While acquisition of the S-58's marks an important advance in scheduled heli¬
copter transportation, this development has involved major outlays. The purchase
of these three aircraft (including spare engines and parts) has required a capital
commitment of some $1,200,000. In addition, the flight and maintenance costs of
the new equipment have also increased over those required for the smaller helicop¬
ters previously in operation, and substantial training and other integration expenses
have been incurred with respect to these new units of the Company's fleet.

In order to increase the utility of the S-58's on our routes, your Company, in
cooperation with the manufacturer, has developed a program for converting these
helicopters to amphibious configuration. Although difficult engineering problems
have been encountered, it is now anticipated that this program will be completed
during the Spring of 1957.

As a result of your Company's sound financial position, the substantial capital
outlays needed for the acquisition of these new helicopters have been financed en¬
tirely on a cash basis, and no resort to l)orrowings has been required.
 

MANHATTAN HELIPORT. In the latter part of 1956 your Company inaugurated
operations to the first commercial heliport to be established on Manhattan Island,
located at 30th Street and the Hudson River. As reported in prior years, the estab¬
lishment of such a facility has, from the beginning, been a principal objective of
your management. That this objective has now been attained is an impressive testi¬
monial to the interest of The Port of New York Authority (which has committed
some $500,000 to this project), of the City of New York, and of the other govern-
- mental agencies concerned with development of scheduled helicopter transportation.
The 30th Street heliport is only a beginning. It is planned that additional heli¬
ports will be constructed at other central locations in the New York Metropolitan
Area. The present plans of The Port of New York Authority with respect to these
additional facilities are shown by the inset map. The Port Authority is prepared
to make a further capital investment exceeding $15,000,000 for the development
of these plans, together with enlargement of the 30th Street facility.