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The incentive to develop the maximum realizable level of nonmail revenues is embodied in the relatively rapid increase in rate of return with each increment in the load factor. Correspondingly, any additional economies effectuated by management which serve to reduce unit costs will inure to the carrier in the form of higher earnings.

The average mail load carried by Mid-Continent in the 12 months ended November 30, 1948, was 76.1 pounds per revenue plane mile flown, and the peak average load in any month was 102.8 pounds. It is believed, however, that the passenger load factors for the foreseeable future leave ample capacity to accommodate the maximum probable mail load in the future period, even after allowing for a substantial increase in mail volume which may develop in the future from air parcel post service. Accordingly, the sliding-scale mail rate will be prescribed without reference to a base poundage of mail.

CONCLUSION

On the basis of the foregoing considerations, we find that the fair and reasonable rates of compensation to be paid Mid-Continent for the transportation of mail by aircraft, the facilities used and useful therefor, and the services connected therewith between the points between which the carrier has been, or hereafter is, authorized to transport mail by its certificates of public convenience and necessity are as follows:

1. For route No. 80 only, for the period February 1, 1947, to January 18, 1948, inclusive, the sum of $225,123; 10

2. For the period January 19, 1948, to December 31, 1948, inclusive, the sum of $1,153,502; 11

3. On and after January 1, 1949, a base rate of 25.5 cents per airplane mile. The effective rates per airplane mile to be derived therefrom shall be computed without regard to any base poundage of mail and under the terms herein stated as follows:

(a) For each month during which the average daily scheduled mileage flown is not greater than the average daily designated mileage flown and does not exceed 20,000 miles, an effective rate per mile equal to the rate obtained by subtracting the product (not to exceed 15 cents) of 0.75 cent and the excess of the average passenger load factor (computed to the nearest hundredth of 1 percent) over a 50-percent load factor, from 25.5 cents.

(b) For each month during which the average daily scheduled mileage flown exceeds the average daily designated mileage flown but does not exceed 20,000 miles, an effective rate per mile equal to the product of the ratio of the average daily scheduled mileage flown to the average daily designated mileage flown and the rate obtained by subtracting the product (not to exceed 15 cents) of 0.75 cent and the excess of the average passenger load factor (computed to the nearest hundredth of 1 percent) over 50-percent load factor, from 25.5 cents.

(c) For each month during which the average daily scheduled mileage flown exceeds 20,000 miles, an effective rate per mile equal

10 This amount is equivalent to a rate of 29.37 cents per revenue plane mile flown in scheduled service on route No. 80.

11 This amount is equivalent to a rate of 15.05 cents per revenue plane mile flown in scheduled service over the entire system.

to the product of the ratio of the average daily scheduled mileage flown to the average daily designated mileage flown and the rate obtained by subtracting the product (not to exceed 15 cents) of 0.75 cent and the excess of the average passenger load factor (computed to the nearest hundredth of 1 percent) over 50-percent load factor, from the rate which bears the same relation to 25.5 cents as 20,000 miles bears to the average daily scheduled mileage flown.

The aforesaid rates per airplane mile shall be applied to, and the designated mileage flown shall be computed on, the direct airport-toairport mileage between points served for the carriage of mail on each trip flown on a schedule designated or ordered to be established by the Postmaster General for the carriage of mail; and the scheduled mileage flown shall be computed on the direct airport-to-airport mileage between points actually served on each trip flown in scheduled service, including all trips operated as extra sections thereto.

The average passenger load factor per month shall be computed to the nearest hundredth of 1 percent and shall be derived by dividing the total revenue passenger-miles flown in scheduled passenger service during the month by the total seat-miles operated during the month, the total seat-miles to be derived by multiplying the number of miles operated in scheduled passenger service with each type of aircraft by the following standard number of seats established for purposes of this computation for such aircraft:

DC-3 type aircraft-21 seats;

Martin 202 or Convair 240-type aircraft-40 seats;
All four-engine aircraft types-50 seats.

The compensation provided herein shall be in addition to the mail compensation heretofore received by Mid-Continent for mail transported from February 1, 1947, up to and including January 18, 1948, and shall be inclusive of and not in addition to the mail compensation heretofore received by the carrier for mail transported on and after January 19, 1948.

An appropriate order will be entered.

10 C. A. B.-206

APPENDIX No. 1

Traffic statistics for the past period and as estimated for a future year

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Computed on the basis of 190 pounds per passenger, including free baggage.

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APPENDIX No. 2

Operating results for the past period as reported and as adjusted

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