the stuff back. That is only a small item. This business brings in five or six thousand pounds a day from that one customer. He uses purely airfreight. Senator MONRONEY. You are certificated to how many points on your route, Mr. Riddle? Mr. RIDDLE. We are certificated to serve 30 cities. Senator MONRONEY. How many are you serving? Mr. RIDDLE. Sixteen on a regularly scheduled basis, five operated as flag stops. Senator MONRONEY. Sixteen out of thirty that you serve now? Is that correct? As regularly served stops? Mr. RIDDLE. Yes, sir. Senator MONRONEY. And five are flag stops? Mr. RIDDLE. Yes, sir. Senator MONRONEY. When you have freight for the place you stop? Mr. RIDDLE. Yes, sir. We have certain requirements. Certain times of the year we go into those flag stops almost regularly, such as the flower markets. Senator MONRONEY. Actually, to all intents and purposes you are practically serving 21 out of the 30? Mr. RIDDLE. That is right. Senator MONRONEY. In connection with the testimony of the CAB representative yesterday, in the event that we would grant permanent certification and would permit the serving of those places served by the airline at the time of the passage of the act-you have to have a cutoff someplace-you would be perfectly willing to accept that as a route structure, and if you needed other points you would feel free to apply to the CAB for permission to serve them, is that correct? Mr. RIDDLE. We would not expect permanent certification for any point we were not serving. Senator MONRONEY. Would it be possible to provide temporary certification? Mr. RIDDLE. We would like temporary certification for the other points. Senator MONRONEY. For the other points that you now have, and those could be picked up as permanent by perhaps authority of the Board on a short hearing notice once you were established in those points? Mr. RIDDLE. That would be very satisfactory. We think there are other places that may at certain times of the year develop. Senator MONRONEY. On those towns you are overflying today, the sooner you stop and pick those up and develop more freight on those lines, the sooner we will have a basis for airfreight? Mr. RIDDLE. We have a situation in Florida with a missile base. There was nothing there a few years ago. They will need our service there in a few months the way the place is growing. Senator MONRONEY. Under no circumstances are you asking for subsidy? Mr. RIDDLE. None whatever. Senator MONRONEY. And airmail subsidy is specifically exempted in this bill by the provisions of the bill on the last page, plus the fact that there are no other ways that subsidy could be paid? Mr. RIDDLE. We are not asking for subsidy of any type. Senator MONRONEY. The whole operation has been built without subsidy? Mr. RIDDLE. For the average company trying to break in, I don't see how anybody can finance them for new equipment that would take 7 to 10 years depreciation. As we see the picture, our present operation, mostly with C-46's, we will go from that to the DC-6A, Constellations, or the turboprops. We expect to decrease our ton-mile cost from 10 cents, with our new work in the C-46, the DC-6A a little less, and we hope the turboprops, the jets, will be down around the 3- or 4-cent level. That may be wishful thinking. Senator MONRONEY. What about the Fokker that Fairchild is trying to build? Mr. RIDDLE. I have heard it is in the $500,000 range. Senator MONRONEY. It has a pretty heavy lifting capacity, hasn't it? Mr. RIDDLE. I am not familiar enough with it to give you an expert opinion on it. Senator MONRONEY. From what is heard among the contract people, the turboprop perhaps will be developed for great utility in the aircargo field. Mr. RIDDLE. We hear a lot of discussion on both sides. The large companies think it will go straight to jets, other manufacturers think the turboprop is the intermediate stage. It will be interesting to see how they develop. Senator MONRONEY. They can't develop much unless you have more than a year-to-year life? Mr. RIDDLE. Exactly. Senator MONRONEY. And all you want is the right to compete and be allowed to be on a permanent basis so that you can make arrangements for delivery to and from the airport, for ground transportation. and to establish customers that will be dependent on the type of serv ice that you can give. Mr. RIDDLE. More and more customers have the idea of air-cargo, and airfreight transportation. People are building small plants around airports where they have it more readily available. That is a very important factor in the growth of a community. Senator MONRONEY. In other words, this takes on a little different consideration in that the people who are served by airfreight have a different type of operation. Their whole business is built up on the frequency of service, low inventories, lack of a pipeline running back and forth from the factory to retail outlet. Therefore, in flowers and ready-to-wear clothes and many things you get a new type of service that only by air could exist at all. Is that not true? Mr. RIDDLE. Let me give you a few examples. I know several peo ple who were in the clothing manufacturing business in lofts around New York who have gone into business in or around Miami. Ther started out with 1 or 2 machines and developed their business by offer ing the same delivery time and the same price as though they were located right in New York City to the New York market. They are using nothing but airfreight. That is how they developed the busi ness. We have another customer in Orlando, Fla., who does all his business by mail order. Every order that comes in this afternoon, or today, is put on our plane tonight. It is prestamped, taken to Chicago, from where it goes to five States by post office out of Chicago. His business is purely mail order. He says that he has increased his business tremendously and cut down his returns to almost zero by using airfreight, where if he used straight mail it would take 2 weeks to get the stuff back. That is only a small item. This business brings in five or six thousand pounds a day from that one customer. He uses purely airfreight. Senator MONRONEY. You are certificated to how many points on your route, Mr. Riddle? Mr. RIDDLE. We are certificated to serve 30 cities. Senator MONRONEY. How many are you serving? Mr. RIDDLE. Sixteen on a regularly scheduled basis, five operated as flag stops. Senator MONRONEY. Sixteen out of thirty that you serve now? Is that correct? As regularly served stops? Mr. RIDDLE. Yes, sir. Senator MONRONEY. And five are flag stops? Mr. RIDDLE. Yes, sir. Senator MONRONEY. When you have freight for the place you stop? Mr. RIDDLE. Yes, sir. We have certain requirements. Certain times of the year we go into those flag stops almost regularly, such as the flower markets. Senator MONRONEY. Actually, to all intents and purposes you are practically serving 21 out of the 30? Mr. RIDDLE. That is right. Senator MONRONEY. In connection with the testimony of the CAB representative yesterday, in the event that we would grant permanent certification and would permit the serving of those places served by the airline at the time of the passage of the act-you have to have a cutoff someplace-you would be perfectly willing to accept that as a Toute structure, and if you needed other points you would feel free to apply to the CAB for permission to serve them, is that correct? Mr. RIDDLE. We would not expect permanent certification for any point we were not serving. Senator MONRONEY. Would it be possible to provide temporary certification? Mr. RIDDLE. We would like temporary certification for the other points. Senator MONRONEY. For the other points that you now have, and those could be picked up as permanent by perhaps authority of the Board on a short hearing notice once you were established in those points? Mr. RIDDLE. That would be very satisfactory. We think there are other places that may at certain times of the year develop. Senator MONRONEY. On those towns you are overflying today, the sooner you stop and pick those up and develop more freight on those lines, the sooner we will have a basis for airfreight? Mr. RIDDLE. We have a situation in Florida with a missile base. There was nothing there a few years ago. They will need our service there in a few months the way the place is growing. Senator MONRONEY. Under no circumstances are you asking for subsidy? Mr. RIDDLE. None whatever. Senator MONRONEY. And airmail subsidy is specifically exempted in this bill by the provisions of the bill on the last page, plus the fact that there are no other ways that subsidy could be paid? Mr. RIDDLE. We are not asking for subsidy of any type. Senator MONRONEY. The whole operation has been built without subsidy? Mr. RIDDLE. The whole operation has been built without subsidy. We just want the chance to grow and develop and prosper and be able to buy airplanes that will operate cheaper per ton-mile. If we can lower our costs we can get more cargo. It is a vicious circle. Senator MONRONEY. The cost of airfreight, since you have been operating all these years-you go back to 1946-has consistently gone down, has it not? Mr. RIDDLE. We were first operating in Brazil, a school there, running our personnel back and forth, plus supplies. Going through Puerto Rico the price was about $1 to $1.50 a pound to get to New York. By the time we got to operation it was 25 cents a pound. It is now about 15 cents. Senator MONRONEY. It has been the history of the all-cargo carriers that consistently they have brought the prices down as the load has gone up, as evidenced by the picture of your growth from less than 2 million pounds in 1948 to a point in 1957 where you apparently have reached 47 million pounds; is that correct? Mr. RIDDLE. The first year of our operation was 1,200,000 pounds, and last year it was 42 million pounds. And it has been a consistent growth. Some years have been slower than others. Senator MONRONEY. I think it is rather significant that you have more than doubled your service since January 1956. Mr. RIDDLE. We went into the Middle West. Before that we were operating New York-Miami-Puerto Rico. That has been a heavy growth. We started our Midwest service last January a year ago. It takes time to develop. Senator MONRONEY. Do you have a financial statement of the company that you could put in the record? Mr. RIDDLE. Yes, I will be happy to send that. Senator MONRONEY. We will put it in when we get it. We would like to have that since it was mentioned. Mr. RIDDLE. I will be happy to. Senator MONRONEY. Senator Schoeppel? Senator MONRONEY. We appreciate very much your coming before us to give us the advantage of your testimony. Mr. RIDDLE. Thank you. We appreciate very much the opportunity. (The matter referred to is as follows:) |