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The flight was planned as a night charter dinner flight over Melbourne. On board the De Havilland DH-104 were the pilot, a dinner hostess and eight passengers.

After carrying out engine runups and pre-takeoff checks, including selecting 20 of flap, the pilot initiated takeoff from Essendon Airport runway 17, some 23 minutes before last light. Wind conditions were light and variable. Just as take-off safety speed was attained, somewhere between liftoff and 50 ft, the right engine lost power and the aircraft yawed to the right. The pilot momentarily assessed the problem as a partial engine failure and selected the landing gear up, but the landing gear failed to retract. However, by recycling the gear selector he was then able to successfully retract the landing gear. By this time the airspeed had decayed to a point well below take-off safety speed, and continued decreasing to the minimum control speed (air). In order to maintain directional control the pilot reduced power on the left engine, but did not manage to raise the flaps or feather the right propeller before the aircraft crashed into a residential area adjoining the aerodrome. About one minute had elapsed from initiation of takeoff until the accident.

Investigation revealed that the vertical drive shaft, which drives the right engine fuel control unit, had failed in torsional overload when the geared fuel pump drive shaft in the fuel control unit had seized on its surrounding bush. Following the vertical drive shaft failure, the right engine failed due to fuel starvation.

Analysis of DH-104 performance indicated that, at the time of the right engine failure, it was possible for the aircraft to achieve a positive rate of climb, assuming that the engine failure drills were performed promptly and correctly, and proceeded without interruption. However, when the landing gear failed to retract on the first attempt, any possibility of the pilot being able to attain the required aircraft performance was lost. As a result, he was probably forced to abandon completing the emergency procedures in order to maintain control of the aircraft.

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