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APPENDICES. APPENDIX I.—REPORT ON AVIATION. General. The period under review has been largely occupied by organizing and experimental work. The two companies— the N.Z. Flying-school, Kohimarama, and the Canterbury (N.Z.) Aviation Company (Limited), Christchurch—in existence during the war were running at a loss, on account of the cessation of training of pilots as candidates for service in the Royal Air Force ; and in order to keep them and their valuable staffs and plants available for the future development of aviation in the Dominion it was deemed advisable that they should be subsidized until such time as the aviation policy was formulated, when it was considered they would be in a position to pay their way. In addition to the two companies operating at the beginning of the year two new companies have been formed, and the list of aerial companies in the Dominion is now as follows : N.Z. Flyingschool, Kohimarama, Auckland ; Canterbury (N.Z.) Aviation Company (Limited), Sockburn, Christchurch ; N.Z. Aero Transport Company, Timaru ; N.Z. Aerial Transport Company, Hastings. The N.Z. Aero Transport Company commenced active flying operations on the Ist December, 1920, and tho N.Z. Aerial Transport Company on the Ist March, 1921. Air Policy. An aviation policy as set out hereunder received the approval of Cabinet on the 25th September, 1920 :— The Government to make provision for the development of aviation along lines which will enable the Dominion to possess civil aviation for commercial and other needs and at the same time to provide for the necessities of aerial defence in case of emergency. The Government to establish an Air Board (already constituted), which would act purely as an advisory body to the Government on — (a) Matters of defence, (b) commercial undertakings, (c) aviation generally. (a.) Defence. —To advise the Government with respect to — (i.) Purchase, rent, and preparation of key aerodromes: (ii.) Purchase and maintenance of war aeroplanes, and inspection of all aviation schools and their equipment by Defence staff: (iii.) Refresher courses for ex Royal Air Force pilots : (iv.) Defence machines which may be allotted to civil companies. Survey of routes to be undertaken by officers of the Aviation Branch of the Defence Department or any competent aviator deputed by the Air Board. (b.) Commercial. —As Defence aviation, owing to the great cost involved, cannot be developed without the development of the commercial side, the Air Board will advise the Government with respect to — (i.) Companies or private individuals that may be subsidized for the conveyance of mails, passengers, &c, on approved routes: (ii.) The allotment by way of loan or otherwise of Government machines: (iii.) Inspection of privately owned machines: (iv.) Regarding the reservation of rights of particular companies or individuals to fly for hire within prescribed areas. The Board to make recommendations as to contracts to bo entered into for the carriage of mails, passengers, &c. All contracts to be submitted for approval to the Minister in charge and the Post-master-General, and to be confirmed by both. (c.) General. —The Board to recommend in what direction assistance should be given to the Meteorological Department with a view to equipment to meet the needs of aviation. All reports and recommendations of the Board to be submitted to the Minister in charge and the PostmasterGeneral for their joint consideration. The Board to administer the details of the policy as defined by the Government. The Board to advise on the necessity for legislation and regulations regarding aviation generally. Gift Aeroplanes. The following aeroplanes were accepted as a gift from the Imperial Government, and have now all arrived in the Dominion : Two Bristol Fighter aeroplanes ; two D.H.4 aeroplanes ; nine D.H.9 aeroplanes ; twenty Avro aeroplanes. A supply of spare parts calculated on a six-months basis has also been received for engines and machines. Six of the aeroplanes are retained by the Government; the remainder were loaned to companies as set out hereunder for the development of civil aviation : N.Z. Flying-school—Six Avro aeroplanes, three D.H.9 aeroplanes; Canterbury Aviation Company (Limited) —ten Avro aeroplanes, two D.H.9 aeroplanes ; N.Z. Aero Transport Company —two Avro aeroplanes, four D.H.9 aeroplanes. Ground Organization. On the Ist April, 1920, there were only two aerodromes— i.e., the N.Z. Flying-school's seaplane station at Kohimarama, Auckland, and the Canterbury Aviation Company's aerodrome at Sockburn, Christchurch—with an area of 200 acres.