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Aviation History
1963
1963 - 0514.PDF
492 FLIGHT International, 11 April li-63 AIR COMMERCE ECONOMICS OF A HELICOPTER OPERATION IF Pakistan International's' plans mature, by early 1965 the air line's helicopter services will be offering 1.8m seat miles a year —more than the combined 1962 total of the three US helicopter airlines Chicago Helicopter Airways, New York Airways and Los Angeles Airways. But the subsidy required to make up the antici pated revenue shortfall of around £300,000 is expected to be less than three-quarters of that to be granted during the current year to Chicago Helicopter alone—at £420,000 the lowest subsidy needed by any of the US helicopter Big Three. Contributing to this surprising forecast are four main factors: (1) An average stage length which, at about 50 miles, approaches the best-economy stage of 80-90 miles for the Sikorsky S-61N; (2) an annual utilization of about 1,900hr per aircraft, made possible by fast turnrounds and longer stage lengths than are available to the US operators; (3) assumed load factors of 80 per cent in the second year of operation; and (4) indirect costs which, by ad ministrative streamlining and assistance from the PIA network as a whole, represent less than 20 per cent of total costs. The largest elements of direct cost will be depreciation and main tenance, crew salaries and fuel costs trailing some way behind. Amortising the initial £l.lm cost of three S-61s and spares over seven years to a 10 per cent residual value, depreciation per hour represents 22 per cent of total operating costs, whereas PIA's F-27s flying over similar sectors incur depreciation at a rate repre senting only 14 per cent of all operating costs. A similar comparison pinpoints the inherently higher costs of a helicopter operation: the S-61s will, PIA estimate, cost more than twice as much to maintain per hour as the F-27s and three times as much to insure. Related to the relative productivity of the two types the S-61 has maintenance costs eight times higher and insurance costs twelve times higher per seat-mile than the Friendship— at an estimated £32/hr for maintenance and £18/hr for insurance out of a total hourly cost for each helicopter of about £134. When the operation starts in November of this year, fares will probably be related to first-class surface fares for the sector, where these exist, although in some cases no such guide will be available. Some of the heliports will be in districts which have no roads, let alone railway or boat services. This fare level, linked to services which reduce to a thirtieth some of the present journey times, should bring in revenues during the first year of about £250,000, repre senting £66/hr at a load factor of about 60 per cent. Revenue and shortfall (which PIA are making up by cross-subsidizing the heli copter services from their other domestic operations, the fares on which are to be increased from March 1) will then be approximately balanced. The following year, when it is hoped that an average of 19 of the 24 seats will be occupied and fill-up cargo will also be carried, the ratio of deficit to revenue should have fallen from 50 : 50 to a ratio of about 44 : 66. The cross-subsidy should never, PIA hope, exceed about £300,000 annually, since as the operation grows in size it is hoped to achieve a reduction in unit costs from larger-scale operations and to improve upon some of the high engineering costs. The S-6IN was chosen partly as a result of the successful history of the HSS-2 in US Navy service and the airline is looking forward to achieving increased component fives as experience is gained. This will have a particu larly significant effect in East Pakistan, where stretched supply lines demand a large float of consumable and other spares. Should helicopter traffic not reach the expected level of about 20,000 passengers a year, or operating costs prove higher than anti cipated, PIA have the option of applying twin remedies: firstly they could adjust the fare level, which is in any case based on arbitrary rates per mile; or, in extremis, apply for the Government subsidy that has so far been eschewed. A subsidy might also have to be requested if the airline's presently satisfactory profit declined fol- lowing a traffic recession; but having undertaken to absorb almost all the costs of the new transport service for East Pakistan, PIA is in a strong position to demand help if it is needed. Arrangements have already been made with enthusiastic district officials for heliports to be constructed at local expense, relieving public funds of another burden, and terminal aids will be minimal since the S-61s will be operated VFR even during the monsoon period. The sum of £750,000 a year is thus the probable total cost, not just of operating three helicopters, but of a complete transport service. It has been estimated that to provide a similar seat-mile capacity with fixed-wing aircraft would cost at least an additional £260,000 above the annual helicopter cost, due to the prohibitive expense of constructing airfields on the Ganges Delta, where there is virtually no stone, and an ever-present risk of flooding. One of the airfields on the DC-3 Air Bus routes, Ishurdi, cost £|m to build even with PSP-surfaced runways, and this is typical. A minimum five-airfield network could well involve an expenditure of £3.8m on fixed installations and recurrent annual costs of £365,000—more than the total subsidy needed for the helicopter operation. In true transport terms, where terminal and en route costs are all borne by the carrier, the helicopter in East Pakistan is shown up in a surprisingly favourable light. Of alternative transport systems STOL aircraft and Hovercraft both have their adherents. The latter, as reported in Flight Inter national for February 28, are much favoured by the Minister for Provincial Communications and Transport, Nawab Khawaja Hasan Askari, although he admitted to a correspondent that con siderable further study would be needed before their economic potential could be assessed in relation to a country like East Paki stan where the per capita income is only £18 a year. Technically, a Hovercraft operation over rivers and cleared tracks overland appears feasible, but some searching questions will be asked of prospective salesmen about ton-mile costs. Nothing came of the demonstra tions scheduled for late February, though Vickers have apparently expressed their willingness to show VA-2 if certain basic conditions are met; the earliest demonstration is now likely to be in October, after the monsoon. IT CAN HAPPEN LIKE THIS A FLIGHT Safety Foundation bulletin draws attention to a DC-3 incident that could easily have been another of the all-too-familiar accidents involving collision with high ground during the approach. The aircraft belonged to a European airline and it was inbound from the sea to an airport situated on a mountainous coast having a powerful non-directional beacon as its only aid. Due to the jam ming of the quadrantal error corrector mechanism, the radio com- An article on this page examines the likely economics of Pakistan International Airlines' forthcoming helicopter operations in East Pakistan usini Sikorsky S-6/Ns. This photograph shows one of the two aircraft so far built as the N version of the S-61. An S-6IL delivered to Nitto Airlines in Japan with fixed landing gear, has since been converted to N standard with retractable landing gear and full floatation capability
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