Allocation, bases of-bases of distribution whereby revenues, expenses, and/or costs are equitably apportioned among revenue, expense, property and equipment, and other accounts.

Amortization—the gradual extinguishment of an amount in an account by distributing such amount over a fixed period, over the life of the asset or liability to which it applies or over the period during which it is anticipated the benefit will be realized.

Asset, contingent-an asset the existence, value, or ownership of which depend upon the occurrence or nonoccurrence of a specific event or upon the performance or nonperformance of a specified act.

Associated company-a company in which the accounting air carrier holds 5 percent or more of the outstanding proprietary interest; or a company which holds 5 percent or more of the outstanding proprietary interest of the accounting air carrier; or a company that, directly or through one or more intermediaries, controls or is controlled by, or is under common control with the accounting air carrier. Companies owned or controlled jointly with other air carriers shall be regarded as associated companies for purposes of this system of accounts. (See also Control.)

Betterment-any improvement to property or equipment through the substitution of superior parts for inferior parts retired, the object of which is to make such property more useful or of greater capacity than at the time of acquisition or installation. (See also Modification.)

Board-the Civil Aeronautics Board. Cargo-freight plus express plus excess baggage. Excludes passengers and mail (priority and nonpriority).

Certificated point-a city, place or population center authorized to receive scheduled air service under a Certificate of Public Convenience and Necessity or under an exemption issued to an air carrier.

Certificate of Public Convenience and Necessity-a certificate issued to an air carrier under Section 401, of the Act, by the Civil Aeronautics Board authorizing the carrier to engage in air transportation.

Company, predecessor-an air carrier whose net assets and operations have been taken over by one or more other air carriers.

Compensation (of personnel)—remuneration to air carrier employees for personal services. Includes salaries, wages, overtime pay, cost-of-living differentials, bonuses, etc., as distinguished from per diem allowances or reimbursement for expenses incurred by personnel for the benefit of the air carrier.

48

Continental United States-the contiguous States and the District of Columbia.

Control (including the terms Controlling, Controlled by, and Under common control)—the possession, directly or indirectly, of the power positively to direct, or cause the direction of or negate the direction of, the management and policies of a company, whether such power is through one or more intermediary companies or alone or in conjunction with or pursuant to an agreement, and whether such power is established through a majority or minority ownership or voting of securities, common directors, officers, or stockholders, voting trusts, holding trusts, associated companies, contract, or any other direct or indirect means.

Cost-the amount of cash (or its equivalent) actually paid for property, materials and supplies, and services, including that amount paid to put the property or materials and supplies in readiness for It includes such items as transportation charges, installation charges, and customs duties, less any cash or other discounts.

use.

Cost, book-the amount at which an asset is recorded in an account without the deduction of amounts in related reserves or other accounts.

Cost, depreciated-the cost of property and equipment less the related reserves for depreciation.

Cost, removal-the cost of demolishing, dismantling, tearing down, or otherwise removing property and equipment, including the cost of related transportation and handling.

Debt, expense on-expenses incurred by or for the air carrier in connection with the issuance and sale of evidences of debt (exclusive of the sale of reacquired securities), such as fees for drafting mortgages and trust deeds; fees and taxes for issuing or recording evidences of debt; cost of engraving and printing bonds, certificates of indebtedness, and other commercial paper; specific costs of obtaining governmental authority for issuance and filing notices thereunder;

fees for legal services; fees and commissions paid underwriters, brokers, and salesmen for marketing such evidences of debt; fees and expenses of listing on exchanges; and other like costs.

Departures completed, percent scheduled the percent of scheduled departures that were performed.

Departures completed, scheduled-the number of take-offs performed at each airport pursuant to published schedules, exclusive of extra sections to scheduled departures.

Departure performed-a take-off made at an airport.

Departure,

scheduled-a take-off

scheduled at an airport, as set forth in published schedules.

Depreciation (of depreciable property and equipment) -the loss in service value, not restored by current maintenance, incurred in the course of service from causes known to be in current operation, against which the carrier is not protected by insurance, and the effect of which can be forecast with reasonable accuracy. The causes of depreciation include wear and tear, decay, action of the elements, inadequacy, obsolescence, changes in the art, changes in demand, and requirements of public authorities.

Discount (of securities issued or assumed by the air carrier)—the excess of (1) the par or stated value of securities over (2) the then current money value of the consideration received from their sale less the amount included for dividends or for interest accrued.

Equipment—tangible property other than land, structures, and improvements. Equivalent unit-a new unit substituted for an existing unit that is worn out, is damaged beyond repair, or has become inadequate in service, the substituted unit having substantially no greater capacity than the unit for which substituted.

Excess baggage-passenger baggage in excess of the fixed free weight.

Expense, capital stock-expenses incurred by or for the air carrier in connection with the initial issuance and sale of capital stock (exclusive of the sale of reacquired capital stock), such as fees and commissions paid to promoters, underwriters, brokers, and salesmen; fees for legal services; cost of soliciting subscriptions for capital stock; including fees, commissions, and advertising; specific costs of obtaining governmental authority for issuance and filing notices

thereunder; fees and taxes for issuance of capital stock and listing on exchanges; and the cost of preparing, engraving, printing, issuing, and distributing prospectuses and stock certificates.

Express-property transported by air under published air express tariffs filed with the Civil Aeronautics Board.

Flight, developmental—a flight for (a) the development of a new route either prior or subsequent to certification by the Civil Aeronautics Board; (b) the extension of an existing route; and (c) the integration of a new type of aircraft or service.

Flight, extra section-a flight, conducted as an integral part of scheduled service, that has not been provided for in published schedules and is required for transportation of traffic that can not be accommodated on a regularly scheduled flight. Flights made in ferrying aircraft to meet schedules, or for similar operational reasons, are not extra sections, and are classified as nonrevenue flights even if an occasional shipment, as a matter of special accommodation, is on board.

Flight, ferry-a flight for the purpose of returning an aircraft to base, equipment equalization, or moving an aircraft to and from a maintenance base.

Flight, personnel training-a flight for the purpose of obtaining flying time for flight personnel or a flight in connection with a personnel training program.

Flight stage-the operation of an aircraft from take-off to landing. For purposes of classifying flight stages as between "domestic", "territorial", and "international", technical stops are disregarded.

Freight-property transported by air under published air freight tariffs filed with the Civil Aeronautics Board.

Group basis (in depreciation accounting)-a plan under which (1) depreciation is based upon the application of a single depreciation rate to the total book cost of all property included in a given depreciable property and equipment account or class, despite differences in service life of individual items of property and equipment, (2) the full original cost, less any salvage realized, of an item of depreciable property or equipment retired is charged to the reserve for depreciation regardless of the age of the item, and (3) no gain or loss is recognized on the retirement of individual items of property or equipment.

Hop, inter-airport-a flight between two airports.

Horsepower, maximum continuous for reciprocating engines-the brake horsepower developed in standard atmosphere at a specified altitude and under the maximum conditions of crankshaft rotational speed and engine manifold pressure, and approved for use during periods of unrestricted duration.

Horsepower, maximum continuous for turbine engines-the brake horsepower developed at specified altitudes, atmospheric temperatures, and flight speeds and under the maximum conditions of rotor shaft rotational speed and gas temperature, and approved for use during periods of unrestricted duration.

Thrust, maximum continuous for turbine engines-the jet thrust developed at specified altitudes, atmospheric temperatures, and flight speeds and under the maximum conditions of rotor shaft rotational speed and gas temperature, and approved for use during periods of unrestricted duration.

Hours, aircraft-the airborne hours of aircraft computed from the moment an aircraft leaves the ground until it touches the ground at the end of a flight.

Hours, block-to-block (ramp-toramp)—the aircraft hours computed from the moment the aircraft first moves under its own power for purposes of flight, until it comes to rest at the next point of landing.

Hours flown, revenue aircraft-the aircraft hours of flights performed in revenue service.

Hours in capitalized projects, aircraft-aircraft hours applicable to ferrying newly acquired aircraft from the factory, to capitalized extension and development preoperating projects and to other costs which have been capitalized.

Hours per aircraft per day-carrier's equipment, revenue-average hours of productive use per day in revenue service of reporting carrier's equipment determined by dividing (1) Aircraft days assigned to service-carrier's equipment into (2) Revenue aircraft hours minus Revenue hours on other carrier's interchange equipment plus Total hours by others on the carrier's interchange equipment.

Hours per aircraft per day-carrier's routes, revenue-average hours of productive use per day in revenue service on reporting carrier's routes determined by

dividing (1) Aircraft days assigned to service-carrier's routes into (2) Revenue aircraft hours.

Improvement-an addition or alteration to land, a building, or a unit of equipment that results in a better piece of property, in the sense of greater durability, or in increased productivity or efficiency. (See also Modification.)

Insurance, self-the assumption by an air carrier of a risk of loss or liability arising from an accident or other contingent event.

Interchange

agreement-an agreement under which aircraft of one air carrier are utilized to provide one-plane service over its own routes and the routes of other air carriers.

Inventory, perpetual—a book inventory kept in continuous agreement with stock on hand by means of a detailed record.

Item, delayed-an item relating to transactions that occurred during a prior accounting period and that requires further accounting treatment for a true statement of financial condition or operating results. It includes adjustments of errors in the operating revenue, operating expense, and other income accounts for prior periods.

Liability, contingent-a possible source of obligation of an air carrier dependent upon the fulfillment of conditions regarded as uncertain.

Load, available-represents the maximum salable load. It is the allowable gross weight less the empty weight, less all justifiable aircraft equipment, and less the operating load (consisting of minimum fuel load, oil, flight crew, steward's supplies, etc.). For passenger aircraft, the available load must not exceed the weight of the maximum number of passengers who can be accommodated in the seats installed in the aircraft plus the weight of the traffic that can be accommodated in the cargo space.

Load, average revenue-the average total revenue tons carried in revenue services, determined by dividing total revenue ton-miles by aircraft miles flown in revenue services.

Load, average revenue passenger-average number of revenue passengers carried in passenger services, determined by dividing revenue passenger-miles by aircraft miles flown in revenue passenger services.

Load factor, over-all revenue-the percent that total revenue ton-miles (passenger plus nonpassenger) are of

available ton-miles in revenue services. Load factor, revenue passenger-the percent that revenue passenger-miles are of available seat-miles in revenue passenger services.

Load, minimum fuel-the minimum quantity of fuel with which an aircraft may be dispatched in accordance with the safety operating needs of the air carrier.

Load, salable-(See, Load, available.)

Mail, nonpriority-mail moving at service transportation rates lower than those established for mail bearing postage established specifically for air mail service.

Mail, priority-mail bearing postage at rates established specifically for air mail service or mail moving at service transportation rates equivalent to those established for air mail service.

Mile-a statute mile (5,280 feet). Miles completed, percent scheduled aircraft—the percent of scheduled aircraft miles which were performed.

Miles completed, scheduled aircraft— the aircraft miles performed on scheduled flights computed between only those scheduled points actually served.

Miles flown, aircraft—the miles (computed in airport-to-airport distances) for each inter-airport hop actually completed, whether or not performed in accordance with the scheduled pattern. For this purpose, operation to a flag stop is a hop completed even though a landing is not actually made. In cases where the inter-airport distances are inapplicable, aircraft miles flown are determined by multiplying the normal cruising speed for the aircraft type by the airborne hours.

Miles flown, nonrevenue aircraft-the aircraft miles flown on nonrevenue flights, such as ferry, personnel training, extension and development, and abortive revenue flights.

Miles, revenue aircraft-the aircraft miles flown in revenue service.

Miles, scheduled aircraft-the sum of the airport-to-airport distances of all flights scheduled to be performed over the air carrier's certificated routes pursuant to published flight schedules. Flights listed in the published schedules for operation only as extra sections, when traffic warrants, are excluded.

Modification-an alteration in a structure or unit of equipment that changes its design and is made to correct an error, increase production, improve

efficiency of operation, or for some other

reason.

Obsolescence-the process of becoming out of date due to progress of the arts and sciences, changed economic conditions, legislation, etc., which ultimately results in the retirement or other disposition of property.

Off-Line-installations maintained or facilities used for other than scheduled certificated air services.

On-Line-installations maintained or facilities used in conducting scheduled certificated air services.

Operations, domestic-flight stages with both terminals within territory under United States jurisdiction where the terminals are not separated by relatively substantial distances of foreign territory or international waters.

Operations, international-flight stages with one or both terminals outside of territory under United States jurisdiction.

Operations, system-the over-all operations of an air carrier including all of the operating entities of an air carrier having multiple operations.

Operations, territorial-flight stages with both terminals within territory under United States jurisdiction where the terminals are separated by relatively substantial distances of foreign territory or international waters.

Passenger-mile-one passenger transported one mile. Passenger-miles are computed by multiplying the aircraft miles flown on each inter-airport hop by the number of passengers carried on that hop.

Passenger-mile, nonrevenue-one nonrevenue passenger transported one mile. Passenger-mile, revenue-one revenue passenger transported one mile.

Passenger originations, number of online-the number of passengers boarding aircraft at the points of initial enplanement on the accounting carrier's operation with the return portion of a round trip counted separately as an initial origination. In addition, a passenger traveling on a carrier having two or more operating entities, for which separate reports are required by the Civil Aeronautics Board, is counted separately on each one.

Passenger, nonrevenue-person receiving air transportation from the air carrier for which remuneration is not received by the air carrier. Air carrier employees or others receiving air trans

portation against whom token service charges are levied are considered nonrevenue passengers. Infants for whom a token fare is charged are not counted as passengers.

Passenger, revenue-person receiving air transportation from the air carrier for which remuneration is received by the air carrier. Air carrier employees or others receiving air transportation against whom token service charges are levied are considered nonrevenue passengers. Infants for whom a token fare is charged are not counted as passengers. Premium (as applied to securities issued or assumed by the air carrier)the excess of (1) the then current money value of the consideration received from their sale, less the amount included therein for dividends or interest accrued, over (2) their par or stated value.

Property (as applied to traffic)-(See Cargo.)

Replacement-substitution of new for existing facilities that are worn out, damaged beyond repair, or have become inadequate in service.

Residual value-the predetermined portion of the cost of a unit of property or equipment excluded from depreciation. It shall represent a fair and reasonable estimate of recoverable value as at the end of the service life over which the property or equipment is depreciated and shall give due consideration to the proceeds anticipated from disposition of the property or equipment and the extent to which costs attaching to property or equipment are otherwise recoverable through charges against income.

Retirement-the permament withdrawal of assets from services of the corporate entity through sale, abandonment, demolition, or other disposal.

Retirement, date of the date on which property or equipment is permanently withdrawn from services of the corporate entity.

Route, certificated-The route over which an air carrier is authorized to provide air transportation by a Certificate of Public Convenience and Necessity issued by the Civil Aeronautics Board pursuant to section 401(d) (1) or (2) of the Act.

Salvage value-the amount received for property retired, less the expenses incurred in connection with the sale or in the preparation of the property for sale; or, if retained, the amount at which the material recovered is charged to ma

terials and supplies or other appropriate account.

Schedule, published—an official schedule of an air carrier on file with the Civil Aeronautics Board.

Seats available-installed seats in an aircraft (including seats in lounges) exclusive of any seats not offered for sale to the public by the carrier; provided that in no instance shall any seat sold be excluded from the count of available seats.

Seats, average available—the average number of seats available for passengers, determined by dividing available seatmiles by revenue aircraft miles flown in passenger service.

Seat-miles, available-the aircraft miles flown on each inter-airport hop multiplied by the number of seats available on that hop.

air

Service, charter-nonscheduled transport service in which the party receiving transportation obtains exclusive use of an aircraft at published tariff rates and the remuneration paid by the party receiving_transportation accrues directly to, and the responsibility for providing transportation is that of, the accounting air carrier.

Service, coach (tourist)-transport service specifically established for the carriage of passengers at special reduced passenger fares that are predicated on both the operation of specifically designated aircraft space and a reduction in the quality of service regularly and ordinarily provided.

Service, combination passengertransport service for the carriage of both first class and coach (tourist) passengers on the same aircraft.

Service, irregular (excluding charter and special)—nonscheduled inter-airport air transport services which do not constitute an integral part of scheduled services to certificated points, where each passenger or property shipment is individually documented at published tariff rates (other than charter rates) and the remuneration paid by each party receiving transportation accrues directly to, and the responsibility for providing transportation is that of, the accounting air carrier.

Service, first class-transport service established for the carriage of passengers moving at either standard fares or premium fares, or at reduced fares not predicated upon the operation of specifically allocated aircraft space, and for whom