Delta Air Lines annual report 1951

Annual Report
1951
DELTA AIR LINES, INC.
*C. E. Faulk, Chairman
Richard W. Courts
R. W. Freeman
Edward H. Gerry
L.B. Judd
C. H. McHenry
Winship Nunnally
Travis Oliver
Laigh C. Parker
Richard J. Reynolds
D. Y. Smith
C. E. Woolman
:Deceased August 31, 1951
C. E. Woolman
President and General Manager
Laigh C. Parker
Vice President of Traffic and Sales
Charles H. Dolson
Vice President of Operations
Travis Oliver
Treasurer
C. H. McHenry
Secretary
L.B. Judd
Comptroller
Catherine FitzGerald
Assistant Treasurer
Citizens & Southern National Bank
nn.t~~ia
Trust Company of Georgia
Atla11ta, Georgia
\
)~
1951 of/-nnual ~eport to the Stockholders
OPERATING RESULTS FOR THE YEAR
Earnings and Dividends
Gross revenues of $22,220,999 for the year
ended June 30, 1951 were the highest in your
Company's history, representing an increase of
$5,036,000 (29%) over the preceding year.
With expenses $3,114,000 more than for the
preceding year ( up 20%), operating profit
increased 136% to $3,331,798. Net earnings,
after provision for federal and state income
taxes of $1,625,000, were $1,631,798, equiv-
alent to $3.26 per share and slightly more than
double the $815,751 earned the preceding year.
June 1951 marked the 47th consecutive month
of profitable operations.
Notwithstanding the sharp increases in gen-
eral price levels, the cost per available ton mile
continued the trend of recent years and, upon .
an increase of 21 % in available capacity oper-
ated, dropped to a new low of 26.2 as com-
pared to 26.5 for the preceding year. This re-
duction, coupled with the higher revenue loads
carried during the year, reduced the cost per
revenue ton mile to 46. 7 , substantially below
the 57.9 for the year before.
Three cash dividends of 25 each were de-
clared during the year (in September, 1950 and
March and June, 1951), thereby continuing
a dividend record that has become the out-
standing one in the industry.
Traffic Increases
Substantial increases in all categories of traffic
were experienced during the year, in common
with the industry as a whole. The following
schedule outlines the increases over the pre-
ceding year - it is particularly significant that
an increase of 45% in passenger miles was
achieved by an increase of only 24% in avail-
able seat miles.
Years Ended June 30
%
1951 1950 Increase
Available seat miles 541,037,924 437,209,218 24%
Revenue passenger miles 345,245,543 238,334,633 45
Mail ton miles 1,508,963 1,017,026 48
Passenger load factor 63.8% 54.5% 17
Express ton miles 1,256,453 823,423 53
Freight ton miles 3,687,228 2,386,101 55
Excess baggage ton miles 412,074 316,216 30
Total revenue ton miles 40,479,690 27,258,914 49
These increases in traffic and revenue are
attributable to several factors -
a Intensified ~dvertising and promotional cam-
paigns. Total advertising expenditures were
4.4% of non-mail revenue, as compared to
4.1 % for the preceding year. A national
magazine advertising program, the first in
several years, was conducted. One promo-
tional measure in particular received wide-
spread attention - the Vacation Incentive
Plan, under which Delta all-expense vacation
trips are awarded by other organizations as
employee prizes, with Delta providing liter-
ature, posters, folders, etc. for the contests.
b Continuing emphasis on all-expense vacation
trips, to stimulate off-season travel to the
Florida resort area.
7
6
s
4
3
,,----,,.-
RETURN PER REVENUE PASSENGER MILE
(IN CENTS)
,,,,, r---
,Jil
--.,,,,,,,.., I._ _.... tr
"""I---
~
41 42 43 44 4S 46 47 48 49 SO S 1
c A continuation of special rate inducements,
such as roundtrip discounts, aircoach fares,
the family plan, and summer excursion fares.
d Maintenance of the fare level, in spite of the
general upward trend in prices.
e The accelerated economic activity associated
with the Nation's rearmament.
Reduced Mail Pay
One of the outstanding accomplishments of
the year was the substantial reduction ( 45%) in
revenues received for the carriage of U.S. Mail,
made possible by the increases in non-mail rev-
enues. The formula by which our mail pay is
determined provides for reduction in mail pay
as passenger load factors increase, and mail
revenue for year constituted only 5.9% of total
revenues. A picture more indicative of our cur-
rent situation is presented by the following
summary of mail revenue by quarters, ex-
pressed as a percentage of total revenues:
Quarter
Ended
9-30-50
12-31 -50
3-31 -51
6-30-51
PERCENTAGE OF MAIL REVENUE
TO TOTAL REVENUE
3.8%
10.5%
7.3%
Delta is winning nation-wide acceptance
through advertising in national magazines,
in addition to strong focal programs in
system newspapers and on television.
OPERATING EXPENSES
%
Salaries, Wages and Welfare $ 8,663,234 45.9
Gasoline and Oil 2,941,524 15.6
Maintenance and Repair Materials 1,454,787 7.7
Depreciation
Rentals and Landing Fees
Advertising
Passenger Expense
Taxes (Excluding Income Taxes)
Insurance
Communications Charges
Office Supplies
Employee Travel Expenses
Outstanding Services
Miscellaneous
1,389,721 7.4
411,461 2.2
841,418 4.4
546,037 2.9
535,373 2.8
538,727 2.8
319,397
107,810
385,285 8.3
266,096
488,331
$18,889,201
For the last six months of the fiscal year our
mail revenue was equivalent to 5 7 per ton mile
of mail actually carried. Elsewhere in this report
there is a brief discussion of the mail pay sub-
sidy question, but we feel confident that no
portion of our mail revenues at this level can
be considered subsidy. This is particularly evi-
denced by the fact that mail revenue of $1,307,-
000 was less than Federal Income Taxes of
$1,534,000.
FINANCIAL CONDITION AT THE
CLOSE OF THE YEAR
Worldng Capital
On June 30, 1951 current assets exceeded
current liabilities by $2,643,250, reflecting an
increase of $423,102 in net working capital
during the year. This increase was obtained even
after the use of $900,000 of current funds for
the purchase of a seventh DC-6 airplane; the
significant changes in net working capital dur-
ing the year as shown in the table on the
following page. (The Civil Aeronautics Board
prescribed changes in our accounting system
during the year which require for the first time
classification of Prepaid Expenses and Un-
earned Transportation Revenue as Current
Assets and Current Liabilities, respectively.)
Bank Loans Outstanding
At the close of the year there remained out-
standing $1,700,000 of bank loans made pur-
suant to the Credit Agreement of November
3
OPERATING
REVENUES
%
86.7 $19,258,182
5.9 1,306,752
1,095,199
2.5 560,866
$22,220,999
MILLIONS TON MILES VS PLANE MILES
42
39
36
33
30
27
24
TON MILES
(Millions)
----
/
"
'
I
I
,
/
21
18
15
12
' " /
--
9
6
3
0
-~~
,
"---"
,,.
"' ,/
--.,
/,
.,
p~_. .. ,/\
" " I
I'>:;:: 4
PlANEMIIIS , ,._
lMillionsl-s ,
41 42 43 44 45 46 47 48 49 so 51
OPERATING EXPENSE & PROFIT PER PLANE MILE
$1.60 ~--~~-..-----.----r-..----.-----,,---,
1.40 1-+--+----+--+----'--.L---+--+---+--+-:all'I
1.20 l-+--+---,l,.~;;;;;=_=.::.:.-,-
,+-r--+--+--:..,,,.9--~
1.00 .._._____..__,_,
.80 l-+-----l'#-.4lo,~....,..+-:a,..q..--,h---+---+~~i-4
.60 l-+--4.-........ -.a.r--a..__...;.,...,_-...... ..... +--+-~ ..... ---t
.40 LL.-L--l--_.;__.a.....1_;..i._;.....1.:..._.~ ....... ..........
.20 J-+._,.___.,._....__.__~-+--+--+---+-~
.0
41 42 43 44 45 46 47 48 49 so 51
OPERATING EXPENSE & PROFIT PER TON MILE
$1.00
.90 ~-.L----1---.L----1---+---4--4-----4---+-----l
.80 1--1---1-----+---1----+---1----+--+---+--+-~
.70
.60~~ ~~-....-,.<-r-+--+-----.E:a,llll!l
.so
.40
.30~~~
.20
.10 LJ.. _ _.____._._ ........ ___._ ____ ......... __.__ ......___. _ __.____.
41 42 43 44 45 46 47 48 49 so 51
Passengers
Mail
Freight and
Express
All other
CHANGES IN WORKING CAPITAL
Working Capitol as of July 1, 1950 -
Current Assets
Less Current Liabilities of
Additions to Working Capital were provided by-
Net Profit for the Year
Expenses not requiring cash expenditures:
Depreciation $1,339,363
Net increase in reserve
for aircraft overhaul 103,214
Amortization of DC-6
$5,170,591
2,950,443
$1,631 ,798
prei naugural expenses
Miscellaneous
39,952 1,482,529
Working Capital was used to -
Purchase operating property and equipment
Flight equipment (including improve-
ments and modifications) $1,264,945
Other property and equipment 230,069
Reduce bank loons
Pay dividends
Net increase for the year
Working Capital as of June 30, 1951 -
Current Assets
Less Current Liabilities of
103,789
$3,218,116
$1,495,014
925,000
375,000
$2,795,014
$7,184,532
4,541,282
16, 1946. The first borrowing will be fully re-
paid in January, 1952, and a continuation of
the present repayment schedule will completely
liquidate all borrowings in March, _195 3.
Stockholder Equity
At the end of the year there were approxi-
mately 1,700 stockholders, in 37 states and
three foreign countries. Their equity in the
company of $8,658,043 as of June 30, 1951 rep-
resents a net book value of $17.32 for each of
the 500,000 shares of common stock outstand-
ing, an increase of $2.51 during the year. Total
REVENUE MILES and PASSENGERS
~
/
REVENUE
PASSENGER MILES
(Millions)
$2,220,148
423,102
$2,643,250
New Cincinnati ticket office continues a consis-
tent architectural program for entire system.
assets per share also increased, from $24. 7 4 to
$28.80, and total debt of $1,700,000 is equiva-
lent to only 20% of stockholder equity.
MAJOR DEVELOPMENTS DURING THE YEAR
Merger Agreement with Northeast
In September, 1950 an agreement between the
Directors of your Company and the Directors
of Northeast Airlines was executed provid-
ing for the merger of Northeast with and into
Delta, including provisions for the participa-
tion of other carriers that would contribute to
REVENUE PASSENGER MILES 1949-50-51
.....
I I I I I ~ ...........
16
15
14
13
12
11
10
J~
~
....
-----~ ~
.___
.___
~ - { YEAR ENDED JUNE 30, 1951 I ['-.
LEGEND YEAR ENDED JUNE 30, 1950
I "
_ -YEAR ENDED JUNE 30, 1949 ~
9
f
,
IJ
- REVENUE J ,.
MILES FLOWN 7 /
- Un Mil~ons) 7 -- --
' ~ /
~ / / , REVENUE -
- --- _.,,,.,,.
PASSENGERS CARRIED
.J" 1/n Hundred Thousands)
-
, ----
"1111111"""
,
..ill ,,, AIRCOACH
~ ~---
,
SERVICE .i" .. 41
INAUGURAnD
....
~
....
.....- .I 12-15-49
..
~
. . . . . L .
I ..._
........ ~ I J. .. / r---.....
/./ / ... r-,....,_
--
..... ...... -"' ~
-
- ............ ~~ >- DC-6's PLACED IN SERVICE
--
.-
,i,-
I 12-1-41 I
41 42 43 44 45 46 47 48 49 so S 1
40
38
36
34
32
30
28
26
24
22
20
18
16
14
12
JULY AUG. SEPT. OCT. NOV. DEC. JAN. FEB. MAR. APR. MAY JUNE
4
Delta's new ticket office in New Orleans combines
modern design with appealing local flavor.
the route pattern sought to be established. This
agreement requires the approval of the stock-
holders of both companies and of the Civil
Aeronautics Board. The initial procedural steps
toward CAB approval began in September,
1951, but there is no indication at this time as
to when final decision may be expected.
Consummation of this merger, and acquisi-
tion of the necessary connecting route mileage,
will produce an air transportation system fifth
in size in this country (present positions: Delta-
7th, Northeast-13th). Our studies indicate that -
the combined operation would produce 5 5%
more revenue than the total produced by the
two companies individually. Such a system, with
the available traffic potentials and opportun-
ities for operating economies, would be a prof-
itable and financially self-sufficient operation,
and would provide needed service between
Southern cities and the New York-Boston area.
Major benefits to the traveling public and the
Nation's air transportation system which would
result are such that both companies will press
for early CAB approval of the transaction.
Delta's public is constantly
reminded of service
through radio and
outdoor advertising.
Equipment Interchanges
In January, 1951 the Civil Aeronautics Board
approved permanently the interchange agree-
ment between Delta Air Lines and American
Airlines providing through-plane service be-
tween Atlanta and the West Coast, via various
intermediate cities on the routes of both car-
riers, which had been conducted since Septem-
ber, 1949 under a temporary approval. The
Board concurrently recommended that through-
plane service betwen Miami and the West Coast
be established over the routes of Delta Air
Lines, National Air Lines, and American Air-
lines, as a substitute for the through-plane serv-
ice between these areas which had also been
conducted by Delta and American since Sep-
tember, 1949, and this recommended service
was inaugurated in May, 1951. The actions of
the Civil Aeronautics Board in this connection
constitute a portion of its decision in the South-
. ern Service to the West route case ( involving
. the applications of several carriers to establish
a new southern transcontinental route), in
which all applications for new route mileage
were denied. Your Company, the pioneer in
post-war equipment interchanges, now operates
three daily roundtrip flights providing through-
plane service between Atlanta and California in
conjunction with American Airlines, two daily
roundtrip flights providing Miami-California
service in conjunction with American Airlines
and National Airlines, and two daily roundtrip
flights providing service between Detroit and
certain cities on our system, in conjunction with
Trans World Airlines.
Subsidy Separation Legislation
The last two Annual Reports have apprised
you of developments in the investigation of
airline operations begun by the Senate Inter-
state and Foreign Commerce Committee in the
early months of 1949, particularly with respect
to the subsidy, if any, included in payments to
the carriers for the carriage of U.S. Mail. Initial
phases of the investigation convinced the com-
mittee that any portions of mail payments which
might properly be classified as .. subsidy" were
actually subsidies for the benefit of the com-
munities receiving airline service and did not
represent subsidization of the airlines in any
respect. As a further exploratory measure, a
national accounting firm was commissioned to
devise a method of determining the profit or
loss developed for the airlines by each city re-
ceiving air service. Several bills affecting the
issue of subsidy determination and separation
were' introduced in the 82nd Congress. Your
President was among the numerous airline and
government officials who appeared before the
Committee on this vitally important matter,
and excerpts from his testimony are set forth
on the inside back cover of this report.
ROUTE APPLICATIONS
Awaiting Board decision is Delta's applica-
tion .for approval of a more flexible all-cargo
service on Routes 24 and 54, approval of which
has been recommended by the Examiner.
Other applications on file with the Civil
Aeronautics Board and awaiting hearings are
as follows:
1 Extensions of Routes 24 and 54 from Co-
lumbia to New York via Fayetteville and
Wilson, North Carolina; Washington and
Philadelphia.
2. Extension of Route 54 from Chicago to
Minneapolis/St. Paul via various interme-
diate stations.
3. Extension of Route 54 from Miami to
Havana.
4. Extension of Route 24 from Shreveport to
Oklahoma City.
6
I
I
I
I
I
I
I
I
I
I
I
I
I
--
--
--
--
--
---
-----
---
--
EQUIPMENT
Purchase of Convair Aircraft
In June, 1951 a contract was executed for the
purchase of 10 Model 340 Convair aircraft
from Consolidated Vultee Aircraft Corporation
which, together with necessary spares and re-
pair parts, will require a capital outlay of some
$6,500,000, approximately $6,000,000 being
committed as of June 30, 1951. This selection
was made only after very detailed studies of all
available models and their adaptability to our
route pattern, which showed that this aircraft
( a larger, faster, and improved version of the
model 240 that has rendered splendid service
for several years) will prove as superior in the
field of local and semi-local service as the DC-6
has been in the express service field. The first
Convair 340 is scheduled for delivery in Oc-
tober, 1952, and the others will follow at the
rate of one a month thereafter.
Acquisition of Seventh DC-6
A seventh DC-6 was placed in service in
January, 1951, and these seven high-speed lux-
ury aircraft now provide approximately 50%
of the seat miles operated by the total fleet,
7
which at year-end consisted of the seven DC-6's,
6 DC-4' s, ( one of which was returned to Korean
Airlift service in August, 1951 ), 17 DC-3's, and
3 C-47 all-cargo aircraft.
Modernization of DC-3's
A DC-3 modernization program was begun
during the year, increasing seating capacity
from 21 to 2 5 and providing such other new
features as carry-on luggage racks, let-down
doors with integral passenger steps, and foam-
rubber upholstered seats. These modifications
are being accomplished in our shops, and ten
of the seventeen DC-3's were completed at the
year's end. The results to date amply justify
this modernization program.
\\\\\\\\) \\~\
A Delta modernized DC-3 with air-stairs
built integrally with door.
New 44-passenger Convair liner,of which
Delta will receive 10 in 1952.
PERSONNEL
The increased revenues and volume of service
required the net addition of 269 employees
during the year, bringing the total to 2,362.
A general increase in wage and salary scales
effective December 1, 1950, and the usual merit
and length-of-service raises, combined to pro-
duce an even greater increase in employee earn-
ings, which were at the all-time high of
$8,382,000 for the year and were at an annual
level of $9,200,000 for the last month of the
fiscal year reported here.
A company prospers and grows
through the loyalty and initia-
tive of its employees, and this
is particular! y true of a
company selling the
Delta1 s Miami Beach promotion
has contributed importantly
to making this terminal
an all-year vacationland.
NUMBER OF EMPLOYEES AND
LENGTH OF SERVICE
As of June 30
Years in
1948 1949 1950 1951
Service
20 YEARS
4 5 5 5
AND OVER
l 5-20 5 5 19 31
l 0-15 55 53 65 107
5-10 241 295 346 689
1-5 1285 1380 1428 895
LESS THAN
503 381 230 635
1 YEAR
TOTALS 2093 2119 2093 2362
intangible of service. Your Company is for-
tunate in having a group of employees who
fully realize that their future is closely allied
to the Company's future, and therefore is most
happy to continue its support of such em-
ployee benefits as the Credit Union ( total assets
of $225,000), the Group Insurance program
(benefit payments of over $100,000 annually),
and the Retirement Plan. In addition, during
the year employees used free transporta,tion
worth $400,000 at tariff rates.
The entire cost of the Employee Retirement
Plan, established in 1942, is presently borne by
the Company. Consideration is being given to
amending the Plan to place it on an employee-
contributory basis with higher retirement bene-
fits, in response to employee requests, and to
reflect the changes which have recently occurred
in the Federal Social Security program.
OUTLOOK FOR THE FUTURE
Current traffic trends are very encouraging,
with gross revenues for July and August, 1951
33% over the corresponding months of 1950.
Although expenses continue to rise, the increas-
ing volume of service resulting from this
heightened traffic demand has permitted a
stabilization of unit costs, and reasonably prof-
itable operations may be anticipated for the
immediate future.
Funds accumulated from depreciation of
equipment are generally inadequate for the
replacement of that equipment when it becomes
9
Delta maintenance continues to set new high standards
in an industry which brooks no compromise with safety.
Years Ended
1948 1949 1950 1951
June 30
Seat Miles
per Employee 166,860 170,457 208,891 229,059
Revenue Ton Miles
per Employee 9,540 10,762 13,024 17,138
Available Ton Miles
per Employee 22,246 23,486 28,443 30,477
obsolete because of the higher price levels now
prevailing. Some measure of financing will un-
doubtedly be necessary for purchase of the 10
Convair 340 aircraft now on order.
The Civil Aeronautics Board has publicly
expressed itself in favor of voluntary mergers of
airlines as a corrective measure for some of the
uneconomic route structures that have devel-
oped through the years, and there are indica-
tions that route realignments are also being
considered.
Now more than ever before it behooves every
stockholder and every employee to do his
utmost to maintain their Company in a sound
financial condition. One additional passenger
on every flight would add almost $1,000,000
a year to revenues, and we urge every stock-
holder and employee to continue their efforts
as an active member of Delta's sales staff.
President and General Manager
DELTA AIR LINES, INC.
ATLANTA, GEORGIA
I
BALANCE SHEETS JUNE 30, 1951 AND 1950
CURRENT ASSETS:
Cash ..................................................... .
U.S. Government securities, at cost ............................ .
Receivables -
U. S. Post Office Department , for carrying mail .............. .
Traffic (net) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other ....................................... , .......... .
Maintenance and operating supplies, at average cost .............. .
Other current and accrued assets ............................... .
Total current assets .................... .
INVESTMENTS:
Net assets of dusting division ................................. .
Other investments .......................................... .
OPERATING PROPERTY AND EQUIPMENT
(Including $4,455,390 and $2,325,000 fully depreciated in 1951 and 1950, respectively}:
Cost-
1951
1950
Reserve for depreciation -
1951 .......................... .
1950 .......................... .
DEFERRED CHARGES:
Flight
Equipment
$10,530,540
9,293,649
5,523,701
4,428,360
Other
Property and
Equipment
$2,975,037
2,782,830
1,075,167
881,315
Advances for leased facilities, being amortized ................... .
Other deferred charges ...................................... .
NOTE:
1951 1950
$ 3,751,570 $ 1,647,133
300,000 1,050,000
90,068 170,590
1,217,014 680,396
315,118 370,805
1,373,528 1,120,852
137,234 130,815
$ 7,184,532 $ 5,170,591
---- - - - -
$ 93,901 $ 92,293
17,584 79,051
$ 111,485 $ 171,344
- - - - - - - -
$13,505,577
$12,076,479
6,598,868
5,309,675
$ 6,906,709 $ 6,766,804
---- - - - -
$ 151,339 $ 134,363
47,985 128,749
$ 199,324 $ 263,112
- - - - - - - -
$14,402,050 $12,371,851
Commitments made for the purchase of ten Model 340 Convair-Liner aircraft and related
spare parts aggregated approximately $6,000,000 at June 30, 1951. Delivery of one plane
each month is scheduled to begin in October 1952.
10
CURRENT LIABILITIES:
Current maturities of long-term debt .......................... .
Accounts payable and accrued liabilities ......................... .
Accrued Federal and state income taxes ......................... .
Unearned transportation revenue ............................. .
Dividends payable July 17, 1951 ............................... .
Air travel plan deposits ...................................... .
Total current liabilities ................. .
LONG-TERM DEBT:
Notes payable to banks, 21/2%, due serially to 1953 (less current ma-
turities included above in current liabilities) ........ '. .......... .
RESERVES, ETC.:
Reserve for aircraft overhaul .................................. .
Def erred credits ............................................ .
CAPITAL STOCK AND SURPLUS:
Common stock, $3.00 par value - Authorized 1,000,000 shares
Issued and outstanding 500,000 shares ........................ .
Capital surplus (principally net premium on sale of common stock) -
No change during year .................................... .
Earned surplus ( of which $500,000 under the terms of the bank loan
agreement is not available for the payment of dividends) ........ .
1951
$ 700,000
1,560,787
1,649,429
338,191
125,000
167,875
$ 4,541,282
----
$ 1,000,000
$ 196,416
6,309
$ 202,725
$ 1,500,000
3,717,329
3,440,714
$ 8,658,043
- - - -
$14,402,050
1950
$ 1,000,000
1,016,440
631,137
170,691
132,175
$ 2,950,443
- -- -
$ 1,925,000
$
$
$
$
93,202
1,961
95,163
1,500,000
3,717,329
2,183,916
7,401,245
- - - -
$12,371,851
Statements of Income For the Years ended June 30, 1951
OPERATING REVENUES:
Passenger .... . ... . .............. .. .... . .............. . . . ........ .
Mail ... . .................... .. . . ... . .. . ..... . ......... . ........ .
Freight ................ . ... . ..... . ... .. ......... . .............. . .
Express ............................ . ............. . ..... . ........ .
Charter ........................... . ........ . ....... . . .. . ......... .
Excess baggage ................. . ............ .. ................... .
Other revenue, net .. . ... . ..... .. . . .. . ............................. .
Total operating revenues ....... . .......... . ......... .
OPERATING EXPENSES:
Flying operations .......... . ................... .. .......... . ..... .
Direct maintenance - flight equipment ............. . ...... . ..... . ... .
Depreciation - flight equipment .. .... . ... . ......... .. . ~ . . .. .... .. . .. .
Total direct aircraft operating expenses ................ .
Ground operations .. . ................. .. . . ... . ....... .. ... .. ..... .
Ground and indirect maintenance ... . . . . . .... . . . ... . .. . .. . .. . ....... .
Passenger service . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Traffic and sales .............. . ................. ..... .. .. .. . .... .. .
Advertising and publicity ........ . .. . .. . .. . .. .. . . ....... . .. . .. . .... .
General and administrative ... . ... . ............. . . . ... . . . .. . ....... .
Depreciation - ground equipment .................................. .
Total operating expenses ....... . . .. . . ... .. . . . . .. . ... .
Net income from operations, before income taxes ........ .
OTHER INCOME (EXPENSE):
Interest expense (including $65,168 in 1951 for interest in connection with
Federal tax case involving prior years) . . ..... .. . .. ...... . .......... .
Net profit of dusting division .............. . ...................... . . .
Other income - net ..................... .. ............ . ..... . ..... .
Net income, pefore income taxes .. . ...... . . . ..... . .. . . .
PROVISION FOR FEDERAL ($1,534,000 IN 1951 AND $534,000 IN 1950)
AND STATE INCOME TAXES <Notel
Net income ... . .... . .. . ........ .. . .. ......... . .... .
NOTE: The provision for Federal income taxes for the fiscal year ended June 30, 1951 has been computed on the
basis of the tax rates in effect at June 30, 1951. The Company has no excess profits tax liability for that year.
and 1950
1951
$19,006,936
1,306,752
720,719
374,480
456,014
251,246
104,852
$22,220,999
- - - -
$ 5,678,814
2,495,048
1,170,421
$ 9,344,283
2,630,837
1,250,629
1,336,457
1,938,720
932,536
1,236,439
219,300
$18,889,201
- - - -
$ 3,331,798
- - - -
($ 115,556)
25,624
14,932
($ 75,000)
- - - -
$ 3,256,798
1,625,000
$ 1,631,798
Statement of Earned Surplus For the Year Ended June 30, 1951
Balance June 30, 1950 .... . ........ . ........... . ............. .
Net income for year ended June 30, 1951. ..................... . . .
Dividends (cash) on common stock (75 per share) .............. .
Balance June 30, 1951 ( restricted as indicated on balance sheet) .... . .
$2,183,916 t
1,631,798 f
1950
$13,761,453
2,373,213
478,537
238,441
29,428
186,706
117,517
$17,185,295
----
$ 4,703,129
1,861,074
999,446
$ 7,563,649
2,421,308
1,051,776
1,056,959
1,766,616
599,662
1,107,862
207,309
$15,775,141
----
$ 1,410,154
----
($ 84,432)
60,468
18,561
($ 5,403)
----
$ 1,404,751
$
589,000
815,751
$3,815,714
375,000
$3,440,714
Excerpts from Testimony of
C. E. Woolman
Before the Senate Interstate and Foreign
Commerce Committee
July 20, 1951- Senate Bill 1657 ( as intro-
duced) directs the Postmaster General to pay
air carriers for the transportation of airmail
at a base rate per ton mile. It then provides
that regional or secondary air carriers shall
be paid at 150% of this base rate ... Delta
Air Lines would undoubtedly be classified as
a regional or secondary air carrier.
Throughout the years, Delta has enjoyed
an acknowledged reputation as a low-cost
carrier. In fact, our costs compare very favor-
ably with those of the so-called "Big Four".
We want to be able to compete with the
larger airlines in seeking the business of the
Post Office Department and we pref er that
Congress not require the Postmaster General
to pay us a rate which is higher than that of
our competitors.
For the long haul, high volume transpor-
tation of mail, our rates should be compar-
able to those of the "Big Four". For short
haul, low volume, small package transporta-
tion, rates should reflect the difference in
cost of such services for all carriers, although
this differential is more vital to the regional
carrier.
If the carriage of mail resembles any of
the other services performed by an air carrier,
it is the transportation of air freight, but
the air mail rate should be higher than the
air freight rate, for the carrier must give mail
priority over air feight and over express and
passengers as well.
Our studies indicate that we would have
received more revenue carrying mail at air
freight rates on all flights in May, 1951, than
we did at our present mail rate.
It is our hope that you will establish stand-
ards which, by recognizing the inherent clif-
f erence between long haul and short haul
transportation, will give all carriers identical
rates for identical services.
C. E. WOOLMAN
President
and General Manager
Delta Air Lines
DELTA AIR LINES INC.
General Offices: Municipal Airport
ATLANTA, Georgia
,
etas
Years Ended June 30 . .
1948 1949 1950
Revenues .. .. . . .. ....... . $12,818,969 $15,227,845 $17,185,295
Expenses ... . . .. . ... . . . .. 12,618,944 14,281,956 15,775,141
Operating Profit .. ....... 200,025 945,889 1,410,154
------ ------ ------
Net Profit before
Income Taxes .. .. 307,073 1,008,440 1,404,751
------ ------ ------
Federal and State
Income Taxes .. . . 102,343 369,000 589,000
Net Transfer to Surplus ... 204,730 639,440 815,751
Dividend per share ....... . ___ 2_~-
___ _.:~-

OilSIS en lfil
extends. oPer a dozen .rears
1951
$22,220,999
18,889,201
3,331,798
------
3,256,798
------
1,625,000
1,631,798
___ 72__ _
DELTA AIR LINES, INC., one of the 17
certificated trunk-line carriers, serves
30 Southern cities in addition to Chicago and
Cincinnati, and is seeking authority to serve the
New York area as well.
Delta's climb through the years has been almost
as steady as a four-engine DC-6, due to two major
factors:
1. The upsurge of industry in the South, utiliz-
ing natural resources, plentiful power, and eager
labor.
2. The Delta policy of providing the
transport with a high degree of safety and in a
manner which has made friends of passengers.
Delta has achieved a low operating cost, closely
comparable to the transcontinental lines. Mail
revenues have dropped in recent years from over
15 per cent of total revenue to less than 4 per cent
in the last quarter of the current fiscal year. Federal
income taxes for the fiscal year exceed mail pay.
DOLLARS IN
MILLIONS
1951 TOTAL SALES
$22,220,999
,,,,.,,,.~--_,,,,,-,,.,,.~""""'~'" .. , ~ \ ..
~ . ,,,#""
most modern, reliable, and
comfortable air
In the region served by Delta, a new foundation
for the nation's industry is taking shape. The com-
pany is geared up to meet the challenge of even
greater growth ahead as the region and the nation
make ever-increasing use of air transportation for
business and defense.
22
21
20
19
18
17
16
15
14
13
12
11
10
9
,,,,,,,, .. "~
.__._,,,,,.-
1939 1940 1941 1942
-----~---,----_J__
1951 STOCKHOLDERS EQUITY
1943
For a copy of Delta's annual report
for the fiscal year ended June 30th
just off the press, write Leon B. Judd,
Comptroller, Delta Air Lines, Municipal
Airport, Atlanta, Ga.
1944 1945 1946 1947
Reprinted from advertisement appearing in all issues of Wall Street ] ournal of October 8, 1951
$8,658 0
General Offices, Atlanta, Ga.
1948 1949 1950
8
7
6
5
4
3
2
1
1951