VALUE = $456, 589/ O0 250 500 750 I000 I250 I500 I750 2000 2250 2500 2750 3000 TRAFFIC TON-MILES (THOUSANDS) SOURCE: TABLE 20 (51) CHART l9 DOMESTIC FEEDERS AIRCRAFT OPERATING EXPENSE: COMPONENT A EQUAT'°”"3" COMPONENT A OF A0 EXPENSE RELATED TO REPORTED AO EXPENSE* DATA FOR I2 MONTHS RESIDUAL "I—AO"** PER STATION AVERAGE INTERSTATION FLIGHT DISTANCE IN EXCESS OF 27.5 MILES ENDED SEPTEMBER 30. I949 2000 **REPORTED AIRCRAFT OPERATING EXPENSE* I750 F. LESSI COMPONENT 8 OF AIRCRAFT OPERATING EXPENSE (SEE CHART IO AND SUCCEEDING CHART) Lu 1‘ I500 2 T- 5 53 51' I250 A LIJ a w A / 5 E 33 C ‘- / 3 I000 T M g M—AB A // AS . /° [TI . /'/ U) / a m /“ 5’ 500 CALCULATED LINE VALUE-[$549.30+ (26.40¢)(To~s LIFTED PER STATION)] 0 CALCULATED GROSS VALUE'[$549.30(FLI6HT—27.5)][STATION$]+[26.40¢(TON5 LIFTED)(FLIGHT-27.5)] $549.30 250 O O 2 4 6 8 IO l2 l4 l6 [8 20 22 24 TRAFFIC TONS LIFTED PER STATION (HUNDREDS) SOURCE: TABLE 2. *EXCLUDING FLIGHT EQUIPMENT DEPRECIATION AND RENTALS I52) CHART 20 22M§§IEL£§E2§B§ AIRCRAFT OPERATING EXPENSE: COMPONENT B EQUATION “4" COMPONENT B OF AO EXPENSE RELATED TO REPORTED AO EXPENSE* DATA FOR l2 MONTHS ENDED SEPTEMBER 30, l949 ‘ RESIDUAL “2-Ao“** *‘X'REPORTED AIRCRAFT OPERATING EXPENSE * LESS:COMPONENT A 0F AmCRAFT OPERAnNG EXPENSE 900 (SEE CHARTIzAND PRECEmNC CHART) 800 700 U) 0‘: < 4 600 .l O O ‘5 500 U) 0 2 S 3 w 3 400 w7~w A O I P ,_ A L O 300 r~— w E g c M T E g A 200 F w B H0 5! L I ' AN 1 x ’f s CALCULATED LINE AND @3055 VALUES = [5 7.26 (TO/VS LINED] I l o , o 5 I0 IS 20 25 I 30 35 4o 45 50 TRAFFIC TONS LIFTED (THOUSANDS) $0URGE:TABLE 2| *EXCLUDING FLIGHT EQUIPMENT DEPRECIATION AND RENTALS 6 (55) TABLE 18 (See Charts 13, 11;, 15) GROUND AND INDIRECT EXEEDBE: CAICUIATION OF C(IVIPOIENTS A AND 13 OF GROUND AND INDIRECT EXPENSE FOR MSTIC TRUNK AIR CAREERS Equations "1" and ”2" Related to Reported Ground and Indirect Expense (Residuals 'l-GdzI' and "(é-6&3) (Based on data for 12 months ended September 30,. 19119) Component A, Equation "1“ Calculation of coupomu’r‘ A GROUND AND INDIRECT EXEDBE: Component B, Equation "2" 29.88¢ per Adjusted Calculated adjusted ton- tons Adjusted Residual "l—Gé’fi" Residual mile, less Calculated originated ton—miles Per "l—Gfl" 0.000013238¢ Residual Reported (Tons - (Haul 1: Per mile adjusted per mile per ton "1—Gé‘;I": Per ton Carrier G&I Eagaense 11325) adjusted tons) of Haul ton—mile System of Haul. originated Smatem originated (1) (2) (3) (h) (5) (6) (7) (5) T9) (10) (111 CONT 3 23921-13335 111-3629 5339995614 5.3 14,532 30.9858 $5 1,672,633 3 143335 29-63¢ 9.; 1960090149 $69087 COL 2,262,299 11,803 3,882,827 3,815 25.97 1,008,859 11,386 29.63 1,150,118 58.13 m 5,752, 878 21,658 11, 952,611 7,279 29.52 1,113, 863 7, 271 29.50 1,110,951- 16.30 mm 2,888,922 28,325 5,378,918 8,055 28.11; 1,529,702 8, 3112 29.115 1, 581,116 39.96 0&6 11,872,391; 30,018 10,578,31;3 8,812 29.36 3,105,199 8,831; 29.1;3 3,113,102 39.58 1101 3,913,321 30,632 9,158,968 8,506 27.77 2, 513, 356 9,012 29.12 2,69h,588 311.86 111/ I 5, 392.1169 36.565 13,558, 302 10, 788 29.50 11,000,161; 10, 728 29.311, 3, 977, 9142 311.59 DAL 7,928, 382 56,651; 21,783,163 16,879 29.79 6,1;89,887 16,169 29.07 6,332,331 26.17 BI‘IF 7,168,519 57,957 20,760,197 15,952 27.52 5,713,966 16,812 29.06 6,032,801; 18.01 NNA 111,191,1;17 78,01;7 112,879,022 23,166 29.68 12,727,667 22,1;70 28.79 12,316,018 22.1;2 CAP 13,1;16,1;1;8 129,161; 1;1,629,557 36,997 28.61; 11,921;,01;1 36,308 28.11 11,702,068 12.81; M 32.689, 716 156,930 113,209,302 113,233 27.55 31,188,162 113.5148 27.75 31,815,527 7.90 ELL 30,767,208 238,369 111,866,572 62,333 26.15 29,252,797 63,573 26.67 29,831;,809 3.81; UAL 15,210, 767 256,802 160,013,326 70,171 27.32 13,723,619 67,817 26.12 12,275,866 11.36 AAL 1;7,351,6118 372,251; 187,616,016 90,926 21;.1;3 85,826,503 92,651; 21;.89 1;6,697,616 1.71; Notes: Column 1;: Column 3 x average miles of traffic haul. Notes (continued): Column 9: (See Chart 11; .) Column 5: Column 7 divided by average miles of Column 10: Column 8 1: average miles of traffic haul. (See Chart 13 .) traffic haul. Eguation "1": Column 6: Column 7 divided by column 1;. (See Chart nu) [29.88; - (0.000013238¢)(Tons originatedfl [Tons - 1,325] [Haul] Column 7: Residual "l—Gflfl“ : Ground and Indirect Column 11: Column 12 divided by tons Expense reported, less Component B of originated. (See Chart 15.) calculated GM Expense. Column 12: Residual "2-G3rl" " Ground and Colman 8: Column 9 x column 3. (See chart 13 .) Indirect Expense reported, less Component A of calculated G&I Expense. (56) Residual " 2—C&I" $1,321,286 1,111, 851 1,3141, 9221 1.3016776 1,359,292 1,218,733 1,111,527 1,596, 0;]. 1,121,715 1, 816,399 1, 711;, 380 1,27h,189 932,399 2, 965, 301 651,032 caIcuLation of COMPOIENF B Per ton Calctflated Calculated originated: Residual "2—G&I" : G811 Expense: 1‘1 51;2 287 System Components 5‘ stem _ T8ns + 8,11%] (col. 13 x tons) A and B Carrier 132) (13) (11;) (15) (16) $66.01; $1,251,722 25 2,851,771 CONT 65.55 1,253,880 2,1101;,288 COL 1;6.20 1,339,015 5,719,969 m. 11.63 1,359,220 2,913,366 181 39.81 1,367,195 11,180,297 cas 39.19 1,369,965 8,061,553 MCA 31.05 1,392,305 5,370,217 ‘8/1 23.59 1,108,195 7,770,826 DAL 23.13 1,810,583 7.273.387 BNF 1.1.18 1,1;92, 107 13,198,875 CAP 9.31 1,501,28h 32,916,811 TWA 6.21; 1,5111, 1111 31,389,220 EAL 5.81 1,517,188 113.792.6111 UAL 11.05 1,525,115 1;8,222,761 AAI. Column 13: Calculated rate per ton Notes (continued) : Column 111: originated : [W (See Chartl‘j .) Column 13 1: tons originated nation " 2" : Column 15: 1 [Tons 4. 1191K” [Tons originated] Sum of columns 10 and 11;. TABLE 19 (See Charts 16, 17) CAICUIATION OF CCMPONENTS A AND B OF ABCRAFT OPERATING EKPENSE'FOR MIESTIC TRUNK AIR CARRIERS Equations "3" and "8" Related to Reported Aircraft Operating Eirpense‘ (Residuals "ll-A0" and "2-A0") (Based on data for 12 months ended September 30, 1989) AIRCRAFT OPERATING EXEI‘BE: Conponent B, Eguation "8" Calculation of coupoufifiibh AIRCRAFT OPERATING EXPEBBE : Congonent A, Equation " 3" Calculated Calculation of CCMPONENT A Residual " 2—AO" Residual " 2—AO" : Calculated Calculated Divided by System Calculated Calculated Residual "LAO" Residual Re sidtnl ratio of ($6.85 per ton Residual "2-AO" A0 Expense: ' Reported Per e 10. 97¢ per $1, 1103.51 per "1—AO" : " 1-AO" per Tons lifted Ratio originated x the divided by Components Carrier A0 Expense" System of Haul ton-mile mile of Haul System mile of Haul System Tons ori gim'ted squared ratio squared) the ratio A and B Carrier (1) (27 (3) (U (5) (5) (7) (8) (9) (13) (11:) (15) COM‘ $5 1, 992, 398 3 l, 213, 070 8 3, 237 8 767 , 558 3 518: 036 9b 1, 285, 590 8 3, 1183 33 706, 808 $ 28 8, 1:93 6.0025 8 779, 328 3 318, 093 $ 2,061» 913 CONT 001 1,637,773 1,032,105 3,935 550,830 368,181 918,571 3,502 719,202 338,513 8.6225 605,668 281,706 1,528,239 001 NAL 5,219,158 2,773,211 8,573 1,927,961 851,088 2,779,089 8,583 2,880,109 695,188 12.3201 2,885,987 696,851 5,228,996 NAL NEA 2,053,882 1,000,278 5,267 680,191 266,527 986,718 8,985 1,106,728 510,011 8.7089 1,053,168 885,329 1,999,882 NEA 0&5 2,870,868 1,920,838 5,850 1,327,627 898,597 1,822,228 5,171 1,088,680 521,711 8.0801 950,826 872,889 2,772,650 0&6 MGA 2,1115, 506 1,878,077 h, 9113 1, 1116, 6811 1119,6119 1,566, 333 5, 239 879,173 1137,1100 11.01101 967 #129 1481, 308 2, 533, 762 MCA W/ I 3,515, 31:1 2, 13h, 213 5, 891 1, 663, 336 520, 1122 2, 183 , 808 5, 889 1,331, 53 610,795 11.7521; 1, 331, 128 610,609 3,518, 936 W/ I DAL , , 2, 935,093 7,631; 2, 571, 95h 539, 650 3,111, 6014 8,093 2,668, 9112 1, 022, 583 6. 8121 2, 885, 853 1, 090, 212 5, 957,05? DAI- BNF 5,7 83, 253 3, 77h, 28? 10, 537 2,141.17, 005 502, 737 2, 989, 7’42 8, 235 2, 833, 511 1, 305, 765 11.7089 2,008, 966 925, 791 ’4, 958,708 BNF NW1 9,328,808 6,886,889 11,738 8,968,758 771,088 5,735,882 10,880 3,592,966 1,589,808 5.1076 2,881,959 1,275,203 8,617,801 NWA GAP 9, 358, 856 h, 937, 199 15,319 11,719,753 1152, 351 5,172, 1011 I6, Oh? Lt, 686, 752 2, 020, 152 5.38211 11, 921, 657 2,121,110}; 10, 093, 761 CAP TWA 28,811,096 15,185,392 21,050 12,760,597 1,012,892 13,773,089 19,092 10,638,007 3,680,971 8.3521 9, 225,708 3,192,285 22,998,793 TNA EAL 26,853,891 15,002,823 31,968 12,893,178 658,667 13,151,881 28,028 13,702,050 5,131,858 7.1289 11,851,868 8,838,752 25,003,309 EAL HAL 28, 236, 970 17,1112, 360 27, 915 17, 850, 008 8711, 527 18, 721;, 535 30,051 9, 512, 1135 3, 366, 81:3 6.0516 10, 828,610 b, 1100, 2118 29, 589, 1’45 UAI- AAL 33,725,718 22,281,226 88,129 20,818,578 707,369 21,525,987 82,710 12,199,771 5,781,882 8.8521 11,888,892 5,882,887 33,010,839 AAL * Aircraft Operating Immense data here exclude flight Notes (continued) : Column 6 : $1, 803.51 per average mile of Notes (continued) : Column 9: Residual " 2—AO" = Aircraft Operat- equipnent depreciation and rentals. traffic haul. ing Expense‘I reported, less Compo- calculated A0 Expense! Column 7: Sum of columns 5 and 6. nent A of calculated A0 Ebcpenser Notes: Column 3: Residual "1—A0" = Aircraft Operating uation "3": Column 10: (See Chart 17.) Expense‘reported, less Component B of @1037} (Ton-miles plus Column 12: nation "8": . [$6.85 (Tons originated) Ratio of m )2] Column 8: Column 3 divided by average miles of Column 8: 'Column 7 divided by average traffic haul‘. (See Chart 16.) miles of traffic haul. Column 13: (See Chart 17.) (See Chart 16.) Column 11;: Sum of columns 7 and 12. ( 55 ) mmeo (See Chart 18) CALCULATION OF COMPONENTS A AND B OF GROUND AND INDIRECT EXPENSE FOR DOMESTIC FEEDER AIR CARRIERS Equations "1" Reported G&I Carrier ense ll) FLA WIS EMF CHA MON ROB TEA WCA RDA EAL SWA Notes: 8 198.908 530.292 1418,1117 692.656 728,828 52mm 1.019.257 671.161 917.267 1.1479317 1.097.172 (Based on data for 12 months ended September 50, 1919) GROUND AND INDIRECT EXPENSE: ComRonent A4L Equation "1" 60mm Calculated Residual "1_G&III Residual Traffic (27.o7¢ per "l-GficI" ton—miles ton-mile) (3) (h) (57 3 ~L7,681 180,887 $ 1:53.966 125.703 lab—1.681 119.563 ”380172 7151237 1939615 256,067 903,810 21.1»661 272.239 855.5h9 231.056 67.891 577.895 156.1436 992.668 1.087.140? 29h.361 211L572 881.812 238.715 1:60.678 1.728.990 h68.038 1.023.228 2.979.919 806.672 @0583 2.215.019 607.193 Column 3: Residual ”l-GaI" - lbtal Gch Expense reported, less Component B of calculated GdaI Expense. Colmnn 5: Euation "1": £27.07}! (Ton-miles)] (56) GROUND AND INDIRECT EXPENSE: Component B, Equation "2" comm Calculated Residual Residual "2-G&I" ”2-621" _._..(.6.)..____ $559.9h2 $1456. 589 1:60.729 1.66.589 2214.802 1.66.589 M7395 I456. 539 197.772 166.589 568.0% 456.589 751;.896 LL56. 589 h32,hh6 “568589 1419.229 LL56. 539 673 s 1’45 1456. 589 1:89.979 1456.589 Notes (continued) a Column 6: Residual "2-G&I" . Total 68:1 and "2" Related to Reported Ground and Indirect Exmnse (Residuals "l-GacI" and "2-GacI") Calculated (‘2ch Expense: Components A and B 3 505. 555 576.152 650.201; 701.250 687.616 613,025 750.950 695.3% 921+.62? 1,263,261 1,063,782 Carrier FLA MON ROB TIA WCA PAL SWA Ezgpense reported, less Component A of calculated GacI Expense. Column '7: Equation "2": $456,589 per carrier. Column 8: Sun or columns 5 and '7. 86 CALCULATION OF COMPONENTS A AND E OF AIRCRAFT OPERATING HiPEI‘BE-Fé FOR DOMESTIC FEEDER AIR CARRIERS Equations "3" and "4" Related to Remrted Aircraft Operating Expense* (Residuals "l—AO" and "2—A0") (Based on data for 12 months ended September 30, 1949) AIRCRAFT OPERATING EXPENSE: Component A, Equation "3" TABLE 21 (See Chlrts 19, 20) AIRCRAFT OPERATII} EXPENSE: Component B, Residual “l—gO" Eguation "4“ Col. TS $549.30 Calculated COMPONENT B: Flight. Adjusted Adjusted per adjusted 26.4093 Per COMPONENT A: Residual "l-AO" Calculated Calculated Reported miles Flight miles ton-miles Fligt mile adjusted Calculated per adjusted Residual "2—A0": A0 Ebcpense*: 10 For less (Unadjusted (col. 6 x Per ton-mile: Residual "l-AO“ Flight mile Residual $7.26 per Components Carrier meme)“ System station 27.5 less 27.5) Tom lifted) station System System (col. 9 4- col. 10) Jar station "2—A0" ton lifted A and B Carrier (1) (2) (3) (4) (5) (6) (7) (8) (9T— (10) (11) (12) (13) (14) (15) (16) FLA 3 254,173 8 225,431 $20,758 $1,141 18.2 72.051; 8 9,997 $108,567 $3 19,022 8 127,589 8 646 $126,584 8 28,742 3 156,331 FLA WIS 508,752 464,8'B 29, 572 649 45.6 275,606 25 ,048 393 ,755 72 ,760 466, 515 651 42 ,237 43 ,879 510,394 WIS EM? 415,989 321,987 21,595 777 27.8' 359,954 15,271 227,691 95,028 322,719 779 93,270 94,002 416,721 EMF cm. 669,492 591,955 42,556 744 57.2 610,896 31,420 437,052 161,277 598,329 752 71,163 77,537 675,866 CHA MON 664,657 586,881 36,818 705 52.2 559,219 28.673 457,048 147,634 604,682 727 59,975 77,776 682,458 MON ROB 463,336 404,174 47,945 1,102 43-5 354,482 23,895 201,435 93,583 295,018 805 168,313 59,162 354,180 ROB TTA 1,080,500 990,411 46,695 776 60.2 747,022 33,068 701,372 197,214 898,586 704 181,914 90,089 988,675 111 WCA 461,101 345,544 23,036 829 27.8 442,493 15 ,271 229,065 116,818 345,883 829 115,218 115,557 461,440 WCA PDA 1,183,780 1,049,818 53,782 810 66.4 1,225,213 36,474 5 711,972 323,456 1,035,428 799 148,352 133,962 1,169,390 PDA PAL 1,362,072 1,118,143 46,648 762 61.2 2,056,259 33,617 805,799 542,852 1,348,651 919 13,421 243,929 1,592,580 PAL SKA 873,995 547,273 22,803 1,018 22.4 1,008,067 12,304 295,296 266,130 561,426 1,044 312,569 326,722 888,148 , SW1 * Aircraft Operating Ehcpense data here exclude flight equipment depreciation and rentals. Notes : Column 3: Residual "l-AO" : Total 40 Expensev‘? reported, less Component B of calculated A0 Expensei“. Column 4: Column 3 divided by number of stations. Column 5: Column 4 divided by average interstation flight distance (Flight) less 27.5 miles. (See Chart 19.) Notes (continued): Column 7: Column 8: Column 9: Column 10: Column 11: Tons lifted x Flight less 27.5 miles (column 6) = Adjusted ton-miles. $549.30 x column 6. Column 8 x number of stations. 26.40¢ 1: column 7. Sum of columns 9 and 10. Eguation " 3" : [26.40515 (Tons lifted) (Flight — 27.5)] pIUS[$549.30 (Flight - 27.5) (Stations)] (57) Notes (continued) : Column 12: (Column 11 divided by mmlber of stations) divided by Flight less 27.5 miles. (See Chart 19.) Column 13: Residual "2—A0"‘ Total A0 Expense* reported, less Component A of calculated A0 Expense}. (See Char-t 20.) Column 14: w [$7.26 Tons lifted)] (See Chart 20.) Column 15: Sum of columns 11 and 14. TABLE 22 Carrier FEEDFRS WIS CHA MON ROB TTA WCA PAL mums com cox. cos 11m w/I mu. NWA CAP TWA UAL TOTAL OPERATING EXPENSE* (reported) Ground Total and Aircraft G161 and A0 Indirect Operating“ Expenses* (2) (3) (h) 3 530.292 3 508.752 3 1.089.011: [115.1117 1:15.939 3311.106 692.656 6 .1192 1.362.168 723.328 .657 1.393.1135 5211.1180 1465.356 987.816 1.019.257 1.030.500 2.129.757 671,161 661,101 1,132,262 917,267 1 ,183,780 2, 101.0147 1,679,817 1,362,072 2,861,889 1.097.172 873.995 1.971.167 2192115335 1 {992.398 11.916.753 2.262.299 1.637.773 3.900.072 5.752.878 5.219.158 10.972.036 2.358.922 2 .053eb142 11.9142. 3611 6.672.596 2.870.866 7.563.258 3.913.321 2.616.506 6.358.827 5.592.669 3.515.561 8.907.810 7.923.382 5.7805116 13.708.928 72151115119 517830253 1259570802 111.191.1117 9.528.803 23,520,225 13,616,668 9.853.856 23.275506 3206891716 gush-111096 571100.812 30.767.208 25.853.891 57.621.099 [153110.767 28.256370 73 #177. 737 147.351.6113 33.725.718 81,077,366 SUMMARY OF CALCULATED OPERATING EXPENSES“ BY GROUP AND COMPONENT AND THE DEVIATION 0F REPQRTED FROM CALCULATED TOTALS Domestic Trunks and Feeders: Total Operating Expense" Ground and Indirect Expense Component A Component B Total (5) (6) (7) 8 119 563 8 1156.589 8 576,152 195:615 656,589 650.2011 266,661 456,589 701.250 231,056 456,589 687.665 156,156 456,589 613.025 296,361 456,589 750.950 238,715 456,589 5.3011 668,038 456,589 926.627 806,672 656,589 1.263.261 607,193 456,589 1.063.782 1,600,069 1,251,722 2,851,771 1,150,668 1,253,860 2,606,288 6.610.956 1.339.015 5,769,969 1.586.166 1.559.220 2.965.566 3.113.102 1.567.195 6.680.297 2.696.588 1.569.965 160611.553 3.977.962 1.592.305 5.370.267 6,532. 551 1. 638,695 7,770,826 6,032,806 1,660,583 . 7,673,387 12,3115;016 1,663,750 13,808,768 11,702,068 1,692,107 13,196,675 31,615,527 1,501,286 32,916,811 29,836,809 1,516,611 31,369,220 62,275,666 1.517.168 65,792,616 66.697.616 1.525.165 68.222.761 8! Operating Expense data here exclude flight equipment depreciation and rentals. Notes : Column 5: Column 6: Equation "1" (Cmponent A of calculated 6&1 Expense) for feeder air carriers: [ 27.0777 (lbn-aniles)] Equation "1" (Component A of calculated GM Expense) for trunk air carriers: [29.8% -(o.000013238¢) (Tons eriglnatedfl [Tone - 6,325] [Haul] Eguation "2" (Component B of calculated GM Expense) for feeder air carriers: 431156.589 per carrier Equation "2" (Component B of calculated GkI Expense) for trEE air car [ :31 562,287 ] ons+ . 6TB: Tons or iginated] Notes (continued): Column Column Column Column Ground and Indirect Expense (Components A and 3) Aircraft Operating Expenset (Components A and B) (Based on data for 12 months ended September 30, 1969) TOTAL OPERATING HPENSE‘I (calculated) Aircraft Operating Expense“ Component A 10: Part 1 Part 2 Total Component B Total (81 (91 (10) (11) ' (12) 8 72.760 8 395.755 8 666,515 8 65.879 3 510.596 95.028 227.691 322.719 911.002 616.721 161,277 1157.052 598.329 77.537 675,866 1117.631; . 1157.068 6014.682 77.776 682.1158 95.583 201.655 295.018 59.162 556.180 197.211; 701,372 898.556 90.089 988,675 116,818 229,065 365.885 115.557 661.1160 325.656 711.972 1.035.628 "133.962 1.169.590 512.852 805.799 113118.651 263.929 1,592,580 266.130 295.296 561,626 326,722 888,168 767.5511 518.056 1.285.590 779.328 2.066.918 550.1130 368.1111 918.571 605.668 1.526.239 1.927.961 551.088 2,779,019 2,665,910 5.2211996 680.191 266.527 966.718 1.053.161: 1.999.882 1 . 327.627 696. 597 1. 822 .2211 950.626 2. 772.650- 1.1116.686 619.669 1.566.553 967.629 2.535.762 1,663,386 520,622 2,183,808 1,331,128 3,516,936 2.571.9511 539.650 3.111.601; 2.865.115} 5.957.057 2 .1167, 005 502 . 737 2. 969.7112 2. 008.966 b. 958.708 11,9614: 7511 771 1088 5 173518112 21801 1959 896170801 6,719.753 652.351 5.172. 106 11.921. 657 10.093 .761 12,760,597 1.012.692 13.773.089 9.225.706 22.998.793 12.149517); 658.667 13.151.861 11,851.le 25.003309 17.850.308 8711.527 18.726535 10.826.610 29.569.1115 2018185578 7070369 21,525: 7 11.11.8th1.92 3310100L’59 Sum of columns 5 and 6. Equation "3" partial (Part 1 of Component A of calculated 1.0 Expense*) for feeder air carriers: [26.6o¢ (Tons lifted) (Flight-27.5)] artial (Part 1 of Component A of E nation "3" c%cfil:a't a 5 e A Expense) for trunk air carriers: [10. 97¢ (Ton-miles )] mted KEEP—oi? [:3569.3O(F11ght-27.5) [Stations] Equation "3" partial (Part 2 of Component A of cfieulated AC Expense) for trunk air carriers: [81.60561 (58) Sum of collmms 8 and 9. (Haul )] Equatioih" partial (Part 2 of Component A of for feeder air carriers: Notes (continued): Source: Total GM and A0 Exfinsev 3 1,086, 566 1,066,925 1.3775116 1.370.103 967.205 1.951.950 6.916.689 3 .928.527 10.976.965 6.963.268 75252.96? 6, 598.515 8,885, 183 13,727,853 12,1432. 095 22.626569 23 ,288,236 55.915.606 56.352529 73,3bla759 81,235 .200 [$6.85 (Tons originated) ( Column 12: Column 13: Column 11: Deviation of reported fi' an calculated Operatin Expenset Hunt Fer ce‘EE "(157' _(11I1— 3 2.1198 '232a 519 'lL',968 25 .382 20 .611 390: 132 ”813L182 7a 030 ‘13 a9 52 19,237 Average deviation: 66 438.1455 -2.929 8811 90.311 '2393Ll-88 z: ,627 '18 0955 505. 707 1 , 095 ,656 42.952 1,185,208 1,268,570 155.978 455.851: Average dem' tion: 0.23 ‘21-79 -l.09 1.71 2.13 22.6.3 -2.12 -0.l.9 0.99 5033 Carrier WIS CEA MON ROB TTA WCA PAL CONT COL 0888 11011 w/I DAL BNF CAP TWA UAL Eguation "11" (Component B of calculated A0 Expense!) for feeder air carriers: 437.26 (Tons lifted )] Egnation "14" (Component B of calculated A0 Expens?) Sum of e olumns Tables 111-21, inclusive, and 31.1. for trunk air carriers: Tons lifted Ratio of Tom: originatedy] Sum of columns 10 and 11. 7 and 120 RATE PER TON-MILE CENTS 4O 36 32 28 24 20 0 RELATED TO REPORTED OPERATING EXPENSE* DATA FOR I2 MONTHS CHART 2| DOMESTIC TRUNKS GROUND AND INDIRECT EXPENSE: COMPARISON OF UNADJUSTED AND ADJUSTED TON-MILE RATES AS PRODUCED BY EQUATION "I'l IN Gal EXPENSE ENDED SEPTEMBER 30,l949 COMPONENT A EQUATION'W" 86 N /———RA TE PEI? ADJUSTED TON-MILE [29.88é'(0.0000/3238d/(7'0/VS ORIGINATED” #0 Aggg y 23 N /////// L LLSA I LP w 0 T A A P w E A A U L E / I I ' I L I l l ' I \N | I l' | MAX/MUM RATE -' 2132‘ 47' 98,958 TONS \RATE PEI? U/VADJUSTED TON'M/LE — I 0 20 40 60 80 , IOO I20 I40 I60 I80 200 220 240 260 280 300 320 340 360 380 *EXCLUDING FLIGHT EQUIPMENT DEPRECIATION AND RENTALS TRAFFIC TONS ORIGINATED (THOUSANDS) (59) SOURCE:SCHEDULEI CHART 22 DOMESTIC TRUNKS AIRCRAFT OPERATING EXPENSE: COMPONENT a EQUATION "4" TON-ORIGINATED VALUES PRODUCED BY EQUATION "4" IN AO EXPENSE" RELATED TO REPORTED OPERATING EXPENSE* DATA FOR I2 MONTHS ENDED SEPTEMBER 30, I949 II II ** RESIDUAL 4 TRAFFIC TONS ORIGINATED '20 I I | I _ I **TOTAL OPERATING EXPENSE * IIO -——» LESS CALCULATED GROUND ANDINDIRECT EXPENSE AND COMPONENT A OF AIRCRAFT OPERATING EXPENSE IOO I’DZ 9O 80 70 a Di-‘l rpm 60 'nzm 0 >22 50 l-PD r'oO pmz —\i \ >0: (D910 40 DOLLARS PER TON ORIGINATED 3O \ 20 I0 ( REFER use To CHART G. —— $6.85 0 I 2 3 4 5 6 7 8 9 IO U I2 I3 2 TONS LIFTED ) (RATIO OF TONS ORIGINATED SQUARE ROOT: I.oooo I.4I42 I.132I 2.0000 2.23m 2.4495 2.6458 2.8284 3.0000 3.I623 3.3I66 3.46M 3.6056 *EXGLUDING FLIGHT EQUIPMENT DEPRECIATION AND RENTALS SOURCE: SCHEDULE 4 (60) SCHEDULE 1 to Table 23 (See Chart 21) ANALYSIS OF EQUATION "1" OF CALCULATED G&I EXPENSE FC-R DOMESTIC TRUNK AIR CARRIERS Carrier Rate (Ranked in Per Tar order of adjusted unadjusted tons originated) t ens-mile ton-mi le 1 i 2 J I 3 5 com 29.65¢ 22.87;! COL 29.65 22.93 NAL 29.50 25.10 NEA 29.15 25-55 cans 29.113 25.72 MCA 29.142 25 078 W/I 29.31. 26.214 DAL 29.07 27.01 BNF 29.06 27.01; NWA 28.79 27.28 CAP 28 . 11 27.20 TWA 27.75 27.01 EAL 26.67 26.20 UAL 26.142 25 .98 ML 21;.89 211.61 Selected additional points of reference (See Chart 21 ) Tons I a 5 15 , 108 29.68 21 .18 9, 820 29.75 16.65 5,288 29.81 5.15 14.325 29.82 0.00 Notes: Column 2: Calculated rate of Equation "1" —- 29.88;! minus 0.000015238¢ per ton originated. (See Table 11;, column 9.) Column 3: Component A value (Equation "1") divided by unadjusted ton-miles. (See Table 23, column 2.) 1.6., based on Equation "1" the rate per unadjusted ton-mile is com- puted as follows: I: 129.88,! - (0.000015238¢) (Tons originated)_7[fons - h,325_7] ons originated Source: Based on Tables 11.; and 25. (61) SCHEDULE 2 to Table 2} ANALYSIS OF EQUATION "2" OF CALGJLATED G&I EXPEIBE FOR MMESTIC TRUNK AIR CARRIERS Carrier (Ranked in Calculated Residual "2“ order of tons rate per ton per ton originated) originated originated CONT 866.04 866.04 COL 65.55 64.06 NAI. 46.20 46.10 REA 41.63 41.60 08.3 39.81 42.44 W/I 34.05 34.60 DAL 23.59 23.28 BNF 23.13 31.25 NWA 17.77 31.05 CAP 11.18 11.08 ‘IWA 9.31 16.66 ELL 6.24 11.47 UAI. 5.81 6.33 ML 4005 3064 Notes: Column 2: From Table 1h . Calculated rate: 81 542 287 [re-M, . 1 Colman 3: From Table 11; . Residual "2" = Total Operating Expense-i reported, less calculated A0 EXpense-l less Component A of calculated 6&1 Expense. mta shown are computed by dividing each carrier's Residual "2" by its total tons origimted. (See Chart 6 .) Source: Based on Table 114. See also Table 25. SCHEDULE 5 SCHEDULE L. to Table 23 to Table23 (See Chart 22) ANALYSIS OF EWATION "4'' OF GALGIIA'ED A0 mam ANALYSIS OF EQUATION "3" OF CALCULATED A0 EXPENSE* FOR NESTIC THINK AIR CARRIERS FOR DOMESTIC TRUNK AIR CARRIERS Carrier Calculated (Ranked in order or Constant rate ‘ Rate per ton Residual '4' ton—mile ratio of tone lifted Ratio per. ton originated originated per ton- rate _t_°. tone originated Ratio squared 1: ratio of l 1 ratio2 originated converted) Carrier “T13”""'" 72‘) (3) (II) (5) b) L'UT‘" (Ranked in Rate per ton-mile (cents) order of Haul m 3.51 12.3201 $6.85 $84.39 334-29 13-925- tons ori inated) Constant differential Total NA 2.89 8.3521 6.85 57.21 64.56 7.93 1%) (2) (3) III) EAL 2.67 7.1289 6.85 48.83 54.06 10.40 DAL 2.61 6.8121 6.85 46.66 46.35 12.14 CONT 10.97 7.140 18.57 UAI. 2.46 6.0516 6.85 41.45 41.97 6.65 COL 10.97 7.3L. 18.31 NAL 10.97 11.811 15.81 CONT 2.45 6.0025 6.85 41.12 41.12 11.14 m 10.97 11.30 15.27 on 2.32 5.3824 6.85 36.87 36.77 11.44 0&8 10.97 8.09 15.06 m 2.26 5.1076 6.85 34.99 1.8.26 6.37 w/I 2.18 4.7524 6.85 32.55 33.11 8.78 MCA 10.97 11.01 111.98 mm 2.17 4.7089 . 6.85 32.26 40.38 9.01 w/I 10.97 3.83 16.10 DAL 10.97 2.30 13.27 REA 2.17 4.7089 6.85 32.26 9.23 16.” BNF 10-97 2.25 13.22 001. 2.15 4.6225 6.85 31.66 30.18 12.07 NWA 10.97 1.70 12.67 MI. 2.11 4.1.521 6.85 $.50 $.08 6.05 0&5 2.01 4.0401 6.85 27.67 ”.30 7.85 CAP 10.97 1.05 12.02 1101 2.01 4.0401 6.85 27.67 20.82 9.26 TWA 10.97 0.87 11.814 EAL 10.97 0.58 11.55 UAL 10.97 0.5}; 11.51 Notes: Column 2: From Table 36, column 10. 7 ML 10°97 0037 11.311 Column 3: Squaw or the ratio in column 2. (Tfitble 15) Column 4: See Equation "4" for calculated Component B of A0 Expense-l. (See Chart 8.) Column 5: Column 4 multiplied by column 3. (See Chart 22.) Column 6: Residual "4" = Total Operating Expense!- reported, less calculated 0&1 Expense, less Component A of calculated A0 Expenseil'. (See Table 15.) mt: shown above are computed by dividing each carrier's ReSidual "4" by its total ton: originated. (See Chart 22.) Column 7: Column 5 divided by average miles citrattic haul. Notes: 001mm 2: See Table 15. Source: Based on Tables 15 and 23. Column 3: Based on the rate of $1,193.51 per mile of average traffic haul. Ton-mile differential computed by dividing $1,103.51 by number of tons originated. See Table 15. ' Column 11: Sum of columns 2 and 3. Equation "3": [10.97% (Ton-miles)_7p1us [11,003.51 (Haul) _7 Source: Based on Tables 15 and 23. (62) TABLE 23 (See Schedule: 1, 2, 3, 11) CAUJULATED OPERATING EXPENSE, CGIPAPED 011 A T01‘1-1.‘1IT-_1E BASIS WITH EPORTED OPERATING EXE‘INSE’ (Based on data for 12 months ended September 30, 19119) Deviation of total Carrier (Ranked in Total calculated Total reported reported iron order of total Calculated Gui-I Expense per ton—mile Calculated A0 Exgense' per ton-mile operating Expense‘ Operating Expense‘ calculated Operating calculated ton-mile Equation "1" Equation 77271 Total Equation W Equation WI" Total Her ton-mile per ton-mile Expense'laer ton-mile expense, col. 111) W838 ""2251? Amount Rafi Amount Rafi Amount Rank Amount Rank Amount Rafi Amount Rank _Amoun$ Rank Amount Percent Carrier (IT (2) 2T3 ‘01)“ T5)" 761““ ?T7 781— T9T 716)" (117 712T“. 0‘73 "017‘ “(‘5'1‘1 0‘6)" (17) (18) (19) (20) FEEDERS WIS 27.071! xxx 103.375: 1 13011.3 1 105.621! 1 9.91111 5 115.56¢ 1 2116.001! 1 2116.57¢ 1 0.57¢ . 0.23 WIS ROB 27.07 xxx 79.01 2 106.08 2 51.05 6 10.211 11 61.29 6 167.37 2 170.93 3 3.56 2.13 ROB MON 27.07 xxx 53-119 11 80.56 11 70.85 3 9.11 6 79.96 3 160.52 3 163.26 11 2.711 1.71 LION TTA 27.07 xxx 111.99 7 69.06 7 82.611 2 8.28 8 90.92 2 159.98 11 195.86 2 35.88 22.113 TTA 01111 27.07 m 50.52 6 77,59 6 66.20 11 8.58 7 711.78 11 152.37 5 150.71 5 -1.66 .1.09 01111 mp 27.07 xxx 63.811 3 90,91 3 115.12 a 13.111 2 58.26 7 1119.17 6 116.66 8 42.51 -21.79 mp 7101 27.07 3°C! 51.77 5 78.811 5 39-22 9 13.11 3 52.33 9 131.17 7 128.110 6 -2.77 -2.12 WCA m 27.07 xxx 26.1.1 8 53.118 8 59.88 5 7.75 10 67.63 5 121.11 8 121.52 7 0.111 0.3. PDA PAL 27.07 xxx 15.32 10 12,39 10 115.26 7 8.19 9 53.115 8 95.811 9 95.37 9 -o.l47 -0. 9 PAL 51111 27.07 m 20-36 9 ' 1.7.1.; 9 25.03 10 111.56 1 39.59 10 87.02 10 87.88 10 0.86 0.99 301‘. TRUNKS m 25.55 11 21.92 2 117.117 2 15.27 11 16.98 1 32.25 1 79.72 1 79.71 1 -o.01 -0.02 mm COL 22.93 111 211.99 1 117.92 1 18.31 2 12.07 11 30.38 2 78.30 2 77.73 , 2 -0.57 -0.72 COL c0111 22.87 15 17.89 3 110.76 3 18.37 1 11.111 6 29.51 11 70.27 3 70.27 3 0.00 0.00 com 1101 25.78 9 13.10 11 38.88 11 111.98 6 9.26 8 211.211 6 63.12 11 60.83 5 -2.29 -3.63 11011 101. 25.10 12 7.62 7 32.72 9 15.81 3 13.92 2 29.73 3 62.115 5 62.113 11 -0.02 -o.o3 m. 088 25.72 10 11.30 5 37.02 5 15.06 5 7.85 12 22.91 9 59.93 6 60.68 6 0.75 1.25 0215 W/I 26.211 6 9.18 6 35.112 6 111.110 7 8.78 10 23.18 8 58.60 7 58.75 7 0.15 0.25 1.7/1 111. 27.01 11%: 6.13 9 33.111 8 13.27 8 12.111 3 25.111 5 58.55 8 58.117 8 —0.08 -0.111 DAL BNE' 27.011 3 6.116 8 33. 5° 7 '13. 22 9 9.01 9 22.23 10 SS .73 9 58.00 9 2. 27 11.07 BM“ CAP 27.20 2 3.117 10 30.67 10 12.02 11 11.1111 5 23.116 7 511.13 10 511.10 10 —0.03 —o.06 0112 m 27.28 1 3.23 11 30.51 11 12.67 10 6.37 111 19.011 13 119.55 11 51.97 11 2.112 11.88 ' mm m 26.20 7 1.33 12 27.53 13 1.1.55 13 10.110 7 21.95 11 119.148 12 50.60 12 1.12 2.25 EAL TWA 27.01 11% 1.29 13 28.30 12 1.1.811 12 7.93 11 19.77 12 118.07 13 119.09 13 1.02 2.12 NA 01.1 25.98 8 0.93 111 26.91 111 1.1.51 111 6.65 13 18.16 111 115.07 111 115.16 111 0.09 0.19 UAL AAL 211.61 13 0.80 15 25.111 15 11.31: 15 6.05 15 17.39 15 112.80 15 112.72 15 -0.08 -0.19 ML * Operating upense data here exclude flight equipment Notes (continued): (2) Equations for calculation of expenses for Notes (continued): (3) Deviation percentages shown in column 19 are depreciation andrentals. trunk air carriers are as follows: identical with those computed on the basis of total . - eder calculated expenses'. Computed on the basis of ton- NOW. £152. fiifimuimascgmfon of expenses for fe 0&1 EXEEl‘SE ' mile expenses, calculated and reported as shown above, ' Eguation "l": the deviation percentages :70 a few carriers may differ, G&I WISE ovun‘ g to round' 3 to 100 of 1 percent. Egmtion Ill": [2908“ -' (0.000033238¢) (Tons Originated)3 [T013 - 141,325] [Haul] lng ’ up 1:27.071! (Turmflesn E nation «2": Equation "2": [Wlfi‘om originated] £56,589 per carrier A0 EXPEDBEI- A0 EXPEIVBEH' nation "3" : Equation "3": WMesfl plus [$1,103.51] [(11301)] [£126.18 TTo‘ns" lifted) (Flight - 27.5) plus 5119.30 (Flight .. 27.5)] [Stations Fmtion "11": Tons 1127.8 d 2] E nation "11»: ‘1” ' “‘5 meimted) (Ratic °f m) Source- 8.... on 8.1.1. 22. [1357.25 (Tons lifted)] ( 63 ) TABLE 21. COMPARATIVE SUMMARY OF REPORZIED AND CALCULAIED OPERATING EXPENSE* ON IWO-GROUP EXPENSE BASIS Domestic W5 and Feeders: Ground and Indirect Expense Aircraft Operating Expense”l Total Operating Ebcpensenr (Based on data for 12 months ended September 30, 1919) Percent of total calculated Operating Expenseee Reported Calculated Reported Galeated Aircraft Ground and flbtlfl Aircraft Ground and Aircraft Ground and lbtal Aircraft mound and Operating Indirect Operating Operating] Indirect Operating Indirect Operating Operating Indirect Carrier Expense} Expense Expense)!- Expense* Expense Egense-x- Expeme nee-1': EXpensex- Expense (1) (2) (3) (h) (5) (b) (77 (8) (9Y 710) (11) mamas WIS 508,752 8 580.292 81.086, 51.6 8 510,391. 8 576,152 1.6.82 5.1.1 100.00 1.6.97 53.03 EMF 1.15.989 1.18.1117 1.066.925 1.16.721 650.201. 38.99 39-% 100.00 39.06 60.91. CHA 669.1492 692,656 1,377,116 675,866 701,250 1.8.61 50.30 100.00 119.08 50.92 MON 661.,657 728,828 1,370,103 682,1..58 687,615 1.8.51 3.20 100.00 119.81 50.19 ROB 1.63.336 5211.11.80 967.205 5%.180 613,025 1.7.90 511-25 100.00 36.62 63.53 m 1.080.500 1.089.237 1,739,625 980,675 750.950 62-11 60-32 100.00 56-83 113-17 VGA hb1.101 671.161 1.3.56.7th 1871.11.13 695,301. 39.86 58.02 100.00 39.89 60.11 Pm 1.185.780 917.867 2,091.,017 1.169.390 9a.,627 56.53 1.15.81 100.00 55.811 1.1..16 P“- 1.362.072 1.L:.79.817 2,855,531.11 1,592,580 1,263,261 1.7.69 51.82 100.00 55.77 1.1..23 5“ 875.995 1.097.172 1,951,930 888,11.8 1,063,782 1.1..78 56.21 100.00 1.5.50 56.50 Total . 7.683.671; 8.159.311? 15,666,052 7,739,852 7,926,200 Arithmetic average 1.5.18 52.05 100.00 17.51. 52.116 mums CONT 1.992.398 2.9212335 116916.689 2.098.918 2.851.771 1.9.52 59.1.8 100.00 1.2.00 58.00 COL 1.637.775 2.862.299 5.928.527 1.528.239, 2.14011.288 1.1.69 91.99 100.00 58.80 61.20 NAL 5. 219. 158 5.752.878 108714.965 5.221.996 5.7L19 .969 L17. 55 52d»? 100.00 117 .61 52- 39 MA. 2:053:14 '2 238889922 11,916,2LIB 189993882 2,9L13,566 [11054- 5861411 100000 1.10ch 9909-1- 085 2.870.861. 4.1172591. 7.252.911? 2.772.650 h.1180.297 39.58 61.67 100.00 38.23 61.77 MGA 2,115,506 3,913,321 6,598 315 2 533,762 1. 061. 553 37.06 59.31 100.00 38.110 61.60 11/1 3.515.361 5.392.169 8.8851183 3:51110936 513701217 39.56 60.69 100.00 39.56 60.1.1. DAL 5.780.916 7.928.582 13.727.883 5.957.057 7.770.826 112.11 37.75 100.00 1.3.39 56.61 BNF 5.783.253 7.156.569 12.832.095 1.958.708 7.673.387 1.6.52 57.55 100.00 39.89 60.11 1111 9,328,808 111,191,417 22,1.26,569 8,617,801 13,808,768 1.1.60 63.28 100.00 38.113 61.57 GAP 9.858.856 15.uJb.bh8 23 288 236 10,093 761 13 191. 1.75 1.2.33 57.61 100.00 . 66 gig 2.111.096 32.689.716 55:9151601. 22.9983793 3219163811 1.3.66 58.1.6 100.00 133% 553287 M 89.853.891 30.767.208 56,352,529 25.003.309 31.31.9220 17.65 511.60 100.00 1.11.37 55.63 MI. 2?.230.970 h5.£L'0.767 73.51-11.759 29.949.11.15 115.792.6114 38.50 61.69 100.00 140.29 59-71 35.725.718 117.351.6118 81.233.200 35.010.L159 118.222.761 1.1.52 58.29 100.00 1.0.61. 99,36 T0151 165.713.620 226 31.6 753 386 217 71.9 159 821.. 96 226 ,- Arithmetic average ' ’ ’ ' ' 5 .395 955 1.12.09 58.59 100.00 111,10 58,90 * Operating Expense data here exclude flight equipment depreciation and rentals. Source: Based on Tables 1 2 See also Table 25 0 ° 0 (64) REPORTED OPERATING EXPENSE* REMTED T0 CALCULATED OPERATING EXIEBSE-Yc IN ERCEMGE DISTRIBUTION BY ACCOUNT CIASSIFICATION Domestic Trunks and Feeders: Ground and Indirect Expense Aircraft Operating Eiqaensese Total Operating Expense-)6 (Based on data for 12 months ended September 30, 1919) Reported Aircraft Operating Expense* Total Reported 10 Reported A0 Expense* as percent Operating Expense* as of calculated AO Expense* Expenseeas percent of ifiying Direcff percent of calculated Opera- Mainte- calculated Total tions, name- Operating Operating excluding Flight Carrier Expense* Egpense* Total rentals Egpipment (17 (2) (3) (1} (5) (6) FEEDERS E“? 78.21 38.99 99.82 70.17 29.35 CHL 98.91 [48061 99006 66.07 320 99 MON 101.71 18.51 97.39 70.91 26.18 ROB 102.13 17.90 130.82 79.13 51.69 TIA 122.13 62.11 109.29 61.11 18.18 “CA 97.88 39.86 99.93 71.51 25.12 IDA 100.31 56.53 101.23 63.11 38.12 £11 99.51 17.69 85.53 60.06 25.17 SM 100.% 1114078 980141 680:3 29090 fitAverege 100.23 18.18 102.12 67.39 31.73 TRUNKS CONT 100.00 10.52 96.19 71.85 21.61 COL 990 28 W69 107015 71091 350511 ML 99097 [#7055 99089 62011-8 370111 NBA 99.98 11.51 102.68 67.31 35.31 0&6 101.25 39.58 103.51 73.61 29.93 RCA 96.37 37.06 96.52 76.51 20.01 w/I 100.25 39.56 100.01 82.17 17.51 DAL 99.86 12.11 97.01 68.63 28.11 N11 101.88 11.60 108.25 77.70 30.55 CA 99.91 12.33 97.67 68.50 29.17 TWA 102.12 13.66 106.11 77.20 28.91 EAL 102.25 17.65 107.10 71.78 35.62 HAL 100.19 38.50 95.56 69.76 25.80 AAL 99.81 11.52 102.17 69.75 32.12 “'Average 100.68 12.09 102.50 72.60 29.90 * Operating Expense data here exclude flight equipment depreciation and rentals. ” Arithmetic average. Reported Ground and Indirect Expense as percent of calculated total Operating Eigense* 53.11 39.22 50.30 53.20 51.25 60.32 58.02 13.81 51.82 56.21 52.05 59.18 57.59 52.12 58.11 61.67 59.31 60.69 57.75 57.55 03321)! 57.61 58.16 51.60 61.69 58.29 58.99 Ground and Indirect Expense Reported G&I Expense as percent of calculated G&I Expense Traffic Advertis- Ground and Indirect around Mainte- Passenger and Total Operations nance Service sales (6} (9) (10) (I1) (12) 100.72 50092 17.35 1000 11.18 61.35 21.10 9.16 5.36 10.11 98.77 31.19 15.81 9.85 11.50 105 099 ’45020 114.009 9067 12.56 85.56 30.31 9.08 5.27 19.82 139.72 15.01 20.60 11.19 20.65 96.53 13.69 8.82 6.76 10.35 , 99.20 25.22 11.68 10.15 21.96 117.11 38.21 11.81 13.96 23.85 101.11 36.86 13.23 8.21 15.99 102.51 31.11 17.29 11.00 15.13 91.09 23.51 15.32 12.58 16.58 100.05 29.92 18.37 10.71 18.31 98.15 29.12 18.39 9.08 17.37 99.82 33.73 13.16 13.19 18.81 96.28 32.11 10.75 11.17 21.99 100.11 29.15 12.36 11.02 19.97 102.03 30.53 12.61 13.18 22.12 95.73 30.17 13.73 12.78 19.28 102.77 28.68 20.26 11.21 20.16 101.68 36.11 10.82 11.17 21.23 99.31 25.15 11.20 13.93 22.66 98.11!- 28.111 130111 12061 19030 103.31 28.89 15.85 13.59 19.61 98.19 30.16 15.01 12.31 18.37 09.50 29.83 11.79 12.01 19.11 ( 65 ) ing and Publicitz 2.85 2.27 3.28 1.11 3.60 90 13 1.35 7:82 6.85 5. 10 6.55 1.38 7.18 6.18 5.51 5.18 5.51 7.25 5.06 1.27 7.70 6.16 8.19 ho30 5.99 6.02 Source: General and Adminis— trative 21.92 10.51 22.12 16.23 11.15 20.95 19.31 18.07 15.03 17.50 17.58 17.69 20.05 12.81 11.50 12.19 13.20 17.30 13.88 12.05 13.18 11.11 11.36 13.96 15.78 12.81 11.37 Deprecia- tion —- Ground Property & EguiEment 2350 2.78 1.72 3.80 3.33 11.86 3.22 2.12 3-15 6.35 1.11 3.77 1.61 2.39 3.21 2.63 1.88 1.80 2.13 2.66 1.11 2.58 2.55 2.26 5.29 3.51 3.07 TABLE 25 Carrier EKP MON ROB TIA WGA CONT COL “/1 Based on Tables 1 2, and 31. See also Tables 21 and 33. TABLE 26 0011111180111. TRAFFIC TOHIIES BY CLASS FOR THE DOMESTIC AIR CARRIERS Distribution of Volume: Scheduled and Nonscheduled ————‘_ Reduced—Fare and other Passenger Excess Baggage Express Freight (12 months ended September 30, 19119) Scheduled operations Can'ier . Passenger (Ranked in order .of total Total Total excluding calculated ton-mile commercial coach— and Coach- and Nonscheduled c expenseie) ton-miles Total Total family—fare family-fare Excess baggge ress Freight operations arrier (1) (h) (5) (6) (7) 585 (9) (10) was WIS 1123 6119 123,619 1101 952 1101 952 - 2 019 19 678 - - W13 ROB 561:702 555,1162 538:560 526:176 12,3811 1:212 ’ .. 15,690 6,210 203 MON 827,055 827,055 718,272 701,928 13,311 3,113 19,393 85,977 m MON 111 1,021,168 1,023,121; 987, 81,0 983,520 11,320 3,129 17,832 111,323 1,311 m GHL 863,602 858,226 755,328 738,816 16,512 11,355 31,867 66,676 5,376 c1111 EMF 6917, 620 671,868 656,160 6311,176 21, 9811 3,025 12,683 - 22, 752 EMF 1701 872,159 865,631 851,9011 851, 9011 - 1,732 11,995 - 6,528 WCA rm 1,699,190 1,693,826 1,597,728 1,533,600 611,128 12,127 311,131 119,537 5,661 1111 PAL 2,890,528 2,827,552 2,718,816 2,686, 91111 31,872 111,197 28,1130 65,809 62,976 PAL SM 2, 192,516 2; 156: 8011 2, 027’ 136 1: 911: 6’48 135’ I488 6: 369 311»: 51411 83.9 755 35: 712 SM 1301113 11111 6,111,161 6,101,369 5,790,111 5,163,166 326,688 17,835 85,796 207,591; 9,792 NEA 00L 11,921,807 11,903,667 11,708,032 11, 708,032 - 35,1109 59,221, 101,002 18,110 COL 0011 6,785,555 6,596,011? 6,101,661; 5,615,520 186,111; .091 97,529 317,763 189.508 00111 1101 10,132,091 10, 0611, 795 9,1163, 680 8, 772, 8611 690, 816 78, 723 199,362 323,030 67,296 110; mu. 17,019,966 16,893,922 15,099,936 15,099,936 - 306,182 507,727 979,777 156101111 1m. 0118 11,563,131: 11,532,318 10,301, 928 10,301,928 — 98,978 537,672 590,710 30,816 c116 11/1 1h,6116,200 13,861,332 12,817,8211 12,508,512 309,312 93.11116 317,101 602,961 7811,868 WI m. 22,517,862 22,1180,996 19,712,781; 19,712,781. - 213,553 732,589 1,762,070 361866 nu. BNE‘ 21,251,087 21,033,876 18,967,200 18,165,600 501,600 1311,627 812,827 1,119,222 217,211 BNF GAP 112,000, 718 110,710, 701 32,3811,6110 25,382,880 7,001,860 195,572 1,661,132 6,169,357 1,290,017 CAP 1111 112,826, 796 12,619,916 36,139, 968 28,116, 8611 8, 323,101, 315,915 1,637,028 11,251,005 182,880 1m 711. 109,011,897 108,153,5116 95,521,821 95,178, 720 113,101 1,509,531 3,558,819 7,863,372 558,351 mu. m 107,209,611 106,231,012 88,338,912 76,299,711 12,039,168 1,022,1189 5,110,761 11,758,850 978,629 1711 m 152,357,130 151,168,977 121,166,016 109,159,680 11,706,336 1,198,139 6,1123,827 22,680,995 888,153 m. m 180,7lh,55h 180,179,567 113,792,511 127,730,100 16,062,11111 1,719,695 5,319,301 29,318,027 5311,98? m. 11- Excluding flight equipment depreciation and rentals. Notes: (1) Data covering coach- and family-fare passenger Notes (continued): Owing to lack of adequate information, traffic (column 6) were obtained from special reports of the carriers to the C.A.B. In some instances, owing to lack of 1‘qu reporting for the period, it was necessary to estimate some portion of reduced-fare traffic. promotional-fare passenger ton-miles other than coach- and family-fare traffic, are included in the totals in colunn 5. NA - Not available. Source: Form 171 reports, and special reports, submitted by carriers to CJ.B. (Reduced-fare data. furnished by Analyses Division) (66) TABLE 27 OWNERSHI- TRANSPORTATION REVENUES BY CLASS FOR THE MEETIG AIR. CARRIERS Distribution of Volume: Scheduled and Nonscheduled ____._____.__..__ Reduced-Fare and other Passenger Excess Baggage Express Freight (12 months ended September 30, 1919) Scheduled operatiom Carrier Total Passe era (Ranked in order of total commercial Total exc uding calculated ton-mile transportation coach— and Coach— and Nonscheduled expenseeQ revenue Total Total fanfiJy—fare family-fare Excess W ress F‘re ht operations Earrier (l) 2 235 (h) ' (5) (6) (7) (g? (10) (1'55 FEEJJERS ms 8 215,903 8 215,903 8 236,118 8 236,118 8 - 8 1,516 8 7,939 8 - 8 - WIS ROB 120,716 117,637 109,183 171 m 1,020 - 7,131 3,109 ROB MON 111,515 131,085 103,111 397,672 5,769 2,101 7,830 20,110 7,160 MON TTA 500,159 199,578 183,939 182,550 1,389 2,615 5,969 7,055 881 TBA CH9. 159,630 1157, 895 1127, 229 120, 362 6,867 2, 773 11, 930 15, 963 1, 735 CHA mP 310,510 298,035 292,180 281,913 7,537 1,611 3,911 - 12,175 EMF 1ch 516,169 510,598 533,011 533,011 - 1,226 6,331 - 5,571 Wm 1711 1,037,921 1,032,798 998,552 966,656 31, 896 8,206 11,112 11,628 5,123 PM 1211. 1,558,871 1,532,280 1,192,260 1,179,038 13,222 10,125 10,101 19,191 26,591 PAL 5m. 1,133,881 1,111,003 1,059,133 1,013,619 15,781 3,610 15,132 35,528 19,881 sum TRUNKS mm 1,038,131 1,033,111 3,903,073 3,729,661 173,112 17,901 38,111 71,026 5,023 NM 001. 3,119,155 3,137,862 3,015,136 3,015,136 - 21,099 23,562 11,765 11,293 001. com 3,786,607 3,686,058 3,535,157 3,321,050 211,107 23,313 37,728 81,860 100,519 CONT 101 6,023,699 5,987,166 5,786,982 5,198,556 288,126 18,250 70,895 81,339 36,233 MCA mu. 10,271,636 10, 260, 393 9,691, 383 9,691,383 - 209, 786 135,929 220, 295 11,213 NM. 015 6,801,116 6,780,056 6,381,097 6,381,097 - 77,989 180,712 137,258 21,390 086 77/: 8,716,322 8,160,861 8,133,706 7,992,761 110,915 60,319 111,863 151,976 255,158 w/I m 13,188,313 13,176,037 12,122,977 12,122,977 - 151,121 222,607 376,032 12,276 1m. BNF 12,153,039 12,022,877 11,100,017 11,173,720 226,297 107,051 258,318 257,191 130,162 137m GAP 21,325, 871 20,831,685 18, 761,566 15,788,530 2,976,036 108,171 512,130 1,119,515 191,189 GAP 1m 22,507,287 22,131,901 20,751,907 17,213,891 3,511,016 171,070 566,098 939,829 75,383 1m m 65,873,169 65,739,868 61,950,711 61,932,083 18,661 973,813 1,263,660 1,551,651 133,301 EAL NA 57,836,638 57,113,695 52, 923, 822 17,516,513 5,377,309 621,121 1,711,169 2,151,283 122,913 m m. 79,110,871 78,681,521 71,707,192 66,175,508 5,531,981 756,175 2,121,551 1,099,003 156,317 m1 AAL 93,189,685 92,955,366 ,611, 77,360,259 7,251,298 976,th 1,811,370 5,523,292 2311.319 ML * Excluding flight equipnent depreciation and rentals. Notes: (1) Data covering coach- and family-fare passenger Notes (continued): (2) Owing to lack of adequate information, revenue (colmnn 6) were obtained from special reports of the carriers to the G.A.B. In some instances, owing to lack of full reporting for the period, it was necessary to estimate some portion of reduced-fare revenue. promotional—fare passenger revenues, other than coach— and family-fare, are included in totals in column 5. NA - Not available. Source: Recurrent Resorts. C.A.B. Speci-aI repoRs submitted 11v carriers to C.A.B. (Reduced-fare date furnished by Analyses Division) ( 6'7 ) SCHEDULE 5 to Tables 28 and 29 Carrier TRUNKS (1939-19119) AAL BNF CAP Cch C 0L 0 ONT DAL EAL MCA NAL NEA NWA TWA UAL w/I Average (arithmetic) Converted averagefi/ FEEDERS (1915-19149) cm EMP MON PAL PDA R OB SWA TTA WCA WI S Average (arithmetic Converted averag a AVERAGE PERCENTAGE RELATI ONSBIP L-F FLI Gri'l‘ EQUIPMENT DEPRECI ATI ON AND RENTALS TO AIRCRAFT OPERATING EXPENSE Flight equipment depreciation as percent of total reported A0 Expense 1939 - 19119 Flight equipment depre- ciation and rentals, for 12 months ended 9/30fl49 Flight equipment rentals for 12—m0nths ended 9/30fl19 ll-year Li-year 12 months Percent of Percent of average average ended reported reported 1939-19119 19116—1919 9(30é119 Amount 1.0 Expense Amount 10 Ekpense (27 (3) (5) (6) (7) (8) 18.92 21069 19011 $7,969,956 19.1]. $ 2.571 * 16.62 18.22 15.52 1,062,710 15.52 - - 16.92 17.1.2 13.52 1,626,621 111.16 73,253 0.61. 17.00 17.98 13.11 153,351 1i.11 — - 19.711 20.60 13.93 272,676 1 .27 6,510 0.311 18.50 19.87 17.63 126,122 17.63 .. - 15.59 15.611 15.65 1,109,059 16.10 30,912 0.15 17.38 18.60 17.65 6,120,811 19.30 51,7,562 1.65 17.118 17.01 17.211 519.121 18.35 33,128 1.11 19.86 21.17 17.31 1,095,519 17.35 2,213 0.011 21.86 211.13 22.25 587,571; 22.25 - - 23.05 26.56 20.82 2,520,676 21.27 53,761 0.15 17.00 17.15 16.36 5.219.089 17.70 595.6311 1.311 20.72 23.09 25.112 9.950.338 26.06 2112.515 0.611 20.86 23.70 23.35 1,096,685 23.78 19,911 0.1.3 18.77 20.19 17.92 18.110 0.1.7 23.11 25.3 b 21.83 22.55 o.h'71’/ Full-period 2-year 12 months 1: avzrige c 1 ZBverafiec endefi hroug 9 9 ~19 9é30§ 9 (9) (10) 111.76 111.13 12.88 118,325 15.02 8.935 1.11. ' 21.211 15.95 .87 72,795 111.89 120 0.02 20.03 19.1.6 19.18 157,707 19.18 - - 16.011 15.97 111.1.1 229,919 11.1.1.1. 500 0.03 10.511 10.511 10.96 170.953 12.62 22.14614 1.66 16.27 16.27 16.68 92,911. 16.71 167 0.03 26.91 26.39 26.16 309,717 26.16 . - 9.511 9.55 11.17 135,831 11.17 - - 22.82 25.09 25.611 158,980 25.61. — - 13.50 13.50 15.51 93.1462 15.52 61. 0.01 17.17 16.69 16.85 17.11. 0.29 20.73 20.0 b 20.26 20.69 0.292/ ( 68 ) * 0.006 percent. Note: References to the year 1919 should be understood as the 12 months ended September 30, 19149. Other years shown are calendar years. (See source Table 29.) y Converted average indicates the percent role.- tionship of depreciation and/or rentals expenses to A0 Expense excluding flight equipment depreciation and rentals expenses. (Computation example for percentage conversion: 18.77 +81.23 = 23.11) , y The h—year average for reported depreciation, plus the 19L9 figure for reptrted rentals, provides the basis for the calculation of those expenses. (See Table 26.) For the trunks, an estimated 25.75 percent of cal- culated A0 Expense* is used (Table 28), based on the sum of the 25.30 and 0.117 percent figures above; for the feeders, an estimated 20.30 percent of calculated A0 Expense* is used (Table 28) based on the sum of the 20.03 and 0.29 percent figures above. The higher average for the trunks, as well as the substantial deviation of in- dividual carriers from the average,“ is doubtless largely due to the age composition of the equipment fleets. Per- centages based upon replacement values would substanti- ally exceed.the averages shown above, and it seems prob- able that the feeder average would exceed the trunk average. 3/ See notes on Table 29 regarding short-term operatims of some carriers. Source: Tables 29 and 3h. GAMBIATB‘D FLIGHT EQUINE“? DEPRECIATION AND RENTALS CONSOLIDATED WITH OTHER CALCULATED EXPENSE VALUE AND RECONCILBD WITH REPORTED FIGURES OF THE CARRIERS (Based on totel reported Operetins Expense dete. for 12 month- ended September 30, 1%9) Operating: Expense inoludin Fli Eguipgent Depreoidtlon dud Rentele TABLE 28 (See Schedule 5) Flight Equipment Depreoi ed on md Rentele Total mount er ton-nile Tereont 7131. 2 plan Col . 1.; Elm devietion cal euleted eeleul eted of reported all other All other Percent deviation Totel Per tow-mile from Total n ( Tabl es 1 Total Total 1e (Tabl e 23, Total Col. 7 from Col. 7 from Currier Reported 0&1 euleted fiported ColouTeted oeleuleted reported and 2) eeleul eted reported 001 . 111) on]. euleted col. 8 col. 9 Carrier T21 (31 (h) (5) (61 (7) (8) (91 (10) (11) (12) U31 (1111 (15) MKS 111. 0 7.969.956 0 8. 500. 188 11.20% 11.1181! 43.21. 0 59,017,322 8 89.203. 156 8 89. 733. 388 116.92% 1.7.00; 1.7.23; -o.17 -o.76 m. “F 10062. 7180 1.276. 867 14.76 5.72 '16-'77 114.000. 51-12 15.14914. 835 13. 708.962 62076 60-149 61 .115 3-75 2-13 BE? CAP 1. . 2. 999. 1143 3.78 6.011 67-142 24,901,925 21.9111. 857 25. 887. 579 57-88 57-91 60.17 ~0-05 “-3.81 CAP 08:3 1:35. 351 713.957 5-58 5.90 -39-50 7. 776.609 7. 686.298 7. 966.9011 611-26 63.51 65.83 1 .17 -2.39 08:3 COL 272,676 392.192 5.113 7.62 -30.53 1.1.172, 7148 11,201,203 11,321,019 83.16 83.73 86.12 -0.68 c3.h3 COL CONT 1126,1122 531, 716 6.10 7.60 o19.80 5, 31.13, 155 5, 31.13, 111 5.1.1118, 1.105 76.37 76. 57 77.87 0.00 4.93 (DNT nu. 1.109.059 1. 533.9112 11-73 6.511 ~27-70 11;. 517.987 114. 836.9112 15. 261.825 65-20 63-28 65.09 ~0-13 -2'.91 DAI- m. 6.1120. 811 6.108.352 5. 63 5.65 -0.27 611,081,910 62,773,31u) 62, 790. 881 56.23 55.11 55.13 2.02 1.99 . m. IICA 51.9.1121 652.111; 5.26 6.21. 45.79 6,908. 2148 7. 1117.736 7, 250. 799 66.09 68.38 . .3.35 1.72 1101 HAL 1,095, 51.13 1, 3145,1436 6.23 7.66 -18. 57 12, 067, 579 12, 070, 508 12, 320.1101 68.66 68.68 70.11 -0.02 -2.05 m. N“ 587. 5714 5114.970 9.118 8.31 111.10 5. 529.958 5. 530. 822 5.1158. 218 89-19 89-20 88-03 -0.02 1.31 m m 2. 520. 676 2.219.081; 5- 57 11-90 13.59 26,010.90]. 211.9147. 2145 211.6115. 653 57-514 55-12 514.145 11.38 5-66 m m 5. 219.1439 5.922. 189 b» 51 5-09 -11.56 62. 350. 301 61. 165. 093 61. 837. 793 $.60 52. 58 55-16 1.914 0-83 m HAL 9.950.333 7.608.905 6.11 14.68 30.77 3.133.075 83. 292.097 80.950.6614 51.21 51 . 18 119.75 0.16 3.06 1m: “/1 1.096. 5 .096 7.23 5.97 21 .17 10.0011. 195 9.981. 368 9.790.279 65-98 65-33 614.57 0-23 2-19 I/I Totel 140. 571. 362 141. 1511.781 5.11 5.21 “1090 11.30.151.755 1426. 539. 111 1427. 372. 530 5110117 53-98 514-03 0-90 0.72 Average devletion 20.23 1.20 2.61 FEEDERS 0!“ 113.325 157. 201 13.09 15.18 43.76 1.100.117} 1,195,111 1, 5111, 317 163.80 165.116 167. 55 -1.00 -2.23 cm HIP 72. 795 8h. 59h 10.18 11-83 45.95 907. 201 1,139,720 1,151, 519 126.811 159.3 5 161.00 -2o.1v,o -21.22 up no! 157. 707 138. 539 18.117 16.23 13.81. 1. 551.192 1, 527,810 1, 508,612 161.73 178.99 176.75 1. 53 2.82 11011 m 1705953 2379386 9.89 13073 ‘27099 20 272,000 2,2614,97O 2,351,110} 131.14]. 151.00 1514.814. 0031 “2055 m PAL 229,919 3511.032 7.71 11.21 -31 .17 3,071, 808 3,085,760 3 , 189,873 103.08 103. 55 107. o 5 -0.b,5 -3-70 PAL ROB 92.91114 71, 899 16.08 12.1111 29.27 1,080, 760 1,060, 1119 1,039 ,101; 187.02 183.155 179 .81 1.91:. 11.01 R08 3111 309,717 180, 291. 13.81 8.01. 71 .78 , .8814 2,261,617 2,132,221], 101.69 100.33 95.06 0-85 0~97 sn MA 135, 831 200, 701 12.119 18.16 -32. 32 2, 265, 588 1,87 5,156 1.910, 326 208.35 172.117 178.1114. 20.80 16-76 1n 1101 158,980 93,672 18.03 10.62 69.72 1,291,212 1,315,721, 1,250,116 11.6.1.3 1119.20 1111.79 -1.86 5-26 I01 1718 93.1162 103, 610 21.16 23.116 -9.79 1. 182, 506 1,180,008 1,190,156 267.73 267.16 269.16 0-21 “3-61: us TMI 1. 9100653 10 5810928 12-1-11 12075 '2061 17138306§$ 17,206,685 17821-170980 11100014 158.61 158095 1'05 0‘79 Ave rege devietion 31 . 36 1.1. 91;, 6. 112 Hotel : Colunn 3 1 See Tabl e 29 end Schedule 5 -. Co-puted an A Note- (continued): Column 71 From Tabl c 31.1, 0.01 mm 2. Notee (continued) I Column 13: Identioel with pereent 001m: 1.; end 51 percent of edleuleted A0 Expense“: 25.75 percent for trunks, 20.30 percent for feedere. Cola-no 2 end 3, respectively, divided by reported ton-miles. Column 9: Columns 10, 11, and 12: (69) Sum of column 3 above end columns 11 from both Teblee 1 and 2. Column 7, 8, md 9, reepeotzlvel‘y, divided by reported ton-milee. Source: Column 111: devietion of column 10 Iron eolum ll. Identioll with peroent deviation of column 10 from column 12. Tables 29 and 314, and Schedule 5. TABLE 29 Page 1 of 1 (Sec Schedule 5) FLIGHT EQUIHIENT iDEPR‘z-‘JCIATIOI‘Ir EXPENSE IN RELATION TO TOTAL AIRCRAFT OPERATING EXPENSE REPORTED BY THE DCMESTIC AIR CARRIERS SA 2 unks 1939 - 1919 AMERICAN BRANIFF CAPITAL c 8: S Depreciation—- Depreciation-«- fieprecmtion— Depreciation-- Total Fligh_t Euipment Total Fli t ui ment Total Flig ht Eguigment Total fight Eguigmrrt Aircraft Percent Aircraft Percent of Aircraft Percen o Aircraft Percent 0 Calendar Operating total Operating total Operating total Operating total ar Expense Amount A0 Expense Immense Amount A0 nse Expense Amount .fl ense Expense Amount A0 use {15 (2) (3) (1) (S) (6) (8) (917 (117 (12) 1939 8 6,257,299 131,036,533 16.57 8 955,011 8 139,519 11.61 8 986,396 1 136,676 13.86 8 398,511 :3 58,713 11.73 1910 8, 159,133 1, 166, 167 17 .31 l, 185, 157 199, 623 13 .11 1,511, 001 210, 671 15 .62 539, 399 37, 033 6. 87 1911 10,152,167 1,889,531 18.08 1,983,117 267,123 13.18 2,166,571 111,979 16.70 800,076 125,010 15.63 1912 8,036,118 1,118,181 11.29 1,161, 286 221, 608 15.31 1,638, 278 251, 321 15 .31 731, 951 130,033 17.69 1913 7, 823,187 819, 318 10.17 1, 325,153 166,610 12.58 1,191,681 177,183 11.83 799, 858 107,770 13.17 1911 10,318,705 739,836 ' 7.17 1,623,210 172,630 10.63 1,980,827 289,318 11.61 995,512 112,209 11.29 1915 11, 513,197 1,393, 850 9.58 2, 717, 273 335,715 11.01 3,727,561 581, 753 15.69 1,805,178 297,758 16.19 1916 26, 381, 691 1, 911, 973 18. 73 1, 396, 136 721, 961 16.12 8, 136, 886 1,765,555 20. 93 3, 709, 296 7 87, 090 21. 22 1917 31, 816,108 8,298,790 23.82 5,795,873 1,500,270 25.89 9,701, 911 1,956, 981 20.16 3,329,781 720,881 21.65 1918 10,187, 818 9, 898, 813 21.15 6,035,132 918,399 15.22 9, 996, 935 1,625,392 16.26 3,311, 815 513,591 1551 19195/ 11,695,671 7, 967, 385 ' 19.11 6, 815,993 1, 062,710 15.52 11,185,177 1, 553, 368 13.52 3, 301, 215 133, 351 13.11 n-year average, 1939 - 1919 18.92 16.62 16.92 17.00 1—year average, 1916 - 1919 21.69 18. 22 17 .12 17.93 COLONIAL CONTINENTAL DEIII‘A EASTERN ' Depreciation-- Depreciation— Depreciation— Depreciation— Total Flight Enigma, Total Flight Equi ment Total Fliggt Equigfit Total Fgfl Equigment Aircraft ercent 0 Aircraft Percent of Aircraft rcent 0 Aircraft Percen 0 Operating total Operating total Operating total operating total Ebcpense Amount A0 Meme nse Amount A0 nse Expense Amount A0 Expense Expense Amount A0 We (15) (16) . (17) E18) (195 (21) (22) (23) (21) (25) 1939 b/ b/ 8 219, 510 53 16,275 21.08 $5 120, 862 8 7 1, 132 16. 90 $3 3, 121, 595 $3 511, 231 15. 91 1910 B/ B/ 350,868 51,529 11.69 623,831 95,633 15.33 1,172,936 509,669 11.39 1911 3 310,897 $ 38,751 11.37 513,566 102,766 18.91 861,592 87,860 10.20 5,833,198 937,017 16.06 1912 321,713 77,716 21.15 517, 811 110,529 21.31 797,016 113,670 18.03 1,985, 872 875, 251 17.55 1913 328, 929 71, 353 21.69 519,785 88, 568 16.11 805, 737 126,591 15.71 1,339,903 799,779 . 18.13 1911 163,201 82,150 17.80 715,028 96,987 13.02 1,112,678 153,316 13.78 5,222,672 661,156 12.72 1915 687,135 95,770 13.91 1,210,135 158,171 13.07 1, 905, 393 328,121 17.23 7,119,011 601,069 8.11 1916 1,575,771 353,167 22.13 1,871,523 380,518 20.30 1,672,590 766,231 16.10 11,911,169 2,223,135 11.91 1917 1, 613,561 151, 720 27 .67 1, 813, 7 83 123, 917 23 o 37 5, 137, 791 933, 019 17 .16 21, 298, 763 1, 971, 801 20.17 1918 1,513,332 291,021 19.13 1, 981,080 376,157 19.00 6,013,570 822,611 13.68 31,668,110 6,305,353 19.91 19192/ 1,910,119 266,166 13.93 2,118,820 126,122 17.63 6,889,605 1,078,117 , 15.65 33,271,702 5,873,219 17.65 ISL—year average, 1939 - 1919 19.712/ 18.50 15.59 17.38 1—year average, 1916 - 1919 20.60 19.87 15.61 18.60 ( 70 ) Cabndar 17% 1939 1910 1911 1912 1913 1911 1915 1916 1917 1918 19195/ 1939 1910 1911 1912 1913 1911 1915 1916 138 19193/ mm 29 Page 2 of ‘8 (Sec Schedule 5) FLIGHT EQUIPMENT DEPPECIATIOI‘I 1001311313 IN RELATION TO TOTAL AIRCRAFT OPERATING EXPENSE REPORTED BY THE DOMESTIC AIR CARRIERS gAz Trunks 1939 - 191:9 MID-CONTIBENT NATIONAL I\10RTHEAST NORTHWEST Depreciation—- Depreciation— Wreciation-- Depreciation— Total Flight Equi ment Total Flight Eguimnt Total 31$ ht gguipmerrt Total Flight Equipment Aircraft Perm of Aircraft Percen of Aircraft Percen of Aircraft Percen of Calendar Operating total Operating total Operating total Operating total Calendar ear Expense Amount A0 Expense Expense Amount A0 E3903nse Expeme Amount A0 Expense Expense Amount A0 nse ar (’2) (3) (11) (S) (6) (7) (8) (97 (10) (11) (12) (E; El?) 1939 9» 305,779 '33 52.230 17.08 32 1711,372 5.3 25,9711 111.90 $3 199,11011 $ 36,652 18.38 $ 1,81h,8h1 is 301,538 16.62 1939 19110 h80,l70 86,119 17.91; 260,098 33,309 12.81 , 231,936 32,611 11.07 2,212,821 107,729 18.13 19110 19111 716,037 132.1171 18.50 111111302 611,336 111.118 1111,1153 55,390 12.55 2, 211,5511 3911, 888 17.86 19111 1912 188,613 96,803 19.81 150,692 52,035 11.55 352,681 52,023 11.75 1,958,781 272,301 13.90 19112 19113 529,911, 87,511 16.51 615,867 79,169 12.85 109,729 70,111 17.11 1,611,778 190,113 11.56 19113 19111 827,912 131,735 15.91 933,081 133,386 111.30 1156, 291 111,601 9.78 2,623,966 212,583 9.21 191111 19115 1,328,556 276, 9511 20.85 1,5 711, 252 230,179 111.61; 1,025,158 165,013 16.10 11,007,581 555,h99 13.86 1915 1916 1,925,782 376,560 19.55 3,815,111 762,132 19.83 2,389,786 573,901 21.01 7,839,761 2,020,626 25.77 191:6 19117 2, 233,8113 351,201; 15.86 5,183,673 1,263,235 21.37 2,532,988 758,199 29.93 9,198,282 2,727,132 29.65 19117 191.8 2,879,223 160,011, 15.98 1,796,068 1,115, 367 23.88 2,356,819 1711,076 20.12 11,878,926 3,611,717 30.10 19118 191192/ 2, 991,927 516,293 17.21 6,311,701 1,093,330 17.31 2,681,016 587,571; 22.25 11, 8119,1181; 2,166, 915 20.82 191192/ Lil—year average, 1939 - 19119 17.118 19.86 21.86 23.05 h-year average, 1916 - 19119 17.01 21.17 211.13 26.56 WA 1anle WESTERI-I/INIAND TOTAL, domestic trunk air carriers Depreciation-- Depreciation— Depreciation— Depreciation—- Total Flight E ui ment Total Flight Equi merrb Total Flight Equigment Total Flight E ui rrt Aircraft Percent of Aircraft Percent of Aircraft can of Aircraft Percent of Operating total Operating total Operating total Operating total Expense Amount A0 Expense Expense Amount A0 Expense Expense Amount A0 Expense Expense Amount A0 Expense (15) (16) (17) (18) (19) (20) (21) (22) (23) (7211) (25) (26) 1939 3 11,071,027 3: 872,666 21.12 .63 5,673,069 $1,2118,211 22.00 :3 1,086,337 sf; 181,836 16.711 $525,987,079 3 11,752,186 18.29 1939 1910 5,589,301, 967,765 17.31 7,103,262 1,292,226 17.15 1,1011,th 102,219 9.26 3h,75h,33o 5,522,686 15.89 1910 1911 7,370,171; 1,501,595 20.11 8,326,352 1,151,358 17.13 1,181,197 199,118 13.11 11,272,853 7,662,523 17.31 19111 19112 5,736,503 990,707 17.27 7,070,583 1,053,667 111.90 1,178,012 228,115 19.36 35,732,020 5,706,969 15.97 19112 19113 5 ,hh8,5 80 866, 569 15 .90 6, 677, 150 700, 968 10.50 1, 160, 316 208, 067 1?. 93 33, 653, 875 h, 559, 7110 13.55 19113 191111 6, 512,129 680,119 10,110 8,581,859 967, 5811 11.27 1,707,126 276,958 16.22 1111, 1311, 233 11,817,901 10.92 19111; 19115 10, 818, 868 1, 719,593 15. 89 21.1, 8611, 796 1, 907, 616 16.08 3,172, 206 1,86, 809 15.35 67, 837,183 9, 190,506 13.55 191,5 191,6 18,766,170 3,660,295 19.50 20,917,597 11,605,228 22.02 5,765,922 1,252,577 21.72 127,101,527 25,191,858 19.77 191.6 19117 22,718,7511 11,000,028 17.61 28, 516, 5711 6,205,885 21.76 5,951,6h2 1,668,111 28.03 163,202,630 36,210, 512 22.21 191;? 19118 27,9011,281 11,871,135 16.02 31,621,119? 7,711,258 22.27 11,316,181 902,632 20.77 189,790,817 39,533,926 20.83 1918 191192/ 29,660,585 11, 853,855 16.36 38,187,308 9,707,793 25.12 11, 612,026 1,076,771; 23.35 201,081,982 38,963,362 19.09 191192/ u-year average, 1939 - 19119 17.00 20.72 20.86 18.76 14-year average, 1916 - 19119 17.15 23.09 23.70 20.11, (71) TABLE 29 Page 3 of 1 (See Schedule 5) CHALLEMERS/ Depreciation— Total Flight Equipment Aircraft rcen 0 Calendar Operating total year Expense Amount A0 Expense (1) (27 (3) (h) 1915 xxx 1916 xxx .1917 as 256,721 3 16.710 18.19 19183/ 609, 813 88, 135 11.15 1919— 787, 81? l09. 390 13. 88 Full-period average, through 1919 11. 76 2—year average, 1918 - 1919 11.13 P101 h/ Depreciation—- Total 'Fl 1'. Equi nt Aircraft ce 0 Operating total Exxgnse Amount A0 Eggnse 1915 3 110,071 a 16,518 15 .01 1916 373,363 55,592 111.89 1917 897,181 151,195 16.85 1918 1,152,033 256, 851 17.69 1919a 1.591, 991 229,119 11.11 Full-period average, through 1919 16.01 2-year average, 1918 - 1919 15.97 WEST 00151.1/ Depreciation-— Total Fligt Egui‘argnt Aircraft Percent 0 Operating total nse Amount A0 E ense 2%;- 7’28)— 1915 xxx 1916 8 10.087 8 1. 997 19.80 1917 312,503 13,273 13.85 1918 626,099 153,702 21.55 19192/ 620,081 158,980 25.61 Pull-period average, through 1919 22.82 2dyear average, 1918 - 1919 25.09 FLIGHT EQUIHIEN‘I‘ DEPRECIATION EXPENSE IN RELATION TO TUI‘AL AIRCRAFT OPERATING EXENSE REPORTED BY THE DOMESTIC AIR CAREERS (BZ Feeders 1915 - 1919 KMPIREy mormHE/ Pmnrfowré/ Depre ciation-- Depze ciafion—a Depreciation-- Total Flight Equi :51th Total Flight Equi merrt Total Flight Equipment Aircraft Fercent of Aircraft Percefi of Aircraft - " Percent of Operating total Operating total Operating total Calendar Expense Amount A0 Expense Expense Amount A0 Expense Expense Amount A0 Expense ear (5) (6) (7R? (8) (97 (10) (117 (12) (131 ill) xxx m xxx 1915 $126,213 1 36,378 28.82 55 21,111 33 1,611 21.69 m 1916 513,281 119,155 29.06 621,068 133,187 21.11 xxx 1917 150,286 77,102 17.12 786,175 135,336 19.75 8 830,351 £3 81,822 9.85 1918a/ 188, 781 72, 675 11. 87 822, 361 157. 707 19. 18 l, 351, 733 118, 189 10. 96 1919— 21.21 20.03 10.51 15.95 190’16 1005!; ROBIIBONE/ soummri/ TRAIS-Jmsli/ Depreciation— Depreciation— Depreciation—- Total Flight Eguipment Total Flight Eguinment Total Flight Eguipment Aircraft Percent 0 Aircraft Percent of Aircraft Percent of Operating total Operating total Operating total Expense Amount A0 Expense Eagense Amount A0 Expense Expense Amount A0 Emense (187 (19) (20) (21) (2’57 (23) (21:7 (25) (267 xxx xxx xxx 1915 Jon: 5'5 31, 882 3} 8, 988 25.7? xxx 1916 m 929, 767 263, 016 28. 29 3 67, 256 $3 6, 175 9.18 1917 $5121, 835 $ 18,068 11.17 1,189,010 316,515 26.62 757,189 52,716 6.96 1918 / 556, 280 92, 777 16.68 1, 183, 712 309, 717 26.16 1, 216, 331 135, 831 11.17 19193 16.27 26.91 9.51 16.273/ 26.39 9.55 WISCOIxBIIllr—n/ TOTAL, domestic feeder air carriers Depreciation" Depreciation-— Total Fl' ht E ui nt Total Flight Equipment Aircraft krcent of Aircraft Percen Operating total Operating total Expense Amount A0 Expense Exnense Amount A0 Expense (30) (31) (32) C333 (31) (35) xxx 3 110, 071 53 16,518 15 . 01 1915 m 565,986 107,599 19.01 1916 m 3,597,780 792,711 22.03 191,7 $353,159 8 35,562 10.07 7,179,280 1,235,812 17.21 1918 602,211 93,398 15.51 9,221,307 1,508,383 16.35 19192/ 13.50 17.71 13.50‘3/ 16.73 ('72) FLIGI'LII EQUIPMENT DEPEECIATION EXPEI‘SE IN RELATION TO TOTAL AIRCRAFT OPERATING EXPEl‘BE REPORTED BY THE DOMESTIC AIR CARRIEFS §c_) Swmmry 01' Percentages: Trunks and Feeders 1131.329 Page 8 of ’4 (See Schedule 5) for 1939 and 1980 is not comparable to that for (later periods)."I c/ 9-year average, 198M989. g/ Passenger service inaugurated May 3, 1989; mail service inaugurated May 10, 1987. Formerly Essair, Inc. Angus? l, 1985. 1/ Scheduled services inaugurated September 19, 1988. 1/ Scheduled services inaugurated December 2, 1986. ( 73 ) Scheduled services inaugurated Calendar {ear 1939 1980 1981 1983 1988 1986 1987 1988 19895/ 1985 1986 138% 19893/ 1939 - 1989 TRUNK AIR CARRIERS Calendar Mid- ' 31‘ American Branii‘f Capital C & S Colonial Continental Delta Eastern Continent National Northeast Northwest TWA United Western/ Inland Total 63 (2) ' (3) (8) . (5) (5) 18) £9) (10) (11) (12) (13) TID— (13) (I7) 1939 16.57 18.61 13.86 18.73 E/ 21.08 16.90 15.91 17.08 18.90 18.38 16.62 21.82 22.00 16.78 18.29 1980 17.38 13.88 15.62 6.87 / 18.69 15.33 11.39 17.98 12.81 18.07 18.83 17.31 17.85 9.26 15.89 1981 18.08 13.88 16.70 15.63 11.37 18.91 10.20 16.06 18.50 18.88 12.55 17.86 20.81 17.83 13.88 17.31 1982 18.29 15.38 15.38 17.69 28.15 21.38 18.03 17.55 19.81 11.55 18.75 13.90 17.27 18.90 19.36 15.97 1983 10.87 12.58 18.83 13.87 21.69 16.11 15.71 18.83 16.51 12.85 17.11 11.56 15.90 10.50 17.93 13.55 1988 7.17 10.63 18.61 18.29 17.80 13.02 13.78 12.72 15.91 18.30 9.78 9.28 10.80 11.27 16.22 10.92 1985 9.58 18.08 15.69 16.89 13.98 13.07 17.23 8.18 20.85 18.68 16.10 v13.86 15.89 16.08 15.35 13.55 1986 18.73 16.82 20.93 21. 22 22.83 20.30 16.80 18. 91 19. 55 19. 83 28.01 25.77 19.50 22. 02 21.72 19.77 1987 23.82 25.89 20.16 21.65 27.67 23.37 17.16 20.87 15.86 28.37 29.93 29.65 17.61 21.76 28.03 22.21 1988 28.85 15.22 16.26 15.51 19.83 19.00 13.68 19.91 15.98 23.88 20.12 30.83 16.02 22.27 20.77 20.83 19892/ 19.11 15.52 13.52 13.11 13.93 17.63 15.65 17.65 17.28 17.31 22.25 20.82 16.36 25.82 23.35 19.09 Ill-year average, 8 1939 - 1919 18.92 16.62 16.92 17.00 19.783/ 18.50 15.59 17.38 17.88 19.86 21.86 23.05 17.00 20.72 20.86 18.76 «year average 1986 - 1989 , 21.69 18.22 17.82 17.98 20.60 19.87 15.68 18.60 17.01 ZL.17 28.13 26.56 17.15 23.09 23.70 20.88 FEEIER AIR CARRIERS Challe er ire Momrch Piedmont Pioneer Robinson Southwest Trans-Texas West Coast Wisconsin T0531 (I9; [(155) (EU (23) (28) (25) (26) (27) (297 1985 xxx xxx xxx xxx 15 .OJE/ m m _ xxx xxx 15.01 1986 xxx 28.822/ 21.693/ xxx 18.89 xxx 25.771/ xxx 19.803/ xxx 19.01 1987 18.193/ 29.06 21.88 xxx 16.85 xxx_ 28.29 9.185/ 13.85 xxx 22.03 1988 18.85 17.12 19.75 9.85§/ 17.69 18.871/ 26.62 6.96 28.55 10.073/ 17.21 19892/ 13.88 18.87 19.18 10.96 18.81 16.68 26.16 11.17 25.68 15.51 16.35 Full-period average, through 1989 18.76 21.28 20.03 10.58 16.08 16.27 26.91 9.58 22.82 13.50 17.71 z-year average, 1988 - 1989 18.13 15.95 19.86 10.58 15.97 16.27 26.39 9.55 25.09 13.50 16.73 a/ 1989 data cover 12 months ended September 30, 1989. e/ Scheduled services inaugurated September 28, 1986. k/ Scheduled services inaugurated October 11, 1987. _ From source: "Distribution of total expenses not 35/ Scheduled services inaugurated November 27, 1986. 1/ Scheduled services inaugurated December 5 1986. shown because classification of accounts used by the carrier E; Scheduled services inaugurated February 20, 1988. E/ Scheduled services inaugurated February 28 Source: Annual Airline Statistics of Domestic Carriers. (Several) CA.B. TABLE 30 CALCULATION OF RETIRE 0N IIMISMNT AFI‘ER ’BAJUS‘S W (Based on balance sheet data as of December 31, 19119, and operating Expense-11- data for 12 months ended September 30, 19119) REPORTED NET INVES'I'IEM CALCULATION OF 113T DNESTBEM‘ A0 Expense* and invesfilent in operating property and eguipnant Relation of reported in- operatinaEzqaensea- and working capital vestmnt in Relation of re- Reported in— operating carrier ported working vestment in property and Calculated net investment (Ranked in Total Total reported capital to cal- Calculated operating equipment to Investment order of total reported net Interest on calculated Operetta Reported worlc- culated Operat- Aircraft property and calculated in operating Total 0211- I rest on calculated ton- investment investment: Operating Expenses: ing ca ital at ‘ a E enseK- operating equipment at A0 Expense-x- Working property and culated Net i estment: mile e 6* at 12 At 9.677% Mensa- System 12 31/119 Percené 11035 Expensex- lzé3é€h9 (percent) capital eguimnent investment At 9.67711; carrier W (31 (M 1131 (6) (7) (U) (9) (12) (13) (1h) (15) 1135 FEEDERS ms 8 561,518 3 51,313 8 1,086,516 8 xxx 8 237,117 21.83 2.62 8 510,391 8 321,101 63.56 a 271,637 8 255,197 3 526,831 8 50,981 nus ROB 356,758 31,525 967,205 xxx -237,922 -21.60 -2.95 351,180 591,680 167.90 211,801 177,090 118, 891 10,538 13.03 1.1011 501,851 18,857 1,370,103 xxx 271,166 20.01 2.10 682,158 230,688 33.80 312,526 311,229 683,755 66,170 1101: T21 529,693 51,261 1,739,625 xxx 175,556 10.09 1.21 988,675 351,137 35.82 3 , 191,338 929,211 89,927 m cm 213,660 23,580 1,377,116 30:: 85,733 6.23 0.75 675,666 157,927 23.37 311,279 337,933 682,212 66,020 CHA 1‘3sz 533,687 51,6117 1,066,925 xxx 3112,93; 32-111 3.86 1116,73- 190,752 115.77 266,731 203,361 1175,092 115,977 FM? we; 858,681 83,098 1,156,711 xxx 518,079 117.38 5.69 161,110 310,605 67.31 289,186 230,720 519,906 50,313 1701 Pm 693,065 67,071 2,091,017 xxx 180,058 8.60 1.03 1,169,390 513,007 13.87 523, 501 g..=1,,695 1,106,199 107,215 1111 PAL 938,111 90,8 2,855, 8111 :66: 580,652 20.33 2.111 1,592,580 351,759 22.09 713,960 796,290 1,510,250 116,153 PAL an 929, 991 89, 999 1, 951, 930 xxx 6118, 65.0 33. 23 3. 99 888, 1118 281, 3111 31.68 1187 , 983 111111, 0711 932, 057 90,199 SW5. Totals and weighted averages 13, 321,731.91- :cc: 2, 987, 2138-11- 22.15.2391- 2.6§\1:«x- 7,739,852 3, 309,297 112.76 Relation of re— ported working capital to total reported Operat- ing Expense-x»: Séstem TRUMS Pcrccn lion 1M 11, 5 20, 613 1137,1173 11, 9113, 2118 14, 9112, 3611 1, 209, 765 211.118 2. 911 l, 999 ,882 3,310, 853 165.55 1, 235, 812 3, 999, 7611 S, 235, 576 506, 668 NEA COL 2, 259,158 218,657 3, 928, 527 5,280, 118 1, 367,006 26. 27 3.15 1, 5211, 239 872,152 57 .211 982,132 3,018,176 11,030, 610 390,058 COL 001m 3, 031, 35 5 293,356 1, 916, 689 1, 916,733 901, 721 18.10 2. 21 2,061,918 2,126, 6311 102.99 1,229,172 1,129, 836 5,359,008 518,613 com- 1.ch 2,127,717 205,908 6, 598,315 6, 358, 827 1,119, 853 22. 33 2.68 2, 533,762 707,861 27.91 1, 6119, 579 5,067, 5211 6,717,103 650,011 110.1 mm 6, 216, 991 601, 6113 10, 971, 965 12, 203, 191 991, 219 8.12 0. 97 5, 2211, 996 5, 225, 7115 100. 01 2, 713, 711 10,119, 992 13, 193, 733 1, 276, 810 1111. 085 5,3119, 795 517,721 7,252,911? 10301453757 11,166,281 141-147 11. 98 2, 772, 65° 13133, 5111 112.69 1: 8133237 5.5115,300 73358537 712,135 0&5 71/1 7,519, 827 730,627 8,885,183 8,907,810 718,070 8.06 0.97 3, 5111, 936 6,831,757 191.56 2,221,296 7,029,872 9,251,168 895,273 77/: DAL 9,090, 9711 879,770 13,727, 883 13,708,928 997,612 7.28 0.87 5,957,057 8,093,332 135.86 3,131,971 11,911,111 15,316,085 1,185,102 1111. BI‘F 10,390, 9115 1,005,573 12,1132,095 15, 952,399 3,7111,752 23.116 2.82 11, $58,708 6,6119, 193 1311.09 3,108,0211 9, 917,1116 13,025,11110 1,260,521-1 BRIT" CAP 7,18 5, 812 721,132 23, 288,236 23, 275, 3011 3, 102,188 13.33 1.60 10,093, 761 11,383, 3211 13.13 5, 822,059 20, 187, 522 26,009,581 2,517,051 CAP 1m 37, 2 67, 097 3,608,122 22,826; 569 33, 525, 673 3, 588, 802 10. 70 1. 28 8, 617, 801 3 3, 698,295 391.03 5,606, 6112 17,235,602 22, 8112, 21111 2, 210, 535 um EAL 33, 923, 799 3, 283,1126 56, 352, 529 58,115,165 16, 8611, 9211 28. 86 3.116 25, 003,309 17,063, 875 68.25 111,088,132 50, 006,618 611, 091,750 6, 202, 705 EAL NA 63, 8115, 596 6,178, 5911 55, 915, 6011 90, 351, 861 26,050,080 28. 83 3.116 22,993, 793 37,795. 516 1611. 311 13, 978, 901 115,997,536 59, 976,118? b, 8011,165 NA UAL 71,357,033 6, 905, 506 73,3111,759 76,766,605 10, 7211, 603 13. 97 1.68 29, S119, 1115 60, 632,1130 205.19 18,335,14110 59,095,290 77, 1133, 730 7,193,572 M ML 85, 908, 959 8, 313, 7511 81,233,200 811,117,050 211,113,072 28.96 3.11.8 33,010,139 61,165,887 186.20 20, 308,300 66,020,878 86,329,178 8,351,120 AAI. Totals and weighted averages 352,629,718” 111,277,88611-11 97,603,31711 23.56181 2.831-1 159,821,396 250,010,671 156.115 11- Operating Expense data here exclude flight equipment depreciation Notes: (continued) Notes: (continued) and rentals, unless otherwise indicated. Column 11: Mom Tables 1 and 2. Column 13: (continued) +1-11- Excluding ROB and CHA from feeder totals, and DAL, HAL, and W/I Column 5: Total reported operating expense data (excluding flight The respective weighted averages for the feeders and trunks, from trunk totals. equipment depreciation) cover the carriersl total serm- provided by this column, are 112.76 and 156.145 percent, although ices -— domestic and territorial or international. these averages are exceeded by certain carriers in each category. IIOI'ES: General — Balance sheet data as at December 31, 19119, are used See note for column 2. In general, the "judgnent" figures are higher than the "experi- here in relation to expense data reported and calculated for the Column 6: Pram Table 31. ence" figures of the carriers, effing to the influence of heavily 12 months ended Septenhzr 30, 19119. Column 7: (a) For the feeders, column 6 as percent of column 11. depreciated prewar fleets; they are, however, generally less than (b) For the trumcs, column 6 as percent of column 5. representative of replacement valies, particularly in the case of Column 2: From Table 51. Investment totals for nine trunk carriers, Column 8: Column 7 multiplied by 12 (months). the feeders. The judgment involves compromise of short— and long- which operate as single systems both domestic and Column 9: From Tablel 1 and 2. term considerations. In View of the projected rate of return on territorial or international services, are not separa- Column 10: From Table 31. calculated investment — perhaps a constitutional minimum, the ble as between domestic and other operations. The Column ll: Column 10 as percent of column 9. uniform earnings elements here supplied are regarded as extremely nine carriers are A1.‘.erican, Braniff, Chicago and Southern, Column 12: Computed for both the feeders and the trunks as 25 per— conservative. (See columns 9 and 11.) Colonial, Eastern, national, xxiorthxrest, TWA, and United. cent (3 months) of calculated Operating; Ezqoenseté Column 15: 6 percent return after taxes at 38 percent (converted percent: Column 3: 6 percent return after taxes at 38 percent (converted (colunn 11). Demure the awn-ages shown in column 7 and 3. 9.67711). percent: 9.67711). Column 13: Corputcd for feeders at 50 percent of calculated AO Ex- penser (ccl‘mn 9) and for trunks at 200 percent. These "judpmnv' figures are based on colunm 1.1 above. (71.) Source: Based on Table 51. See also Tables 1 and 2. TABLE, 31 figs 1 of 2 NET INVESTMENT OF THE DOMESTIC AIR CARRIERS As of December 31, 1949 WI; 5' Chicago & Mid— Uestem/ Descrigtm flrican Braniff Capital Southern Colonial Continental Delta Eastern Continent Nationa_l__ Northeast Most TWA U ed Inland (1) (23 (35 (4) (5) (6) ('7) (8) (9) (10) (11) (12) (13) HZ) (15 16 NET INVESTMENT Surplus 16,521,136 5,538,281 1 6 0 563,078 1,756,784 1,630,159 5,353,250 25,283,375 1,570,252 5,302,02E_ 1,353,122 02 1 8,832,286 18 1 5,355,222 Net worth 62 71 7,638,281 1,8Q,388 5,556,723 2,272,385 2,016,216 ,85§,25O 27,378,257 1,272,227 5,302,02E_ 3,555,823 21,283 ,222 20,255,555 52,682,231 5,203,521 Long-term debt 36,662,000 3,927,352 7,246,500 - - 1,025,000 2 000 6,666,667 174,829 947,368 225,000 15,325,363 53,3Q,176 26,220,000 3,113,181 Total Net Investment 322,612,971 210,735,652 52,088,888 25,556,723 52,272,385 0 16 $2,223,250 0 61 52,157,056 $6,256,326 $5,552,823 232,378,652 265,227,822 W fi,016,702 WORKING CAPITAL- Current 8836138 $30,830,289 3 5,702,332 $5,722,268 $4,535,819 $2,119,992 $1,664,743 $4,070,613 $33,470,939 $2,485,296 $2,960,789 $1,653,761 $10,365,477 $34,605,876 832,037,414 $2,631,411 Investments 13, 538,789 60,369 234,905 1,133,400 97,127 2, 606 - 172, 591 24, 789 34,965 46,951 84,000 8,494,708 28,434 11,187 Deferred debits 2,223,805 1,056,759, 386,5:3 294,298 49,468 212,129 361,103 2,978,910 73,608 450,946 253,072 1.431.203 2 2,300,Q6 632,288 Subtotal 56,522,883 6, @252 6,353,752 5,263,517 2,266,587 1,880,112 4,431,716 j6,622,452 2,583,623 3,556,700 1,253,785 11,880,680 55,052,222 35,366,265 3,222,886 Current liabilities 20,675,247 2,884,349 2,997,751 1,597,167 781,330 912,775 3,096,663 14,625,829 1,062,694 1,746,925 585,007 7,798,641 16,954,472 19,731,279 2,388,135 Deferred credits 1,474,564 163,522 210,784 135,069 40,264 43,857 239,503 2,145,001 90,540 480,044 41,569 493,237 3,053,427 3,910,382 13,681 Operating reserves - 12,812 2 65.000 57.981 18.766 97,908 2,986,686 10.606 228.,{é2 117,452 - - - - Subtotal 22,152,811 3,067,620 3,255,265 1,227,236 822, 581 275 , 328 3,535,075 12 ,757,516 1,163 ,850 2,555 ,551 245,012 8,221,828 20,007,82 23 ,655,661 2 ,561,816 Total 2 072 7 7 2 102 8 5,166,281 1,387,006 $5,721 297,653 16,865,224 $512,853. 221,252 1,292,765 3,588,802 26,050,080 10,725,605 718mm OPERATING PROPERLY AND EQUIPMENT 61,565,882 6,652,123 5,383,325 1,183,555 872,552 2,126,635 8- O 2 17,063,875 707,865 5,225,755 3,310,853 _ 33,628,225 37,:35,516 60,632,530 6,831,252 OTHER ASSETS (a) Investments in and advances to affiliates 13,471,631 140,585 41,706 37,924 11,148 10,511 69,051 116,815 14,747 35,176 10,621 83,700 142,425 2,713,809 127,242 Investments in separately operated divisiors - - — - - — 113,925 - - - - - - , - - Nonnperating property 232,381 204,110 1,561,369 69,003 1,778 - - - 4,592 4,226 15,887 7,845 - 319,705 339,633 Intangibles - - 1 l - 50 —- -- - - 2,697 - 309,801 1,219,384 — Capital stock discount - - — - — - — -. — - — — - .. _ Total 53,705,012 355,625 5,603,026 0 28 12.926 10.561 182.976 116,815 19,339 391% 29,205 91,545 452,226 5,252,828 566,825 TOTAL to agree with Not Investment above $2,612,271 210,125,652 22,088,888 55,56,723 52,272,385 0 16 52,225,250 235,055,615 22,157,056 6 2 6 6 fi,552,823 $37,378,652 $65,227,822 $25,622,235 fl,016,fm2 (a) Less Other Assets above 53,205,012 355,525 1,603,076 106,228 12,226 10,561 182,276 116,815 12,332 32,592 22,205 21,5fi 552,226 5,252,828 556,825 NET INVESTMENT (ADJIBTED) £5,208,252 510,320,255 27,g5,812 55,352,:Q5 22,252,558 53,031,355 W 233,228,222 fl ,127,717 26,216,225 25:?an 237,287,227 6 8 6 271,357,033 22,552,822 (75) TABLE 31 Page 2 of 2 NET INVESTMENT OF THE DOMESTIC AIR CARRIERS As of December 31, 1949 Feeders Wisconsin Description Challen~ En ire Honareh Piedmont Pioneer Robinson Southwest Trans-Texas West Coast entral (1) (25 (35 (45 (55 E65 (75 (85 29) Z10) (115 NET INVESMENT Capital stock $294,646 $563,489 $668,540 $ 984,000 3 90,227 as 175,027 $323,830 _ 3 900,000 $187,372 $155,000 Surplus -5,688 -18,536 36,815 —115,251 8 6 —51_)2,275 606,62 -328,556 _555,3_12 5E,236 Net '0th ___..2L288 8 541.253. £21252 _9_._4286 7 m8 22 321.241 3145—0 02 _2114554 M .._626. .216 Long—term debt 1,627 - - - — 585,225 - - 530,000 - Total Net Investment £220,655 £555,053 £505,355 2" 862,752 $238,222 15 356,218 :52“ 30,502 M £858,685 626 6 WORKING CAPITAL Current assets $251,309 $183,426 $400,904 $ 581,349 $816,116 8 156,485 $886,603 $ 360,835 $615,335 $275,296 Inves tments — 211., 036 8 , 647 - - - 4,303 - - - Deferred debits 33,8 31,286 56,558 88,512 105,012 285,572 80,255 _6_5,'8@ 20,555 235,275 Subtotal 285,171 522,555 566 , 022 662 ,861 221,535 M 271,852 M 705,882 510 ,2fl Current liabilities 194,556 82,525 184,163 415,752 326,090 677,763 261,014, 248,657 150,639 269,270 Deferred credits 4,882 3,988 7,680 4,096 8,393 1,123 8,768 1,431 4,533 3,854 Operating reserves - - - 12,255 — - 53,427 — _l2,638 - Subtotal 122,538 86,553 121,853 552,803 M3 6 8,886 2 20 250,088 157,810 213,125 Total 85,733 352,235 275,166 180,058 586,652 -2 7 22 655,650 175,556 5@,Of§ 237,552 OPERATING PROPERTY AND EQUIPLENT 157,227 120,752 230,688 553,007 351,752 525,680 281 355,537 310,605 325,521 OTHER ASSETS (a) Investments in and advances to affiliates 380 500 501 511 511 220 511 511 — 10 Investments in separately operated divisions -- — - 148,226 - - - 31,172 - - Nonoperating property — 10,866 - - — - - - - - Intangiqu - — - — — .. .. 10 , 068 _ - Capital stock discount 56,615 - - 27,257 - - - - - 65,378 Total 56 ,Q5 11 ,366 501 116,685 51.1 220 515 55,751 - 65 ,388 TOTAL to agree with Net Investment above ' 2 0 6 $555,053 $505,355 33' 862,252 $238,222 § 356,212 £230,502 £515,555 £58,685 5626,2136 (a) Less Other Assets above 55,225 11,366 501 176,685 51.1 220 511 55,251 - 65,388 NET INVESTMENT (ADJUSTED) $253,660 $533,681 $505,855 $5 5%,065 $238,551 5 356,758 $222,225 £29423. @58,685 £561,552 Notes: (1) Nine of the carriers shown above operate,as single (2) The terms “working capital" and “operating property and Source: Prepared by W. A. Kilerlane, Analyses systems, both domestic and territorial or inter— equipnent" are here adopted as convenient descriptive Division, Bureau of Economic Regulation, national services. Their reported net investments terms, in order, for the purpose of this report, to C.A.B. are, therefore, not separable as between domestic divide capital into two broad categories. Nonoperating and other operations. The nine carriers referred property, etc., is excluded, as shown above, from total to are American, Braniff, Chicago and Southern, investment. Reserves for equipment purchases are Colonial, Eastern, National, Northwest, TWA, and included in working capital. United. (76) Carrier WIS c O MON ROB TTA WCA $878 Total TRUNKS CONT COL HAL NEA C803 MGA W/I DAL BNF NIL CAP TWA EAL UAL AAL Total Total ..___(§)...___ 580,292 818,817 675,8822/ 728,828 528,880 1,089,257 671,161 917,267 1,879,817 1,097,172 8,182,573 2, 928, 335 2,262,299 5, 752, 878 2,888,922 )4, 11.72, 39h 3: 913: 321 5,392,869 7,928,382 7,158,589 111, 191, 1117 13,816,888 32,689,716 30,767,208 85,280,767 87,351,688 226,386,753 a/ Station amounts include off—line stations and unallocated '5/ G 8: I account No. 6100 of the Uniform System of Accomts. DISTRIBUTION OF REPORTED GROUND AND INDIRECT EXPEhBE BE'IWEEN LOCAL STATION AND GENERAL PEANUARTERS EXPENSES Ground and Indireqt Expense Locafstfiion expense- ( (12 months ended September 30, 1989) 8 AnnufiF 198,812 135 , 280 105,305 260,018 189,381 281,285 227,833 367,006 885,918 386,572 2,597, 926 970,020 678,866 2,070,390 1,138,972 1,953,830 2,053,895 2, 288, 639 39968, 796 3,125,862 7,079,585 7,358,885 9,380,756 10,835,030 20,298,158 30,089,880 102: 793: 92,4 General headquarters etc. V Percent Domestic Trunks and Feeders P6rcent Amount Total (87 (5) (6) (7) 38.19 8 381,880 65.81 293,358 38.32 283,177 65.68 156,700 15.73 569,577 88.27 263,580 35.68 868,818 68.32 310,808 36.11 335,099 63. 89 185, 785 26.80 768,012 73.20 338,286 33.95 883,328 66.05 303, 770 80.01 550,261 59.99 233,218 32.88 993,899 67.16 882,689 31. 59 750, 600 68.81 338, 087 32.12 5,588,687 67.88 2,902,281 33.17 1, 958, 315 66.83 887,071 29.83 1,587,833 70.17 566,088 35.99 3,682,888 68.01 1,720,520 39.29 1,753,950 60.71 857,028 83.68 2,518,968 56.32 1,511,235 52.87 1,859,826 87.53 1,305,011 82.88 3,103,830 57.56 1,581,778 50006 339599586 h909h 2,372,223 83.68 8,029,087 56.32 2,258,856 89.89 7,111,832 50.11 3,960,502 58.82 6,061,603 85.18 8,807,783 28.57 23,388,960 71.83 8,278,038 33.92 20,332,178 66.08 8,906,588 88.86 28,986,609 55.18 12,689,603 63oh6 17,302,168 3605h 1h35h5,097 85.81 123,552,829 58.59 66,202,297 depreciation—ground proPez-by and equipment. E/ Data shown cover the calendar' year 1989. Distribution of total G81 Emense between local station and general headquarters expenses (schedule 13-8 of Form 81 reports submitted by carriers to C.A.B.) was not reported by CHA for the fourth quarter of 1988. ( 77 ) Ground 02erations. Emensep/ LocaIstation eagense Amount Percent 8 176,179 60.06 79,056 50.85 993252 37066 197,516 63.55 96,676 52.08 179,591 53.09 166,770 58.90 189,038 63.90 229,583 87.56 159,885 87.73 1,533,102 53.09 587,227 61.69 275,221 88.62 1,317,789 76.59 683,306 75.06 1,083,277 71.68 1,120,009 85.82 1,188,319 78.87 1,993,762 88.05 1,595,987 70.78 3,399,65h BSOBh‘ 3,689,000 76.73 8,795,579 57.93 , 66,168 51.27 8,618,851 68.13 12,762,802 87.78 87,591,071 71.89 Source : General headquarters; etc. Economic Regulation, C.A.B. Amount Percent 55 1.17, 179 39. 98 77,688 89.55 168,328 62.38 113,292 36.85 89,109 87.96 158,655 86.91 137,000 85.10 88,188 36.10 253,106 52.88 17h,6b2 52.27 1,369,139 86.91 339,888 38.31 290,827 51.38 802,771 23.81 213,722 28.98 827,958 28.32 185,002 18.18 397,855 25.13 378,861 15.95 658,909 29.22 560,8h8 lholb 1,118,783 23.27 3,882,859 82.07 8,380,380 88.73 8,031,152 31.87 1,782,695 12.26 18,611,226 28.11 TABLE 32 Carrier WIS EHP CHAE/ MON ROB TTA WCA SWA Prepared by W. A. Kilerilane, Analyses Division, Bureau of . ,1. _ .1 . AM_-_':,_._~\~/_i ;..~_. L \ _- 1,, -_..—-.m_ 11 .1» Total Operating Expense OPERATING EXPEI‘BES IN TOTAL BI ACCOUNT CLASSIFICATION AND BY CARRIER (12 months ended September 30, 1989) Aircrait Operating Emmes Ground and indirect expenses fetal Flying Operatiom Excluding Excluding Excluding Direct Main— Depreciationu Ground and Depreciation— depreciation depreciation flight equip- tenance—Flight Fligxt Ground Indirect Passenger Traffic Advertising General and 01-0qu Property Carrier As reported and rentals As reported and rentals As reported ment rentals Equipnerrt Fguipment Total Operations Maintenance Service and Sale. and Publicity Amt“. and Equipment (1) (2) (3) (8) (5) (6) (7) (8) (9) (10) (11) (127 ' CD4) (15) (16) (17) FEEDERS WIS 8 1,182,506 3 1, 089,088 8 602, 218 8 508, 752 8 306, 352 8 306, 288 8 202,868 8 93,393 8 530, 292 $3 293, 358 $3 99, 959 53 5,766 8 28,111 8 16, 398 126,318 3 18, 389 MP 907,201 838, 806 838,788 815, 989 293,795 293, 675 122, 318 72, 675 8, 817 156, 700 59, 567 38, 853 65, 898 18,781 63,519 18, 099 cm 1,880,873 1,362,188 787, 817 669,892 855,897 886, 562 222,930 109,390 692,656 281,870 110,866 69,081 80,677 23,039 155,097 12,066 MON 1,551,192 1, 393,885 822,368 668,657 883, 918 883, 918 180, 739 157,707 728, 828 310,808 96, 871 66,877 86, 386 30, 531 111,628 26,131 ROB 1,080,760 987, 816 556,280 863,336 280,837 280, 270 183,066 92, 777 528,880 185,785 55,665 32,312 121, 525 22,058 86,726 20,809 m 2,265,588 2,129, 757 1,216,331 1,080,500 608,138 608,138 876,362 135, 831 1,089,257 338, 286 158,687 86,281 155,090 68,528 157,369 89,056 VEGA 1,291,282 1,132,262 620,081 861,101 383, 821 383,821 117,280 158,980 671,161 303,770 61, 302 87,036 71, 987 30,228 138,880 22,802 Pm 2, 272,000 2,101,087 1,358,733 1,183,780 760,882 737, 973 885, 802 188,889 917, 267 233, 218 107, 975 96,677 230, 801 59, 212 167,085 22, 339 Pu. 3,071, 808 2, 881, 889 1,591, 991 1,362,072 956, 957 956, 857 805, 615 229, 819 1, 879, 817 882,689 187,888 176,398 301, 308 98,765 189, 893 83, 280 5111 2,280, 888 1,971,167 1,183,712 873, 995 608, 66 608,866 265,529 309, 717 1,097,172 338,087 115, 876 88, 221 232,608 72,715 186,116 67,589 TRUNKS com' 5,383,155 8, 916,733 2,818,820 1,992,398 1,585,652 1,585,652 886, 786 826,822 2, 928,335 887,071 893,076 313,689 831,528 186, 832 508,609 107,538 COL 8:172:788 3, 900, 072 1: 910, 889 1: 637, 773 1,102,539 1, 096,029 581,788 266,166 2, 262,299 566, 088 368, 293 302, 818 398, 567 105, 258 882,168 39, 551 N81. 12,067,579 10,972,036 6,318,701 5,219,158 3,266, 959 3,268,786 1,958,812 1,093,330 5,752, 878 1,720,520 1,056, 291 617,782 1,052,816 829,818 738,808 137,287 NEA 5, 529, 938 8, 982, 368 2, 681, 016 2, 053,882 1,386,753 1,386,753 706,689 587,578 2, 888,922 857,028 581, 257 267 ,311 511,181 190,880 826, 902 98, 803 085 7, 776,609 7,383, 258 3,308, 215 2, 870, 868 2,080, 920 2,080, 920 829, 988 833,351 8, 872, 398 1,511, 238 602, 859 608,596 882, 856 286, 859 585,972 115,018 MGA 6, 908, 288 6, 358, 827 2, 998, 927 2, 885,506 1, 971,593 1,938,865 507,081 516, 293 3, 913,321 1, 305, 011 836, 792 858, 262 893,819 210,801 536,830 76,606 W: 10,008,895 8, 907,810 8,612,026 3,515,381 2,918, 853 2, 898,982 616,399 1,076,778 5,392,869 1,581,778 668,038 591,639 1,072, 507 296,069 928, 881 257,605 nu. 18,817,987 13,708,928 6, 889,605 5,780,586 8,119,157 8,088,285 1,692,301 1,078,187 7,928,382 2,372, 223 982,381 1,023,859 1,719,055 563,605 1,078,750 188,509 BM" ,000, 12, 937,802 6, 885, 993 5,783, 253 3,792,218 3,792,218 1, 991,039 1,062, 780 7 ,158, 589 2, 258, 856 1,026,288 958, 835 1,881,169 377,788 900,881 198,816 MA 26,080,901 23,520,225 11,889,888 9,328,808 6,789, 715 6,695, 958 2,632, 858 2,866, 915 18,191,817 3, 960,502 2,797,719 1,587,528 2, 826, 209 589,888 1, 861,130 608,881 GAP 28,901, 925 23, 275,308 11,885,877 9, 858, 556 6, 987,586 6, 918,293 2, 988, 563 l, 553, 368 13, 816,883 8, 80?, 783 1, 828,199 1, 513, 278 2, 801, 071 1,016,330 1, 508, 816 381, 011 NA 62,350,301 57,100, 812 29,660,585 28,811,096 18,151,108 17,755,878 6,655, 622 8,853,855 32, 689, 716 8, 278,038 8,673,869 8,586,689 7,858, 885 2,125,893 8, 726,777 839,565 ELI- 68,081,910 57,621,099 33, 278,702 26, 853,891 18, 895 ,087 17, 987,525 8, 906, 366 5, 873, 289 . 30, 767, 203 8, 906, 588 8, 203,737 3, 953, 706 6,051, 291 2, 565, 800 8, 376, 503 709,623 m 33, 828, 075 73,877,737 38, 187,308 25, 236, 970 20, 855,168 20,612,623 7,628, 387 9, 707,793 85, 280,767 12,689,603 6, 980, 277 5, 952,950 8,590,155 1, 881, 165 6, 909,805 2,317, 212 MI- 39,087,322 81, 077,366 81, 695, 678 33, 725, 718 23, 027, 238 23, 028, 663 10,701,055 7, 967,355 87, 351, 688 18, 585, 097 7,237,216 5, 939, 821 3, 857,361 2, 888, 581 6,175,869 1,708,133 Note: Totals are as reported by the carriers, including such in-period revisions in reported data as were available at the time of final preparation of this zeport, and excluding out-of—period items. Source : Form 81 reports submitted by the carriers to C .A . B. (79) mm 38 (See Chart 3) Carrier GEL MON ROB WCA PAL SWA GOM‘ COL NM. 1101 WI BI‘F NHA CAP NA TABLE 35 TRAFFIC VOLUME BY CLASS AND AVERAGE PER STATION FOR THE DOMESTIC SCHEDULED AIR CARRIERS Traffic tons originated,_by class (12 months ended September 30, 1919) Traffic ton-miles, by class Average traffic volume Ber station Carrier Passenger baggage FEEDERS WIS 2,635 11113 3,010 CHA 2,812 MON 2,863 ROB 3,606 TTA 1,127 WCA 6,569 FDA 7,302 EAL 10,006 SKA 11,107 TRUNKS 0mm 132w COL 17,909 NAL 25,186 “EA 30.9 1175 085 29,790 MGA 32,201 w/i 36,827 DAL 52,561 BNF 55,310 NW1 69,125 GAP 111,691 TWA 132,686 EAL 209,285 881 208,560 AAL 307,890 Note: 28,097 17,970 61,976 53,518 68,552 51,269 58,789 88,575 121,320 93,160 263,039 281,255 611,935 258,353 512,220 363,071 115,996 689,569 773,720 1,118,212 880,711 2,179,552 1,637,689 2,361,036 2,815,665 Excess Excess Tons Tons Express Freight Hail Total Passenger baggage Express Freight Mail Total originated lifted Ton-miles (H) (b) (6) (7) (8) (9) (10) (11) (I2) (13) (11) (137 13.18 130.00 - 128.00 2,906 101,952 2,019 19,678 - 18,032 111,681 185 381 13.68 62.17 - 96.76 3,213 678,912 , 3,025 12,683 — 20,617 715,237 215 868 16.03 102.31 191.63 150.83 3,276 760,701 1,355 31,867 66,676 10,208 903,810 236 768 13.71 91.18 316.33 116.13 3,101 718,272 3,113 19,393 85,977 26,191 853,519 213 672 7.93 - 91.00 103.00 3,808 511,800 1,212 — 15,690 16,193 577,895 152 967 13.21 69.80 50.00 235.50 1,196 989,181 3,129 17,832 11,323 62,939 1,087,107 212 585 56.96 175.89 168.13 119.01 7,852 1,603,392 12,127 31,131 19,537 29,500 1,728,990 102 915 52.00 108.00 200.00 103.00 10,769 2,781,792 11,197 28,130 65,809 89,121 2,979,919 119 1,102 31.13 230.00 513.00 112.00 12,296 2,062,818 6,369 31,511 88,755 50,533 2,213,019 512 1,875 131.78 213.00 750.00 517.00 18,951 6,291,072 19,091 97,529 317,863 211,291 6,996,819 713 1,716 131.32 255.00 161.00 366.00 19,128 1,717,632 35,109 59,221 109,512 95,786 5,017,593 1,072 2,305 517.37 155.00 1,515.00 980.00 28,983 15,109,728 306,182 565,626 1,068,130 521,886 17,571,852 1,011 3,559 91.17 515.00 1,053.00 513.00 32,650 5,799,936 17,835 85,796 207,591 89,307 6,200,168 1,360 2,952 285.98 1,151.00 1,122.00 1,391.00 31,313 10,335,711 98,978 537,672 590,710 539,213 12,102,317 1,539 3,093 267.27 615.00 831.00 1,010.00 31,957 9,530,976 78,723 199,362 323,030 320,816 10,152,907 1,211 2,111 251.11 952.90 1,561.90 1,290.70 10,890 13,601,172 93,116 317,101 601,181 516,816 15,163,016 1,122 2,116 616.50 1,827.00 3,683.00 2,261.00 60,979 19,779,618 213,553 732,589 1,762,070 927,176 23,115,338 1,791 1,681 387.17 1,616.15 2,387.31 2,551.19 62,282 19,183,101 131,627 812,827 1,120,529 1,055,219 22,306,336 2,160 1,688 597.06 3,077.11 5,913.01 3,359.25 82,372 36,622,818 315,915 1,637,028 1,251,005 2,130,762 15,257,558 2,636 5,957 ‘658.98 5,089.00 12,891.00 3,156.00 133,189 33,287,901 195,572 1,661,132 6,856,110 1,023,161 13,021,182 2,733 6,310 1,512.62 8,190.30 10,269.30 8,597.20 161,255 89,316,381 1,022,189 5,110,823 11,759,915 9,113,033 116,322,671 3,021 8,732 3,306.70 8,173.00 12,512.00 9,117.00 212,691 95,615,712 1,509,531 3,558,819 8,327,835 1,873,005 113,881,902 3,190 9,318 2,013.89 9,703.00 29,288.00 11,532.00 261,127 121,922,592 1,198,139 6,127,685 22,809,011 10,359,117 162,716,577 3,791 9,333 3,725.17 10,703.00 13,255.00 11,006.00 376,579 111,270,018 1,719,695 5,319,301 29,375,510 9,062,823 189,777,377 5,617 11,915 Source: See detailed notes on Table 36. ( 80 ) Carrier 7 WIS Emfi’ CHA MON ROB TTA WGA EAL CONT COL HAL 101 W/I BHF EMA CAP TWA UAL Form 11 reports submitted by carriers to C.A.B. TRAFFIC AND OPERATING DATA OF THE DOMESTIC SCHEDULED AIR CARRIERS (12 months ended September 30, 19149) Table 36 (See Chart 3) WIS CHA ION ROB TTA PAL sagas 155:5 aasgg Traffic tons originated] Average daily Average Average hunter Traffic unite Aircraft aircraft length of interstatien Ratio of of Tone Tens Plane days utilization traffic haul flight dis- [ Traffic tons lifted ] Carrier stations originated lifted Ton-miles Plane miles departures assigned (miles) (mile-e) tanee (mdlss) 5.7.771. tens ngInEed Carrier (11 (2) (3) (h) (5) (61 (71 (3) (9) (1°) (11) (12? U3) FEEDERS WIS Wisconsin Central Airlines, Inc. 15.72 2,906 6,0111; 1,681 1,397,190 19,121 2,129 656 152.0 73.1 2.08 up . Empire Air Lines, Inc. 111.91 3,213 12,9118 715,237 1,057,650 19,131; 1,162 723 222.6 55.3 1.1.03 cm Challenger Airlines Company 13.91 3,276 10,680 903,510 1,571,392 18, 562 1. 523 1,032 275.9 811.7 3.26 11011 Monarch Air Lines, Inc. 15.914 3,1101 10,713 853,949 1,731.1,116 21,762 1.797 251.0 79.7 3.15 ROB Robinson Airlines Corporation 8.113 3,808 8,113 577,895 805,579 11,339 1,106 573 151.8 71.0 2.11:. TTA Trans-Texas Airways 21.21 11,196 12,1709 1,087,607 2,6711, 255 30,509 2,629 1,017 21.1.? 87.7 2.76 ms West Coast Airlines, Inc. 15.00 6,773 15,917 881,8b2 1,285,317 23,236 1,882 683 130.2 55.3 2.35 Pm Piedmont Aviation, Inc. 19.52 7,852 18,152 1,728,990 2,751.,373 29.3118 2,680 1,028 220.2 93.9 2.35 PAL Pioneer Air Lines, Inc. 23.97 10,769 33,599 2,979,910 3,915,920 1111,1151 3, 558 1,101 276-7 88.7 3.12 SM Southwest Aimye Company 211.00 12,296 115,003 2,215,019 2,Ld;0,328 118,918 3,297 7140 182.1; 1.19.9 3.66 TRUNKS CONT Continental Air Lines, Inc. 26.60 18,951.; 16,157 6,996,819 5,798,711? 38,1176 5,800 1,000 369.1 150.7 2.1-),= C01. Colonial Airlines, Inc. 17.811 19,128 111,125 5,017,593 3,939,888 32,299 11,262 921; 262.3 122.0 2.15 an. National Airlines, Inc. 28.58 26,983 101,730 17,571.,852 9,313,890 53,885 8,091. 1,151 606.1.- 172.8 3.51 MEL Northeast Airlines, Inc. 211.00 32,650 70,851 6,200,1468 3,817,960 113,601 11,710 811 189.9 87.6 2.17 C68 Chicago and Southern Air Lines, Inc. 22.32 311,315 69,029 12,102,3117 7, 942,876 113,123 5,369 1,1105 352.1; 1714.9 2.01 ICA lid-Continent Airlines, Inc. 28.79 311,957 70,261.; 10,162,907 8,125,958 56, 519 6,7m 1,2118 299.0 1119.1 2.01 l/I Western Air Lines, ham/Inland Air Lines, Inc. 36.115 140,890 89,1140 15,163,0116 9,032,613 53,013 9, 527 91.18 370.5 170.14. 2-15 DAL Delta Air Lines, Inc. 311.00 60,979 159,155 23.11115,338 12,986, 378 88,117 10,126 1,2116 3814.5 1117.1; 2.61 BNF Braniff Airways, Inc. 28.83 62, 282 135,152 $506,336 11,533,191; 69,925 10,1118 1,136 358.2 1611.9 2.17 m Northwest Airlines, Inc. 31.25 82,372 186,161 115, 257, 558 18,127,862 711,651; 17,519 1,035 519.1,; 2112.8 2.26 CAP Capital Airlines, Inc. 1.18.65 133,089 309,691. 113,021,182 20,121,537 1111.895 16.953 1,187 322.3 138.9 2.32 m Trans World Airlines, Inc. 53.37 161,255 1.66.027 116,322,671. 52,362,756 209,977 35,898 1.1.59 721.1. 21.9.1; 2.89 EAL Bastem Air Lines, Inc. ,. 212,691; 6117,993 113,881.,902 52,307,611; 297,639 30,692 1,701. 1169.3 175.7 2.67 UAL United Air Lines, Inc. 68.83 261,127 ,372 162,716, 577 53,103,196 211,006 118,881 1,093 623.1 253.1 2.1.16 ML American Airlin". 111°. 66-69 376.579 7911.582 189.777.377 5.556352 232.615 149.355 1.126 5011-0 238.9 2-11 Notes: General—(1) Traffic and operating data cover scheduled and Notes (continued): Column 3 (continued): ton-miles to computed passenger Notes (continued): Column 12: Ratio of nonecheduled revenue oporatime. ton-miles is applied to computed passenger tons, Traffic tons lifted (2) Carriers are listed in their rank order of to obtain a computed total of excess baggage tons. traffic tone originated for the 12-month period. Express, freight, and mil tons are as re- See note for colum 11. (3) Feederlines not operated during the full 12- ported by the carriers. month period of October 1, 191.18, through September Column 1“ Traffic tons lifted. Computation of— 'traffic tone 30, 191.19, are not listed. Those which operated e , an 0 ratio of "Traffic tone lifted" during only part of the period are: Florida to "Traffic tone originated" (column 12), is as follows: Airways, Inc., whose certificate was terminated Ton-miles - Sources: Traffic and operating data from Form 111 as of March 28, 19149; All American Airways, Inc., (1) [Plane Else] ' Average load (“1") reports submitted by carriers to 0.11.3. whose scheduled passenger service was inaugurated (2) Average load x plane departures : Total Station data from Fox-I111 reports and from larch 7, 191.19; Central Airlines, Inc., whose tons lifted records of the Tariffs and Service scheduled operations were inaugurated September (3) I: Total tons lifted ]= Ratio Division, 0.11.3. 15, 191191 E. W. Wiggins Airways, Inc., whose Total tons oHEInated scheduled operations were inaugurated September Column 5: Traffic ton-miles. Passenger ton-miles are computed 19, 19119. on the Eases 01' reported passenger-miles and an Column 21 Stations. "Station“ is counted here as a certif- average of 192 pounds per passenger. ioated point on a carrier's route for mich flight Excess baggage, express, freight, and mail ton- operations and airport facilities were reported for miles are as reported by the carriers. an part of the 12-month period ended September 30, Column 6: Plans miles. Totals are as reported by the carriers. 19 9: A station operated for the full 12 months is Column 7: Plane departures. Totals are as reported by the counted as l; a station operated for less than the car are. 12 months is. counted less than 1 in the proportion Column 8: Aircraft da s assigned. Totals are as reported by of its period of operation to 365 days. 1211—0 carHers. Column 3: Traffic tens originated (snplaned). Passenger tons Column 91 Average dailLai rcraft utilization. Column 6 (not reported—by the carriers) are computed on the divided by column W basis of 192 pounds per passenger. Column 101 Average miles of traffic haul. Traffic ton-ml lee Excess baggage tons (not reported by the carriers) divided by Traffic tone originated. are computed on the basis of the ratio between reported Column 11: Avon. e intorstation fli ht distance. Plane excess baggage ton-miles and computed passenger ten- miles. The percentage of reported excess baggage nu es d . ed- By P ane epartures. (81) TABLE 57 Page 1 of 2 No. Carrier and stations stations AMERICAN AWI‘IE‘S Im- Abilene (to 1I/1/1l9: 182 days: counted as 0.199 66. 69 station on a 36S-day basis); Akron; Albany; Baltimore; Battle Creek; Big Spring; Boston; Bridgeport; Bristol; Mfalo; Charleston; Chicago; Cincinnati; Cleveland; Columbus; Dallas; Dayton; Detroit; Douglas; El Paso; Elkins; Elmira/Corning; Erie; Fort Worth; Hartford; Irxiianapolis; Jackson (11/1/1113 to 11/1/19: 151 days: 0.1th station); Joplin; Knoxville; Little Rock; Los Ameles; Louisville; Iynchburg; Memphis; lziidland/Odessa ; Milwaukee ; Nashville; New Haven; New York; E‘Iewark; Niagara Falls; Oakland; Ok;a.homa City; Parkersburg; Peoria; Phoenix; Philadelphia; Providence; Richmond; Roanoke; Rochester; St. Louis; San Antonio; San Diego; San Francisco; Scranton/ Wilkes-Barre; South Bend; Springfield, 11.1.; Springfield Mass.; Springfield, 110.; Syracuse; Texarkana; Toronto, Ont. ; Tucson; Tulsa; Washington; Wilmington; Windsor, Ont. (to 7/10/19: 282 days: 0.773 station). ERANIFF AIRWAYS INC. 28. 83 Amarfi 0; Austin; Brownsville; Burlington; Chicago; Colorado Springs; Corpus Christi; Dallas; Denver; Fort Smith; Fort Worth; Galveston; Houston; Kansas City; Laredo; Little Rock; Lubbock; Memphis ; uoline (to 6/20/19, 8/20/19 through 9/30/19: 301; days: 0.833 station); Muskogee; Oklahoma City; Ponca City; Pueblo; San Antonio; Topeka; Tulsa; Waco; Wichita; Wichita Falls. CAPITAL AIRLINES, INC. 118.85 “Woo n; Asheville; Atlanta; Baltimore; Birmingham; Bristol; Buffalo; Charleston; Charlotte; Chattanooga; Cheboygan; Chicago; Clarksburg (14/ 214/119 through 91/30/119: 160 days: 0.1.138 station); Cleveland; Detroit; Elizabeth City; Elmira/ Corning; Erie; Flint; Grand Rapids; Greensboro/ High Point; Harrisburg; Huntsville; Knoxville; Lansing; Memphis; Milwaukee; Minneapolis/st. Paul; Mobile; Morgantown (3/1/119 through 9/30/119: 2111 days; 0.586 station); liuskegon; New Orleans; New York; Newark; Norfolk; Philadelphia (5/1919 through 9/30/19: 150 days: 0.1111 station); Pittsburgh; Raleigh-Durham; Reading (5/11/19 through 9/30/16: 150 days: 0.1111 station); Richmond; Rochester; Rocks,r Mount; Saginaw/Bay City; Sault Ste Marie; Toledo; Traverse City; Washington; Wheeling; Williamsport; Winstona‘ialem; Youngstown. CHALLEEIGER AIRLINES CCMPANY 13.91 Bl ings; Casper (2/3/119 through 9/30/119: 2110 days: 0.658 station); Cheyenne; Denver; Greeley; Greybull; Kemmerer; Laramie; Invell/Pcwell/Cody; Rawlins; Riverton/Lamier; Rock Springs; Salt Lake City; Vernal (7/1/19 through 9/30/19: 92 days= 0.252 station); Worland. NUMBER OF STATIODB OPEM’I'ED BY THE DUJEESTIC SCHEDULED AIR CARRIERS (12 months ended September 30, 19119) 1‘10. Carrier and stations stations CHICAGO AND SOUTHERN AIR LINES, INC. 22.32 Beaumont/Port Arthur; Chicago; Detroit; El Dorado; Evansville; Fort Wayne; Greenwood; Hot Springs; Houston; Indianapolis; Jackson; Kansas City; Little Rock; Lien his ; New Orleans; Paducah; Peoria; Pine Bluff (6 5/149 through 9/30/1151: ll8 days: 0.323 station); St. Louis; Shreveport; Springfield, 1110.; Terre Haute; Toledo. COLONIAL AIRLINES INC. 17.81; Alb—any; Baltimo' re; Burlington; Glens Falls; Malone (u/28/h8 through 9/30/19: 307 days: 0.8h1 station); Massena; Montreal; New York/Newark; Ottawa; Platts‘ourg; Poughkeepsie; Reading; Rutland; Saranac lake/lake Placid; Scranton/Wilkes—Barre; Syracuse; Washington; Watertown. COI‘ITINENTAL AIR LINES INC. Albuquerque; Bartlesville (3/1/149 through 9/30/1457: 2111 days: 0.586 station); Big Spring; Carlsbad; Colorado Springs; Denver; Dodge City; El Paso; Garden City; Hobbs; Hutchinson; Kansas City; La Junta; Las Vegas; Lawton/Fort Sill; Lubbock; Midland/Odessa; Oklahoma City; Pueblo; Roswell; Saline. (9/26/19 through 9/30/19: 5 days: 0.011: station); San Angelo; San Antonio; Santa Fe; Topeka; Tulsa; Wichita; Wichita Falls. DELTA AIR LINES INC. Alemgfif‘la' ; Asheville; Atlanta; Augusta; Baton Rouge; Birmingham; Brunswick; Charleston; Chattanooga; Chicago; Cincinnati; Columbia; Columbus; Dallas; Fort Worth; Greenville; Hattiesburg; Jackson; Jacksonville; Knoxville; Kokomo; Leximton; Lomzview/Kilgore/Gladewater; Macon; I‘leridian; Miami; Monroe; Montgomery; New Orleans; Richmond, Ind.; Savannah; Shreveport; Spartan‘ourg; Tyler. EASTERN AIR LINES INC. Afion; Albany, 6a.; Anderson; Atlanta; Atlantic City; Augusta; Baltimore; Baton Rouge; Beaumont/ Port Arthur; Birmingham; Boston; Bowling Green; Brownsville; Brmxswick; Charleston, 5. 0.; Charleston, W. Va.; Charlotte; Chattanooga; Chicago; Cleveland; Columbia; Columbus; Corpus Christi; Danville; Daytona Beach; Detroit; Dothan; Evarsville; Florence, S. C.; Florence/Sheffield/ Tuscum‘uia; Greensboro/High Point; Greenville; Hartford; Houston; Huntsville; Indianapolis; Jacksonvilll; Lafayette/New Iberia; Lake Charles; lexington/Frarflcfort; Louisville; Macon; uenphis; Miami; Mobile; Iiontgomery; Nashville; New Orleans; New York; Newark; Orlando; Pensacola; Philadelphia; Providence; Raleigh/Durham; Richmond; Roanoke; Rome (2/1/119 through 9/30/h9: 2112 days: 0.663 station); St. Louis; San Antonio; Savannah; Spartanburg; Tallahassee; Tampa; Vero Beach; Washington; Wag/cross (ll/lh/hB through 9/30/19: 321 days; 0.879 station); West Palm Beach; Wilmington; Winston-Salem. 26.60 3h.oo 69.51; (82) Carrier and stations No. stations EMPIRE Am LII‘IES INC. Baker; Balsa; Burley; Coeur d'Alene; Gooding; Idaho Falls; La Grande; Isvriston/Clarkston; Ontario; Pasco/Kennewick/Richland (3/5/h9 through 9/30/19: 210 days: 0.57; station); Pendleton; Pocatello; Pullman/Moscow (6/1/119 through 9/30/19: 122 days: 0.331; station); Spokane; Twin Falls; Walla Walla. HID-CCNTINENT AELIImg, INC. Aberdeen; Bisnarck/Mandan; Des Hoines; Fort Smith; Houston; Huron (to h/3/19, 6/20/19 through 9/30/19: 287 days: 0.786 station); Joplin; Kansas City; Longview/Kilgore/Gladewater; Mason City; Minneapolis/St. Paul; Minot; Muskogee; New Orleans; Omaha; Ottumua; Paris; Quincy/Hannibal; Rochester; st. Joseph; St. Louis; Sioux City; Sioux Falls; Shreveport; Texarkara; Tulsa; Tyler; Waterloo; Watertovrn. HONARCH AIR LINES INC. Alfifisa; Albuquerque ; Canon City; Colorado Springs; Cortez (8/1h/h9 through 9/30/19: ha days: 0.132 station); Denver; Durango; Pennington; Gallup; Grand Junction; Gunnison (11/10/h8 through 9/30/19: 325 days: 0.890 station); Monte Vista; Montrose/ Delta; Price (to 11/18/19, 5/1/19 through 9/30/19: 352 days: 0.961; station); Provo (to 2/15/19, 3/5/19 through 9/30/149: 3h? days: 0.951 station); Pueblo; Salt Lake City. NATIONAL AIRLIIES INC. B—aI'Elm' ore; Charleston; Daytona Beach; Fort Myers; GuJi‘port; Jacksonville; Key West; Lakeland; Marianna; Miami; Mobile; New Bern (7/1/19 through 9/30/19: 92 days: 0.252 station); New Orleans; New York; Newark (6/2/1L9 through 9/30/h9: 121 days: 0.332 station); Norfolk; Orlando; Panama City; Pensacola; Philadelphia; Richmond; St. Petersburg/ Clearwater; Sarasota/Bradenton; Savannah; Tallahassee; Tampa; Valdosta; Washington; West Palm Beach; Wilmington, 11. C. NORTHEAST AIRLINES, INC. Augusta; Barhgor; Boston; Burlington; Concord; Hartford/Springfield; Houlton; Hyamlis; Keene; Lam‘ence; Leuiston/Aubm'n; Liontpelier/Barre; liontreal; Nantucket; New Bedford/Fall River; New York/Newark; Oak Bluffs; Portland; Portsmouth; Presque Isle; Providence; Water-ville; White River Junction; Worcester. I-IORTI-MEST AIRLINES 1133. Aberdeen; Billings; Bismrck/I.Iandan; Bozeman; Butte; Chicago; Cleveland; Detroit; Duluth/ Superior; Eau Claire; Fargo; Grand Forks; Great Falls; Helena (ll/l/he through 9/30/19: 33h (lays: 0.915 station); Janestor. 1; Kalispell (6/2/h9 through 9/30/19: 121 days; 0.332 station); La Crosse; Madison; liiles City; Lillwaukee; liinneapolis/St. Paul; Elissoula; New York/Newark; 1110 91 28.79 15.911 28.58 214.00 31.25 ur- was...“ -.__ 1....» “—va .__1w_.i __._..———- - _.., 1‘10. Carrier and stations stations NORTWEST AIRLIEKLEE‘:z INC. (Continued) Pittsburgh; Portland; Rochester; Seattle; Spokane; Washington; Wenatchee; Winnipeg; Yakima. mom AVIATION INC. 19.52 Kshéviljfi; Bristol; Charleston; Charlotte; Cincinnati; Danville; Fayetteville (9/25/119 through 9/30/19: 6 days: 0.016 station); Goldsboro; Greensboro/High Point; Lexington; Louisville; Lynchburg; Morehead City (to 11/1/h8, 5/1/149 through 9/30/19: 181; days: 0.501; station); New Bern; Norfolk; Raleigh/Durham; Richmond; Roanoke; Southern Pines/Pinehm‘st/Aberdeen; Wilmington, N. C.; Winston-Salem. PIONEER AIR LINES INC. 23.97 A ene; A uquerque; Amarillo; Austin; Big Spring; Bryan; Clovis; Dallas; El Paso; Fort Worth; Houston; Las Cruces (10/12/h8 through 9/30/19; 351; days: 0.970 station); Las Vegas, N. Mex.; Lubbock; Midland/Odessa; Mineral Wells; Plainview; Roswell; San Angelo; Santa Fe; Sweetwater; Temple; Tucumcari; Waco. ROBIDBON AIRLII‘ES CORPORATION 3.143 Albamr (ll/Who through 9/30/19: 327 days: 0.896 station); Binghaurton; Buffalo; Elmira/Corning (11/8/118 through 91/30/19: 327 days: 0.896 station); Ithaca; New York/Newark Niagara Falls; Rochester; Syracuse (2/10/119 through 9/30/1151: 233,days: 0.638 station). SOUTHWEST AIRWAYS COMPANY 214.00 Bur to /h9: 182 days: 0.1199 station); Chico; Coalinga (to 3/19/149: 169 days: 0.1163 station); Crescent City; Eureka; Fort Bragg; Los Angeles; M sville; I-Iedford; Monterey; Oakland; Oroville (9 25/119 through 9/3o/h9: 6 days: 0.016 station); entwa; Paso Robles (9/25/119 through 9/30/16: 6 days: 0.016 station); Red Bluff; Redding; Sacramento; San Francisco; San Jose; San Luis Obispo; Santa Barabara; Santa Cruz; Santa Maria; Santa Rosa; Ukiah; Vallejo; Yreka. Note: "Station'I is counted here as a certificated point on a carrier's route for which flight operations and airport facilities were reported for any part of the 12-month period ended September 30, 19149. A station operated for the full 12 months is counted as NUMBER OF STATIONS OI‘ERz'iTED BY THE lXJIlI‘STIC SCHEDULED AIR CARRIERS (12 months ended September 30, 1919) NO. Carrier and stations stations THUS-TEXAS All-(HAYS 21.21 Beaumon Port Arthur; Beeville (7/23/119 through 9/3O/h9: 69 days; 0.189 station); Brownsville; Broml'ood; Coleman (8/16/19 through 9/30/19: to days: 0.126 station); Dallas; Del Rio; Eagle Pass; El Paso; Fort Stockton; Fort Worth; Galveston; Harlingen; Houston; Laredo; Lufkin; Liarfa/Alpine; LIission/IicAllen/Edinburg; Palestine; San Angelo; San Antonio; Uvalde (11/10/148 through 9/30/15»: 325 days: 0.890 station); Victoria. TRAIB WORLD AIRLINE INC. 53.3? WA any o /1/h9, o/h/h9 through 9/30/h9: 3110 days: 0.932 station); Albuquerque; Allentown/ Bethlehem; Amarillo; Baltilmre; Boston; Boulder City; Burbank; Chicago; Cincinnati; Cleveland; Columbus; Dayton; Detroit; Fort Wayne; Fresno; Grand Canyon; Harrisburg; Indianapolis; Johnstovm; Karsas City; Lancaster (11/211/h9 through 9/30/19: 160 days: 0.1138 station); Las Vegas; Los Angeles; Louisville; Mansfield; New York; Newark; Oaklam; Peoria; Philadelphia; Phoenix; Pittsburgh; Prescott; Quincy/Hannibal; Reading; Richmond, Ind.; St.‘ Louis; San Francisco; Santa Fe; Scranton/ Wilkes-Barre; South Bend; Springfield, Ohio; Terre Haute; Toledo; Topeka; Washington; Wheeling; Wichita; Williamsport‘; Wilmington; ’Ninslm; Worcester; Zanesville. IHKIITED AIR LINES DVD. 68.83 Afion; Allentown/Bethlehem; Avalon; Bakersfield; Baltimore; Bellingham; Bend; Boise; Boston; Bradford; Cedar Rapids; Cheyenne; Chicago; Cleveland; Denver; Des No’ines; Detroit; Elko; Eugene; Eureka; Fort Wag/re; Fresno; Grand Island; Grand Junction; Hartford; Iowa City; Klamath Falls; Las Vegas; Lincoln; Long Beach; Los Angeles; Redford; Merced; Milwaukee; Modesto; Molina (lo/l/he to 6/20/10, 8/20/19 through 9/30/119: 3011 days: 0.833 station); Monterey; New York; Newark; North Platte; Oakland; Ogden; Omaha; Pendleton; Philadelphia; Portland; Providence; Red Bluff; Reno; Rock Springs; Sacramento; Salem; Salinas; Salt Lake City; San Diego; San Francisco; Santa Barbara; Seattle; South Bend; Spokane; Note (continued): 1; a station operated for less than the 12 months is counted less than 1 in the proportion of its period of operation to 365 (Eye. . (83 1 TABLE 37 Page 2 of 2 No. Carrier and stations stations UNITED AIR LINES INC. (Continued) S ockton; The Dalles; Toledo; Twin Falls; Vancouver; Visalia; Walla Walla; Washington; Ymmgstown. WEST COAST 11111111113 INC. 15.00 AErdeen7Hoquieun; Albany/Corvallis; Anacortes/Iit. Vernon; Astoria; Belling-ham; Chehalis/Centralia; _ Eugene; Everett; Mcliinmrille; Medford; North Bend/ Coos Bay; Olympia; Port Ameles; Portland; Seattle. WESTERN AIR LINES, II'E./INLAND AIR LINES; INC. 36.115 Western Air Lines Inc. Burgh}? 150 9717119: 335 days: 0.918 station); Butte; Cedar City; Cut Bank/Shelby; El Centro; Great Falls; Helena; Idaho Falls; Idaho Falls; Jackson (6/16/19 through 9/16/h9: 92 days: 0.252 station); Las Vegas; Lethbridge; Logan; Long Beach; Los Angeles; Oakland; Ogden; Palm Springs (11/1/118 to 5/ 2/119: 182 days: 0.199 station); Pocatello; Portland; Salt Lake City; San Diego; San Francisco; Seattle; Yuma. Inland Air Lines Inc. AIIIa' nce; BilIlIg's s; Casper; Cheyenne; Denver; Great Falls; Huron (to h/2/h9, 6/20/h9 through 9/30/119: 286 days: 0.781; station); Lewistown; iinneapolis/ St. Paul; Pierre; Rapid City; Rochester; Scottsbluff; Sheridan. WISCONSIN CENTRAL ARLINES, INC. 15072 Bara‘boo/Portage (to 12/20/h8: 80 days: 0.219 station); Brainerd (3/1/149 through 9/30/19: 211; days: 0.586 station); Chicago; ChisholJn/Hibbing; Clintonville; Duluth/Superior; Eau Claire; Green Bay; Land O'Lakers (6/1/h9 through 9/30/19: 122 days: 0.3311 station); Madison; Milwaukee; Minneapolis/St. Paul; Oshkosh; Racine/Kemsha (to 8/1/10: 301; days: 0.833 station); Rhinelander; St. Cloud; Wausau (to 6/1/19: 273 days: 0.71:8 station); Wisconsin Rapids/Stevens Point. Sources: Form 111 reports submitted by carriers to C.A.B. Records of the Tariffs ani Service Division, C.A.B. SCHEDULE 6 ‘ - _.A»m-a,,- - to Tables 34, 36, 3'7 iSELECTED TRAFFIC AND EXPENSE DATA COVERING OPERATIONS OF FLORIDA AIRWAYS, INC. (April 1, 19h8, through March 28, 19h9) TRAFFIC AND OPERATING DATA 1,370 180,887 808,201 17,696 3,959 132.0 hS.7 2.89 10.86 Traffic tons originated Traffic ton-miles Plane miles Plane departures Traffic tons lifted Average length of traffic haul (miles) Average interstation flight distance (miles) Traffic tons lifted Ratio Of .affic tons originated Stations: Orlando, Sanford, St. Augustine, Jacksonville, Leesburg, Ocala, Gainesville, Lake City, Deland, Tallahassee (each of the 10 stations so far named was operated during the full period: 361 days each: counted as 0.989 station each); Perry (h/7/h8 through 3/28/h9= 355 days: 0.973 station) ( 84 ) EXPENSE Total re orted 2h,93 Operating Expense* h16,028 Aircraft Operating Expense* h08,908 Ground and Indirect Expense * Including $161,855 flight equipment depreciation and rentals expenses Excluding flight eguioment depreciation and rentals $563,081 Operating Expense 25h,l73 Aircraft Operating Expense h08,908 Ground and Indirect Expense Note: The notes and spurces applying to traffic and operating data of other carriers novered in this report apply as aporooriate to such data shown here for FLA. Reference: See Tables 3h, 36, 37. U. 5. GOVERNMENT PRINTING OFFICE : 0—1950