Evening star. [volume] (Washington, D.C.) 1854-1972, 1957-11-07
Capital Airline
Asks Subsidy ID
|0ffset Losses

| rNlJlilB NlALIIdA AAAdAACldA
condition" Washington based
Capital Airlines is asking the
Government for a mail subsidy
it has not had since 1851.
In a petition to the Civil
Aeronautics Board, Capital ex-
lpressed grave doubt" as to its
ability to continue its opera
tons without requesting sub
sidy and said the application
was being made with extreme
reluctance"
Company officials were quick
to deny any thought of a sale
or merger or of management
reorganization.
| Capital, as we'll as the Ma
tons other major trunk lines.
has made repeated requests for
flare increases from the CAB,
but the board recently rejected
Ian interim increase of 6 per
cent pending outcome of the
general rate investigation now
under way.
Hearing Set Nov. Is
A public hearing on the rate
case is scheduled for 10 am.
Monday, November Is in Room
B of the Departmental audi
forum. Any hope of quick &C
ton on rates will be dispelled
by considering the magnitude
of the procedure. One airline
alone is to present l,700 pages
of exhibits. 500 pages of tes-
timony and seven witnesses.
All of the domestic trunk
airlines have been off subsidy
since April /, 1854 when the
CAB ruled the Federal benefit
was no longer required.
At the time. the board estab-
lished a formula designed to
yield the airlines a service"
or nonsubsidy mail rate Of
about 1904 cents a mail ton
mile.
Withdraws From Order
| Capital, which has 3,700 en-
ployes in Washington and al
most 5000 ELSEWHERE on its
system, operates So turboprop
Vickers Viscounts and IS pis-
ton-engine aircraft to serve
over 80 cities.
1t recently withdrew from an
order for some $45 million
worth of British Comet jets
after establishing bank credit
for the amount. None of the
credit was used.
The petition to CAB said that
since June, 1865. when the
board fixed. the service rate,
Capital has experienced a
steadily worsening economic
position and the payments for
the carriage of mail pursuant
to the terms of that order are
no longer fair and reasonable"
The CAB has $37 1882, 900 APP
propriated for mail subsidies
going to local service and other
airlines-none of them the ma
jor trunk carriers.
More Routes Recommended
Earlier this week, the ex-
Iaminer recommended giving
Capital additional routes to in
Iclude nonstop service from
Buffalo, Pittsburgh and Cleve-
land to Florida points.
The petition cited net OPP
Grating income of only $494.-
loco on total operating revenues
lof about $50.8 million in 1855,
In 1856 the line received total
operating revenues of $63.7
million and suffered a net
operating loss of $2.9 million.
A projected profit and loss
statement for 1857, filed by
Capital in the pending rate
case forecasts total net loss
of over $2.5 million on total
operating revenues Of sos
million.
"a far greater loss for 1853
has been forecast by Capital in
its exhibits which have been
filed in the general passenger
fare investigation" the petition
said.
Filed Many Petitions
Capital repeatedly, through
sworn testimony, written petit
lions and oral arguments" has
called attention Of the board
to a critical financial condi-
ton" and that IAN emergency
situation existed"
In filing its statement Of POI
Sition for the general fare
probe. Capital asked for &c
per cent fare boost and esti-
mated it would receive over
SIG million in total operating