Delta Air Lines annual report 1952

1952
Annual
Comparative Summary of Operations
(YEARS ENDED JUNE 30TH)
1952 1951 % Change
Operating Revenues
Passenger $23,995,938 $19,006,936 +26.25
Mail 1,035,599 1,306,752 -20.75
Express 431,240 374,480 + 15.16
Freight 827,927 720,719 + 14.88
All Other 727,417 812,112 -10.43
Total
Operating Expenses
Other Income (Expense)
Profit Before Taxes on Income.
Taxes on Income
Net Profit
27,018,121
22,641,069
12,398
22,220,999
18,889,201
(75,000)
4,389,450
2,739,000
3,256,798
1,625,000
$ 1,650,450 $ 1,631,798
+21.59
+ 19.86
+ 34.78
+ 68.55
1.14
Revenue Plane Miles 17,530,531 15,697,753 + 11.68
Available Seat Miles 653,120,956 541,037,924 +20.72
Revenue Passenger Miles 427,533,651 345,245,543 + 23.83
Passenger Load Factor 65.46% 63.81% + 2.59
Available Ton Miles 80,089,360 71,986,666 + 11.26
Revenue Ton Miles:
Passenger 40,730,473 33,614,972 +21.17
Mail 1,881,460 1,508,963 +24.69
Express 1,167,397 1,256,453 -
7.09
^
Freight 3,836,594 3,687,228 + 4.05
Excess Baggage 477,394 412,074 + 15.85
Total 48,093,318 40,479,690 +18.81
The fiscal year ended June 30, 1952 was
one of the most significant in your Company's
history, marked not only by record profits, reve
nues, and traffic volume but also by merger
negotiations of far-reaching effect.
In April, 1952 an agreement was signed
by the Boards of Directors of Delta and Chicago
and Southern Air Lines, Inc. calling for the
merger of these two companies. Consummation
of this agreement, which requires governmental
sanction as well as approval of the stockholders
of both companies, will create an air transporta
tion system sixth in size among the domestic
airlines, a system able to play a stronger role in
the Nation's air transportation than could either
of the two companies alone.
Effective October 1, 1951, your Company
accepted a compensatory rate for the transpor
tation of mail, a rate which contains no element
of subsidy under standards established by the
Civil Aeronautics Board.
An order was placed for a fleet of DC-7
aircraft, the fastest and most advanced-type
commercial airc^jp: now offered by American
manufacturers, jfor delivery in early 1954.
I Results
PROFITS--The ne
the fiscal year, eqi
stock
previous year. These
ofit of $1,650,450 for
fent to $3.30 per share
^exceeded any
PPR'nii
recoi rnmgs were
achieved by'a $4,7971)00 (21.6%) increase in
operating revenues and a gain of $87,000 in non
operating items, more than adequate to offset the
$3,752,000 (19.9%) increase in expenses and
$1,114,000 (68.6%) increase in taxes on income
(including $407,000 of excess profits taxes).
REVENUES--Passenger revenues increased
$4,989,000 (26.3%) and represented 88.8% of total
revenues. A substantial portion of the additional
passenger revenue was obtained by higher uti
lization of flight equipment and the resulting
increase in available seat miles to 653 million
from 541 million for the preceding year.
Ton miles of mail carried increased 24.7%
over the preceding year, but mail revenue de
creased $270,000 and constituted only 3.8% of
total revenue, reflecting the compensatory, sub
sidy-free rate of 53c per ton mile which became
effective October 1, 1951. Delta is pleased that
improvements in non-mail revenues permit the
savings to the Government (and the taxpayers)
inherent in a compensatory mail rate.
Revenues from cargo (air freight and ex
press) increased $164,000 over the preceding
year, and the total revenue of $1,259,000 from
this source amply justifies our developmental
and continuing efforts in this field.
EXPENSES--The continuing upward spiral in
price levels during the year is reflected in an
increase in available (capacity) ton mile costs
above the preceding year, from 26.2c to 28.2c,
despite the exercise of economies wherever
possible. However, the utilization of a higher
1
percentage of available capacity, evidenced by
an increase in overall weight load factor from
56.2% to 60.0%, permitted a stabilization of reve
nue ton mile costs, which were 46.7c for the
preceding fiscal year and 47.1c for the current
fiscal year.
As in other recent years, the major expense
increase occurred in employee wage and salary
costs, which rose $2,445,000 over the preceding
year. Although some of this increase is attribut
able to the additional employees (360) required
by the added volume of operations, the major
portion resulted from increases in wage and
salary scales necessary to keep our employees
abreast of upward changes in the cost of living
and comparable scales for other airlines and
other industries.
TAXES--Federal excess profits taxes of $407,000
raised the aggregate taxes on income to $2,739,000
equivalent to $5.48 for each share of common
stock and 62.4% of pre-tax profits.
YEAR-END FINANCIAL CONDITION-At
the close of the fiscal year your Company's
financial condition was healthy, with net work
ing capital of $2,412,000 (current assets--
$9,027,000; current liabilities--$6,615,000), cash
items totaling $4,769,000, and outstanding bank
loans of only $1,000,000.
Dividends and Stockholder Equity
Stockholders also shared in the record profits
through record cash dividends totaling $500,000
payable in four 25c-per-share dividends declared
in July and October, 1951 and in January and
April, 1952. Another dividend of 25c a share has
been declared on July 8, 1952 payable on Sep
tember 2, 1952.
The net book value of each of the 500,000
shares of common stock outstanding at the close
of the fiscal year was $19.61--the highest in the
Company's history, $2.29 above the beginning
of the year, and reflecting an increase of 69% in
five years solely from retained earnings.
Sales and Traffic
HEALTHY GROWTH-Your Company con
tinued the aggressive sales and promotional
efforts which have contributed significantly to
the 137% increase in gross revenues during the five
years since 1947. Total passengers carried during
the year neared a total of one million.
SALES INCENTIVES-While principal efforts
were directed toward attracting repeat, regular
SOURCES OF $30,000,000
20,000,000
10,000,000
MAINTENANCE AND
REPAIR MATERIALS
6.79%
TAXES ON INCOME
10.13%
DIVIDENDS TO STOCKHOLDERS
185%
SALARIES AND
GASOLINE AND OIL
12.68%
OTHER
OPERATING EXPENSES
17.10% DEPRECIATION
5.50%
EARNINGS RETAINED
AND REINVESTED IN COMPANY
4.26%
travelers, Delta also maintained its programs
designed to attract other groups and new, first-
riders through various fare discounts. These in
cluded the Family Plan offering half-fares for
extra members of the family traveling on Mon
day, Tuesday or Wednesday; summer excursion
fares between certain points; a 10% discount for
official military travel; a 5% roundtrip discount;
and aircoach flights at reduced fares over heavily
traveled routes.
PACKAGE VACATIONS--Taking advantage of
summer rates at luxurious winter resort hotels,
Delta continued its pioneer efforts in developing
off-season vacation travel to Miami and Carib
bean countries by offering all-expense package
summer vacations via aircoach. Sales of such
low-cost vacations increased 70% over 1951.
ADVERTISING --
Advertising expenditures of
$938,000 were the largest in Delta's history,
although the 3/2% of total revenue devoted thereto
was a somewhat lesser percentage than in some
preceding years. Full use was made of color in
folders, newspapers, and national magazines;
newer media like television were used effectively.
SCHEDULING --
The luxury express service
provided by DC-6 equipment constituted more
than 50% of the total volume, with DC-3 and
DC-4 aircraft providing invaluable local and
semi-express service between the smaller cities
and the metropolitan centers of trade and in
dustry, both through direct flights and via con
venient connections with DC-6 flights.
INTERCHANGE --
Equipment interchange
agreements with American Airlines, National
Airlines, and Trans World Airlines permitted
through-plane service from Florida and the
Southeast to California and from the Southeast
to Detroit. Delta is proud of its record in pioneer
ing post-war interchanges, which eliminate con
nections and receive splendid patronage from
the traveling public.
Operations
Dependability and safety continue to be the
guiding principles of operations, fundamentals
with which there can be no compromise.
DEPENDABILITY--For the entire year 98.98%
of scheduled mileage was completed, slightly
above the 98.91% completed the preceding year,
REVENUE PASSENGER MILES 1949-50-51-52
$0.80 OPERATING REVENUE & EXPENSES
PER REVENUE TON MILE
'41 '42 '43 '44 '45 '46 '47 '48 '49 '50 '51 '52
and establishing the best record in our history.
A vigorous campaign is being waged to increase
the number of "on time" flight arrivals.
SAFETY--As of June 30, 1952 your Company
had flown 1,276,000,000 revenue passenger miles
without an accident and without serious injury
to passengers or crew members.
Equipment
At the end of the year our aircraft fleet consisted
of seven 56-passenger DC-6's, six 51-passenger
DC-4's, seventeen 25-passenger DC-3's, and
three C-47 all-cargo ships. One DC-4 was en
gaged in Pacific-Airlift service for the U. S. Gov
ernment for the majority of the year.
CONVAIR 340's--Last year's Annual Report told
about the order that had been placed with Con
solidated Vultee Aircraft Corporation for ten
Convair Model 340 aircraft. We have since been
advised of a 30-day delay in the original sched
ule which called for delivery of the first aircraft
in October, 1952 and one a month thereafter.
DOUGLAS HC-7--In April, 1952 an order was
placed with Douglas Aircraft Corporation for
four Model DC-7 aircraft, the latest-design air
plane offered by American manufacturers, with
a cruising speed of 362 miles an hour. These 69-
passenger planes will enable us to maintain our
all-importajit competitive position.
D^^RCRAFT--Deliveries of
the ten Convair 340 aircraft oh order will permit
the disposition of our DC-4 aircraft. Subsequent
to the closl of the fiscal year, one DC-4 aircraft
was sold for an arnount substantially in excess
of its depreciated book value, and negotiations
are in process for the sale of the other five.
The DC-3 modernization program begun last
year, which increased passenger capacity from
21 to 25 and included numerous improvements
for added passenger convenience and comfort,
was well received by the traveling public and
improved the financial results of DC-3 opera
tions. The remainder of the 17-ship fleet were
accordingly modified during the year.
Merger Agreements
DELTA-C&S AIR LINES-One of the most
important and constructive steps in the airline
industry since passage of the Civil Aeronautics
Act in 1938 was taken on April 24, 1952 when
an agreement was executed providing for the
consolidation of Delta and Chicago and South
ern Air Lines, Inc. (C&S), after several months
of extensive negotiations between representa
tives of the two organizations. The initial agree
ment was followed by the final, definitive agree
ment executed by all members of the Boards of
Directors of both companies on July 8, 1952. The
major provisions of this merger agreement are-
fa) C&S stockholders will receive $10,000,000
of Delta's 5/2% convertible, subordinated
debentures maturing 20 years from date
of issue, subject to increase or decrease in
an amount equivalent to the net change
in the book value of C&S between March
31, 1952 and the last day of the month in
which governmental approval of the
merger is received.
(b) The debentures are convertible at any time
before maturity into Delta common stock
at the rate of one share of stock for $35
face value of debentures, with provisions
protecting the C&S stockholders against
dilution of the conversion privilege.
(c) The debentures are callable at premiums
of 3%, 2%, and 1% during the first two years
after issuance, the third year, and the
fourth year respectively, except that not
more than 30% of the aggregate amount
can be called during the first two years.
(d) Three of the five C&S directors are to have
places on the Board of the merged company.
Carleton Putnam, Chairman of the Board
of C&S, will occupy a similar position with
the merged company; C. E. Woolman,
President and General Manager of Delta,
will retain that position; and S. A. Stewart,
MILLIONS
President of C&S, will become Executive
Vice President. Other personnel of the two
carriers will be similarly integrated.
(e) The merged company will operate as
Delta-C&S Air Lines.
This merger requires approval of the Civil Aero
nautics Board and of the President of the United
States, in addition to stockholder approval.
Toward that end, in August, 1952 there was a
hearing before a CAB Examiner, in which the
many advantages that will accrue from the com
bination were presented in comprehensive detail.
Benefits to the Government--Need for finan
cial support from the Government would be
reduced or completely eliminated through the
creation of a business entity sufficiently large to
be more proficient economically.
Benefits to the Public--Additional through-
plane service would be provided between new
terminal-to-terminal routings made possible by
the consolidation and the merged company
would be able to offer a greater volume of serv
ice over existing routes. This combination of
route mileages will justify the acquisition and
support the operation of advanced-type trans
ports (jet or turbo-prop) at an earlier date and
to a greater extent than could either of the two
individual systems.
Benefits to the Delta Stockholders --
The Delta-
C&S combination would result in increased sta
bility, greater earning power and financial self-
sufficiency, permitting larger profits assignable
to the stockholder equity.
Benefits to the C&S Stockholders --C&S stock
holders would have the opportunity to convert
their common stockholder interest in C&S to ob
ligations of Delta senior to the Delta stockholder
equity and having a value substantially in excess
of both book value and market value of their C&S
holdings. These debentures provide a guaranteed
income from the 5/2% interest rate, which is
greater than the dividends previously paid on
C&S common stock. Debenture holders would
have the right at any time to change their creditor
position into an equity interest in an enlarged and
strengthened enterprise, at their option and sub
ject only to the right of call.for redemption.
Benefits to Employees of Both Companies --
The combination would result in a stronger
company better able to withstand economic
storms and competition, thus providing greater
job security and expanded opportunities for ad
vancement. The consolidation would permit new
services, reduce seasonal fluctuations and gen
erally stabilize employment. Extensive provisions
are proposed for the protection of those few em
ployees who may be adversely affected.
The joint Delta-C&S exhibits filed at the
hearing contained a most detailed analysis of
the operations of the two companies. These
studies showed estimated savings of $953,000 a
year directly attributable to the merger. Also
included was a projection of merged operations,
reflecting the additional services reasonably an
ticipated for the combined system. A brief sum
mary of these latter exhibit figures follows:
Estimated Results of Merger
Delta and C&S Estimate
Actual Year Ended For Merged
March 31, 1952 Operation Increase
Operating Revenues
Operating Expenses
Operating Profit
Non-Operating Income
(or Expense)
Taxes on Income
Net Profit after Taxes
$43,458,000
36,835,000
6,622,000
17,000
3,843,000
2,796,000
$50,319,000
40,673,000
9,646,000
(533,000)
4,812,000
4,301,000
$6,861,000
3,838,000
3,024,000
550,000*
969,000
1,505,000
debentures)
(^Decrease --interest payments on
All indications point to expeditious handling
of this merger proposal by the CAB, and gov
ernmental approval may be forthcoming in late
1952. After this, the merger will be submitted
to stockholders of both companies. An affirma
tive vote by holders of two-thirds of the out
standing stock is required for approval.
DELTA-NORTHEAST AIRLINES-Initial pro
cedural steps were begun in September, 1951
for CAB approval of this merger agreement,
which was executed in October, 1950. Involved
in these proceedings was an order issued by the
Civil Aeronautics Board for an investigation of
the desirability, among other things, of the trans
fer of Routes 51 and 55 of Capital Airlines (from
New York and Washington to the southern ter
minals of Atlanta, New Orleans, and Memphis)
to the Delta-Northeast combination. In connec
tion with a proposal for the merger of Capital and
Northwest Airlines (which failed to materialize),
in the early part of 1952 Delta offered to pur
chase from Capital its Routes 51 and 55, which
would have provided the necessary connecting
link between the Delta and Northeast systems,
but this offer was not accepted. There are no
definite dates for further action in this matter,
but the CAB is making every effort to expedite
the processing of all pending cases.
eluding $7,000,000 for the ten Convair 340 air
craft on order by C&S to be delivered in 1953
and 1954. Shortly after the close of the fiscal
year, two transactions were concluded which
will provide ample funds for new equipment and
for such other expansion as may occur in the
foreseeable future.
EQUITY FINANCING--In August, 1952, Delta
sold 100,000 shares of common stock to the public
at a price of $25 a share, netting the company ap
proximately $2,255,000 after expenses of the sale.
BANK CREDIT--A credit agreement was ne
gotiated whereby a group of 25 banks estab
lished a $20,000,000 credit for borrowings over
a two-year period on unsecured notes at a 3/2%
per annum interest rate. Of the total, $5,000,000
is contingent upon consummation of the C&S
merger, and is provided by banks on the C&S
system. The projections of future financial con
ditions submitted to the banks during negotia
tions for the credit were identical with the exhib
its filed with the CAB in the course of the Delta-
C&S merger hearing, and the credit agreement
therefore reflects general endorsement of the pro
posed financial structure of the Delta-C&S com
bination by members of the banking industry.
Personnel
SEAT MILES
PER EMPLOYEE
300,000
30,000
EMPLOYEE PRODUCTIVITY
YEARS ENDED JUNE 30
AVAILABLE TON MILES
PER EMPLOYEE
REVENUE TON MILES
PER EMPLOYEE
100,000
The total number of personnel increased 360
during the year, from 2,362 to 2,722. However,
an overall increase in volume of operations re
sulted in employee productivity factors rela
tively unchanged from the preceding year.
SEAT MILES
Financing Programs
Acquisition of new flight equipment and ground
facilities during the next two years will require
expenditures of approximately $21,000,000, in-
TON MILES
NUMBER OF EMPLOYEES AND LENGTH OF SERVICE
On October 1, 1951 a general upward ad
justment in wage and salary scales was placed
into effect. Concurrently therewith, provision
was made for further upward adjustments auto
matically at six-month intervals as the cost of
living index moves upward. At the first review
point, April 1, 1952, the index had increased
sufficiently to require an increase in base rates.
Such other employee benefits as group insur
ance, retirement program and the credit union,
were continued in effect, and more liberal al
lowances were established for vacations and free
air travel. These benefits have much to do with
our being able to attract the high type of em
ployee necessary to perform one of the most out
standingly efficient operations in the industry.
Your Company prides itself on the loyalty
and ability of its employees, and intends to do
its utmost to merit their continued confidence
and support.
*BCTneairlines have now firmly established them
selves as one of the major industries of the na
tion. Revenues of the certificated U. S. carriers
are now well above a billion dollars a year, and
for the first time air passenger miles are exceed
ing rail-pullman passengers. The Korean outbreak
demonstrated once again the vital role that the
airlines assume in the national defense picture.
Through technological developments and effi
cient management, the cost of air transportation
to the public is below that of three years ago
and is only slightly above the levels of ten years
ago; yet the quality of service has improved
tremendously.
Developments of recent years clearly indi
cate the need for combinations of the smaller
carriers into larger operational units, as com
panies which were large enough for efficient
operations in the days of the 170-mile-an-hour
DC-3 encounter difficult problems with the 300-
mile-an-hour aircraft of today and will be seri
ously handicapped in the jet transport era fast
approaching. These factors no doubt influenced
the airline merger recently consummated and
the four other merger agreements that have been
negotiated in the past few months. The Civil
Aeronautics Board has adopted a firm policy
favoring voluntary airline mergers which are in
the public interest, founded on sound principles
and creating neither monopolies nor destructive
competition. The proposal for the merger of
Delta and C&S is consistent with this policy.
The Civil Aeronautics Authority recently es
timated that air travel totals of 1950 would more
than double by 1960, and Delta has taken steps
designed to assure its full participation in the
developments of the coming years.
This map shows the present routes of Delta, the
interchange services being performed, the pro
posed mergers and new route applications now
pending, and illustrates clearly how well the sys
tems of Delta and C&S integrate.
DELTA'S PRESENT ROUTES
PRESENT INTERCHANGES
DELTA'S PROPOSED ROUTES
CHICAGO AND SOUTHERN ROUTES
COMMON TERMINALS
DELTA-C & S
LEGEND
NORTHEAST AIRLINES SYSTEM
(Merger Pending)
Shown at upper right
" vo^
CHICAGO AND
INTERNATIONAL
Delta Air
ATLANTA,
BALANCE SHEETS --
JUNE
CURRENT ASSETS: 1952 1951
Clash $ 2,174,840 $ 3,751,570
Marketable securities, at cost
(quoted market value at June 30, 1952--$2,590,412):
U. S. Government securites 2,394,162 300,000
Federal Land Bank Bonds, 2%% due May 1, 1956 200,000 --
Receivables--
U. S. Post Office Department, for carrying mail.. 151,955 90,068
Traffic (net) 1,320,240 1,217,014
Other 329,385 315,118
Maintenance and operating supplies, at average cost.. 2,307,335 1,373,528
Other current and accrued assets 149,573 137,234
Total current assets $ 9,027,490 $ 7,184,532
INVESTMENTS AND SPECIAL FUNDS:
Deposits on purchase of new aircraft (Note 2) $ 763,909 $
Net assets of dusting division 124,631 93,901
Other investments 20,914 17,584
$ 909,454 $ 111,485
OPERATING PROPERTY AND EQUIPMENT
(Including $4,686,416 and $4,455,390 fully
depreciated in 1952 and 1951, respectively):
Other
Flight Property and
Equipment
Cost--
Equipment
1952 $11,281,161 $ 3,454,061 $14,735,222
1951 10,530,540 2,975,037 $13,505,577
Reserve for depreciation--
1952 6,729,546 1,298,250 8,027,796
1951 5,523,701 1,075,167 6,598,868
$ 6,707,426 $ 6,906,709
DEFERRED CHARGES:
Advances for leased facilities, being amortized $ 119,908 $ 151,339
Other deferred charges 72,627 47,985
$ 192,535 $ 199,324
$16,836,905 $14,402,050
(The accompanying notes on page 13 are
Lines, Inc.
GEORGIA
30, 1952 AND 1951
CURRENT LIABILITIES: 1952
Current maturities of long-term debt $ 700,000
Accounts payable and accrued liabilities 1,892,702
Accrued Federal and state income taxes 3,342,448
Unearned transportation revenue 469,091
Dividends payable July 17, 1951 --
Air travel plan deposits 210,375
Total current liabilities $ 6,614,616
LONG-TERM DEBT:
Notes payable to banks, 2%%, due serially to
November 1953 (less current maturities
included above in current liabilities) $ 300,000
PURCHASE COMMITMENTS (Note 2)
RESERVES, ETC.:
Reserve for aircraft overhaul $ 109,785
Deferred credits 4,011
$ 113,796
CAPITAL STOCK AND SURPLUS (Note 2):
Common Stock, $3.00 par value--
Authorized 1,000,000 shares
Issued and outstanding 500,000 shares $ 1,500,000
Capital surplus (principally net premium
on sale of common stock) --
No change during year 3,717,329
Earned surplus (of which $500,000 under
the terms of the bank loan agreement
is not available for the payment of
dividends) 4,591,164
$ 9,808,493
$16,836,905
1951
$ 700,000
1,560,787
1,649,429
338,191
125,000
167,875
LIABILITIES
$ 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
an integral part of these balance sheets.) 11
STATEMENTS
OF
INCOME
For the Years Ended
June 30, 1952 and 1951
STATEMENTS
OF
EARNED
SURPLUS
For the Years Ended
June 30, 1952 and 1951
OPERATING REVENUES:
1952 1951
Passenger $23,995,938 $19,006,936
Mail 1,035,599 1,306,752
Freight 827,927 720,719
Express 431,240 374,480
Charter 77,175 456,014
Excess baggage 307,305 251,246
Other revenue, net 342,937 104,852
Total operating revenues $27,018,121 $22,220,999
OPERATING EXPENSES:
Flying operations $ 6,845,962 $ 5,678,814
Direct maintenance--flight equipment 3,028,043 2,495,048
Depreciation--flight equipment 1,255,876 1,170,421
Total direct aircraft operating expenses.... $11,129,881 $ 9,344,283
Ground operations 3,057,451 2,630,837
Ground and indirect maintenance 1,702,309 1,250,629
Passenger service 1,579,050 1,336,457
Traffic and sales 2,540,527 1,938,720
Advertising and publicity 938,574 932,536
General and administrative 1,463,597 1,236,439
Depreciation--ground equipment 229,680 219,300
Total operating expenses $22,641,069 $18,889,201
Net income from operations, before
income taxes $ 4,377,052 $ 3,331,798
OTHER INCOME (EXPENSE):
Interest expense (including $65,168 in 1951
for interest in connection with Federal
tax case involving prior years) ($ 34,565) ($ 115,556)
Interest income 31,236 9,601
Net profit of dusting division 2,217 25,624
Other income--net 13,510 5,331
Total other income (expense) $ 12,398 ($ 75,000)
Net income, before income taxes $ 4,389,450 $ 3,256,798
PROVISION FOR TAXES ON INCOME:
Federal income tax $ 2,230,000 $ 1,534,000
Federal excess profits tax 407,000 --
State income taxes 102,000 91,000
Total provision for taxes on income $ 2,739,000 $ 1,625,000
Net income $ 1,650,450 $ 1,631,798
Balance, beginning of period.
Net income for year
Dividends (cash) on common stock ($1.00
in 1952 and $.75 in 1951 per share)
Balance, end of period (restricted as
indicated on balance sheet)
$ 3,440,714
1,650,450
$ 5,091,164
500,000
$ 2,183,916
1,631,798
$ 3,815,714
375,000
$ 4,591,164 $ 3,440,714
PROPOSED MERGERS:
Delta Air Lines, Inc. has entered into agree
ments looking toward mergers with North
east Airlines, Inc. and with Chicago and
Southern Air Lines, Inc. In general, these
agreements (which require approval of the
Civil Aeronautics Board, other govern
mental bodies having jurisdiction, and the
stockholders of the respective companies)
provide (a) for the exchange of Delta
common stock for the outstanding common
stock of Northeast based on the respective
net book values per share on the last day of
the month in which appropriate govern
ment approval is obtained and (b) for the
proposed offering by Delta of 5M% Convert
ible Debentures in the principal amount of
$10,000,000 (adjusted by an amount equal
to the increase or decrease in the net book
value of Chicago and Southern from
March 31, 1952, to the effective date of the
merger) in exchange for all the stock of
Chicago and Southern; each $35 of such
debentures are to be convertible into one
share of common stock of Delta.
NOTES
TO
FINANCIAL
STATEMENTS
JUNE 30, 1952
PURCHASE COMMITMENTS AND FINANCING:
The Company has commitments for the
purchase of ten Model 340 Convair-Liner
aircraft (scheduled delivery is one a month
beginning in October 1952) and four DC-7
aircraft (scheduled delivery is one a month
beginning in February 1954), including
spare parts, aggregating approximately
$13,000,000 at June 30, 1952. In connection
with the acquisition of these aircraft, the
Company has made deposits totalling
$763,909 at June 30, 1952.
In order to raise funds for the purchase of
these aircraft and for expansion purposes,
the Company, subsequent to June 30,1952,
sold 100,000 shares of $3 par value for
$2,275,000 (after underwriting fees but
before deduction of expenses estimated at
$20,000) and entered into a loan agree
ment with a group of banks extending a
$20,000,000 credit to the Company on un
secured notes at 3/2% interest over a two-
year period.
AUDITOR'S
CERTIFICATE
Arthur Andersen & Co.
Accountants and Auditors
The William- Oliver Building
Atlanta 3
To the Board of Directors,
Delta Air Lines, Inc.:
We have examined the balance sheet of Delta Air Lines, Inc.
(a Louisiana corporation) as of June 30, 1952, and the related statements
of income and surplus for the year then ended. Our examination was made
in accordance with generally accepted auditing standards, and accordingly
included such tests of the accounting records and such other auditing
procedures as we considered necessary in the circumstances.
In our opinion, the accompanying balance sheet and statements
of income and surplus present fairly the financial position of Delta
Air Lines, Inc. as of June 30, 1952, and the results of its operations
for the year then ended, and were prepared in conformity with generally
accepted accounting principles applied on a basis consistent with that
of the preceding year.
Atlanta, Georgia,
August 15, 1952.
A Decade of Growth
CURRENT
Current .Liabilities.
Net Working Capital.
Total Assets.
Stockholders' Equity.
Stockholder Equity Per Share.
Shares of Common Stock Outstam
at close of year.
1943 1944 1945 1946
$ 1,461,049 $ 1,668,698 $ 4,573,035 $ 2,765,210
793,652 667,481 1,451,981 00
05
667,397 1,001,217 3,121,054 1,126,262
2,150,879 2,324,048 5,537,587 6,034,364
1,357,226 1,656,566 4,085,606 4,220,770
6.84 8.35 10.21 10.55
198,384 198,384 400,000 400,000
OPERATING REVENUES:
Passenger $ 1,749,815
Mail 574,228
Express 51,278
Freight --
All 46,199
Total Revenues 2,421,520
Operating Expenses 1,775,801
Operating Profit, Before Income Taxes 645,719
Non-Operating Revenue or (Expense) 61,405
Net Income Before Taxes 707,124
Federal and State Taxes on Income 303,441
Net Profit 403,683
Profit Per Share of Stock Outstanding
at close of year 2.03
REVENUE PLANE MILES (OOO) 2,000
Available Seat Miles (000) 41,941
Revenue Passenger Miles (000) 35,613
Passenger Load Factor 84.91%
Available Ton Miles (000) 4,801
Revenue Ton Miles (000) 3,993
% of Scheduled Mileage Completed 95.73%
$ 2,577,139 $ 4,193,214 $ 6,944,162
517,371 752,719 680,359
65,507 97,286 137,540
73,308 113,063 97,955
3,233,325 5,156,282 7,860,016
2,395,536 3,650,087 7,304,153
837,789 1,506,195 555,863
28,297 (57,279) (12,793)
866,086 1,448,916 543,070
314,853 910,221 232,835
551,233 538,695 310,235
2.78 1.34 .78
2,772 4,676 8,195
57,367 96,927 186,650
51,844 84,877 150,072
90.97% 87.57% 80.04%
6,652 11,221 21,981
6,070 9,741 15,860
94.12% 95.55% 96.63%
$10,558,559 $10,079,272 $11,987,246 $13,761,453 $19,006,936 $23,995,938
423,292 2,010,668 2,434,888 2,373,213 1,306,752 1,035,599
242,978 273,099 244,859 238,441 374,480 431,240
109,603 303,115 358,503 478,537 720,719 827,927
154,404 152,815 202,349 333,651 812,112 727,417
11,488,836 12,818,969 15,227,845 17,185,295 22,220,999 27,018,121
11,782,368 12,618,944 14,281,956 15,775,141 18,889,201 22,641,069
(293,532) 200,025 945,889 1,410,154 3,331,798 4,377,052
(67,302) 107,048 62,551 (5,403) (75,000) 12,398
(360,834) 307,073 1,008,440 1,404,751 3,256,798 4,389,450
127,459 102,343 369,000 589,000 1,625,000 2,739,000
(233,375) 204,730 639,440 815,751 1,631,798 1,650,450
(.47) .41 1.28 1.63 3.26 3.30
11,822 12,803 12,921 13,804 15,698 17,531
335,630 349,235 361,199 437,209 541,038 653,121
222,704 188,293 201,711 238,335 345,246 427,534
66.35% 53.92% 55.84% 54.51% 63.81% 65.46%
42,716 46,562 49,544 59,532 71,987 80,089
22,799 19,966 22,805 27,259 40,480 48,093
94.71% 94.22% 97.69% 97.90% 98.91% 98.98%
15
* Credit
( ) Loss
New Flight Equipment
CONVAIRS
Starting in late 1952 Delta takes delivery on a fleet
of ten Convair 340's at rate of one per month. An
improved version of the Convair 240, the new ships
cruise at 280 miles per hour, carry 44 passengers
in pressurized comfort. They will replace present
DC-4's and also operate over some heavier-trav
elled routes now receiving DC-3 service.
Delta's Convairs will have 44 seats, all
two abreast. Passengers enter through
a forward, built-in ramp.
This typical Convair 340 cockpit fea
tures simplicity and roominess, yet
reflects the latest developments.
DC-7's
In early 1954, Delta will receive 4 Douglas DC-7's,
which fly 69 passengers at 362 miles per hour. ADDED SEATS OVER DC-6
Below is the Delta cockpit and cabin layout. SHOWN IN BLUE.
2nd OFFICER'S SEAT
1st OFFICER
\ COATS
FORWARD
COMPARTMENT
STEWARDESS'
SEAT
CAPTAIN
CREW
RADIO RACK BAGGAGE MEN 'STEWARDESS' SEAT
Richard W. Courts
R. W. Freeman
Edward H. Gerry
L. B. Judd*
C. H. McHenry
*Deceased December 26,1951
Winship Nunnally
Travis Oliver
Laigh C. Parker
Richard J. Reynolds
D. Y. Smith
DIRECTORS
C. E. Woolman
C. E. Woolman
President and General Manager
Laigh C. Parker
Vice President of Traffic and Sales
C. H. McHenry
Secretarij
Charles H. Dolson
Vice President
of Operations
Todd G. Cole
Comptroller and
Assistant Secretary
Travis Oliver
Treasurer
Catherine FitzGerald
Assistant Treasurer
OFFICERS
General Offices:
Delta Air Lines Building
Municipal Airport,
Atlanta, Georgia
Transfer Agent:
Citizens & Southern
National Bank
Atlanta, Georgia
Registrar:
Trust Company of Georgia
Atlanta, Georgia
DELTA AIR LINES
ATLANTA, GA.
Dear Stockholder:
The recent hearings on the proposed Delta-C & S Airlines merger
before the Civil Aeronautics Board Examiner in Washington was excep
tionally well covered by the press all over the nation.
As a stockholder and partner, I thought you would be interested in
seeing these typical newspaper reports which reflect the testimony of
various witnesses on the advantages of the merger.
Sincerely
C. E. Woolman
Press Reports Reflect Advantages of Delta - C * S Merger
Delta-C. S. Merger Seen As
7A Distinct Step Forward7
Bigger Air Lines Seen
Needed To Handle Jets
By MARION BURSON
(AP Special Washington Service)
WASHINGTON, Aug 19 (41--C. E.
Woolman, president and general
manager of Delta Airlines, said to
day a merger with Chicago and
Southern Airlines would be "a dis
tinct step forward in the public
interest and sound in every way."
Testifying at a Civil Aeronautics
Board hearing on the merger plan,
Woolman said the CAB has urged
consolidation of smaller airlines to
make them stronger financially
and less dependent on government
subsidy.
``The combination of C.'and S.
and Delta accomplishes this goal,"
he said, "and creates a combined
airlines system which gives the
solid promise of being able to stand
independent financially through
good times and bad."
He told CAB Examiner William
Cusick Delta now is ``temporarily
free from subsidy" and hopes to
stay that way,
"May not continue"
"However," he went on, "We
must recognize that the high traffic
volumes and good business of re
cent months may not continue.
"If the economic curve drops
and traffic, dips, our. two airlines
may again experience hard times
and be dependent upon govern
ment support especially if thpy
are separate and unable to realize
the economics which a combination
would permit."
Other witnesses had testified that
the merger would save the govern
ment $91-3,000 a year because it
would eliminate domestic mail sub
sidies now paid Chicago and South
ern. Delta has been carrying mail
at a non-subsidy rate of cents a
ton-mile. Lower mail costs over
C. and S.'s Caribbean routes also
are possible.
Woolman said consolidation
would mean improved flight serv
ices for the public and "give sub
stantial assurance of increased
earnings to the- owners of the com
pany." He added:
"The merger eliminates no sig
nificant competition and creates no
excessive new competition with
other carriers." Several competing,
or potentially competing, airlines
--Eastern, Capital, American, Pan
American, Trans World and Nation
al--have intervened in the merger
proceedings.
Cites bank credits
Woolman said Delta has lined up
20 million dollars in bank credits
for an expansion program to be
undertaken by the consolidated
firm.
He said 20 banks would make
unsecured, 3% per cent loans to
the new company.
If the merger plan wins CAB ap
proval, he added, Delta plans to
issue an additional 100,000 shares
of common stock next year. Delta
now has 500,000 shares of common
stock, and a public offering last
week of an additional 100.000
shares was oversubscribed on the
first day, he said.
More than 150 Delta employes
bought some of the new stock, he
added.
C. and S. stockholders under the
merger would receive 5Yz per cent
debentures for their stock. Thes*<
would be convertible into Delta
stock.
WASHINGTON I41 --
Commercial
jet aircraft will lead to bigger air
lines in the future, Carleton Put
nam, chairman of Chicago and
Southern Air Lines, Inc., told a
Civil Aeronautics Board examiner
today.
He said bigger airlines would be
necessary in the coming jet age
"to afford efficient scope to these
faster, longer range planes."
Putnam testified at a hearing on
a proposed merger of C&S and
Delta Air Lines. He would be
chairman of the consolidated firm
with C. S. Woolman, head of Delta,
as president.
Putnam told Examiner William
Cusick the merger would "consti
tute a sound foundation for future
expansion, if the CAB should de
cide that the public interest re
quired the building of a strong
system in the east competitive to
Eastern Airlines."
Eastern lawyers are expected to
be heard from later in the hear
ing. Trans-World, American, Capi
tal, National and Pan-American
Airlines also have intervened in
the case.
"Leaving aside future possibili
ties," Putnam said, "studies indi
cated that substantial operating
savings could be realized at once
in a Delta -
C &S consolidation,
enough to assure immediate inde
pendence of domestic subsidy."
He added that close relation
ships long have existed between
the managements of C&S and Del
ta, and that at some airports both
companies use the same hangars
and radio facilities.
Airline Official Testifies at C.A.B
Hearing on Benefits of Merger
Special to The Times Herald
Washington, Aug. 19.--Laigh C
Parker, vice-president of traffic
and sales for Delta Air Lines, de
scribed how a Delta-Chicago &
Southwestern merger would per
mit fuller utilization of aircraft
and additional one-plane service
between various cities.
Testifying Monday afternoon
before Civil Aeronautics Board
Examiner William F. Cusick, Par;
ker presented specimen schedules
of additional services which would
have been possible and practical
during the past year if the two
companies had been merged.
Among new flight combinations
outlined by Parker were the fol
lowing:
Atlanta-Houston via -Birming-;
ham, Jackson and Shreveport.
Chicago-Dallas via St. Louis,
Memphis and Shreveport.
Memphis-Dallas via Little Rock,
Pine Bluff and Shreveport.
Detroit-Dallas via Indianapolis,
Memphis and Shreveport.
He also described new air coach
services which would have been
possible between Detroit and Dal
las via Indianapolis, Memphis and
Shreveport; from Chicago to
Houston via St, Louis, Memphis
and Shreveport, and from Atlanta
to Dallas via Birmingham, Jack-
son and Shreveport.
Also presented as a typical new
service was a DC-6 flight from
Dallas to Havana via New Or
leans. Other specimen schedules
which would have been possible
included Detroit-Atlanta via An-
derson-Muncie, Ind., and Cincin
nati.
Mr. Parker said the additional
services, which would have pro
duced more than $7,000,000 in
creased income, would have re
quired four additional four-engine
aircrhft, and also would have
taken advantage of present equip
ment which now is idle during
lay-over periods, but which could
have been utilized to good advan
tage on air coach and short
flights had the two companies
been merged.
Mr. Parker pointed out that the
merger would help to smooth out
the traffic peaks presently occur
ring on C&S and Delta, permit
ting more balanced use of airlin
ers throughout the year1. Delta
presently has its traffic peak in
March, while C&S hits its top
traffic level in September, which
is a low month for Delta.
AIRLINES MERGER
TO INCREASE JOBS
To Need 411 New Em
ployes for Added Flights
By MARION BURSON
(AP Special Washington Service!
WASHINGTON, Aug. 15 --
A Del-
ta-Chicago and Southern airlines
merger and authorization of pro
posed new flight schedules would
result in more company jobs, W. T.
Beebe, C. and S. vice-president for
personnel, said Friday.
At a hearing on the merger plan
he told a civil aeronautics board
examiner that a consolidated Del
ta-C. and S. system would need an
estimated 411 new employes if the
additional flights are authorized.
He broke this figure d6wn as
follows: 40 pilots, six flight engin
eers, 143 maintenance workers, 158
agents, 30 stewardesses and 34
clerical and administrative em
ployes.
Beebe and R. H. Wharton, Del
ta personnel director, testified most
of the day on personnel policies
that would be followed if the mer
ger goes through. The hearings on
the plan will continue next week.
Even without CAB approval of
the projected new routes, the wit
ness said, no more than 20 of the
company's 4200 employes would
lose their jobs under a merger.
And, they added, any discharged
employes would get generous sev
erance pay.
Wharton, replying to a question
by a union attorney, denied that
Delta has influenced its employes
against joining unions. C. and S.
workers are represented by seven
unions but only one Delta employe
group--the pilots---has union repre
sentation.
Wharton said other unions, in the
past, have bargained for Delta
workers but not in the last five
years. Salaries and working condi
tion of the non-union employes, he
said, undergo periodic examina
tion, and proposed changes are cir
culated among the employes for
suggestions.
Beebe said most C. and S. em
ployes favor the merger. "Gener
ally," he added, "we feel that pay
scales of both companies are quite
comparable."
Air Line Merger
Would Up Profits
WASHINGTON, Aug. 13--UP)--A
Delta Air Lines official estimated
today that merger of Delta with
Chicago and Southern Air Lines
would boost the companies' profits
more than $1,500,000.
Todd G. Cole, Delta comptroller,
based his estimate on C. and S. and
Delta combined profits during a
recent 12-month period.
Testifying at a Civil Aeronautics
Board hearing on the proposed
merger, Cole said C. and S. and
Delta, operating separtely, had
profits after taxes of $2,795,886 in
the 12 months ended March 31.
If the merger had been in effect,
with the additional routes that
have been proposed, Cole esti
mated the consolidated firm's prof
its would have been $4,300,970, an
increase of $1,545,084.
Without the additional flights
merger would have brought the
two lines additonal profits of $309,-
000 during the period, he added.
New routes proposed in the
merger area.
1. Atlanta-Shreveport-Houston.
2. Chicago-Memphis-Shreveport-
Dallas.
3. Detroit-Anderson, Ind.-Atlan-
ta-Jacksonville-Miami.
Banker Says
Delta Merger
Plan Is Sound
WASHINGTON, Aug. 14--UP)--An
Investment banker said today that
the merger plan of Delta and Chi
cago and Southern Airlines is fi
nancially sound.
Richard W. Courts, senior part
ner of Courts and Co., Atlanta,
and a Delta director, testified at a
Civil Aeronautics Board heaping
on the plan.
He told CAB Examiner William
Cusick that the stock of the con
solidated firm would be more at
tractive than the issue of the sep
arate companies.
He said a 10 million dollar debt
that would result from giving C&S
stockholdes 5 Vz per cent debentures
for their stock would not be trou
blesome. The debentures, he add
ed, would be subordinated to bank
loans in the consolidated firm's
capital structure.
Yet, he went on, the debentures
would be attractive to C&S stock
holders because of the 5Yz per cent
interest rate, and their converti
bility into Delta stock.
Putnam Predicts
Airlines
Will Be Larger
WASHINGTON m --
Commercial
jet aircraft will lead to bigger air
lines in the future, Carleton Put
nam, chairman of Chicago and
Southern Air Lines, Inc., told a
Civil Aeronautics Board examiner
today.
He said bigger airlines would be
necessary in the coming jet age
"to afford efficient scope to these
faster, longer range planes."
Putnam testified at a hearing on
a proposed merger of C&S and
Delta Air Lines. He would be
chairman of the consolidated firm
with C. S. Woolman, head of Delta,
as president.
Putnam told Examiner William
Cusick the merger would "consti
tute a sound foundation for future
expansion, if the CAB should de
cide that the public interest re
quired the building of a strong
system in the east competitive to
Eastern Airlines."
Eastern lawyers are expected to
be heard from later in the hear
ing. Trans-World, American, Capi
tal, National and Pan-American
Airlines also have intervened in
the case.
"Leaving aside future possibili
ties," Putnam said, "studies indi
cated that substantial operating
savings could be realized at once
in a Delta -
C&S consolidation,
enough to assure immediate inde
pendence of domestic subsidy."
He added that close relation
ships long have existed between
the managements of C&S and Del
ta, and that at some airports both
companies use the same hangars
and radio facilities.
Putnam said other officers of
the consolidated firm would be:
S. A. Stewart, executive vice presi
dent; Richard Maurer, vice presi
dent in charge of legal affairs;
Junius Cooper, vice president for
finance; and Todd G. Cole, vice
president-controller.
Cole now is controller of Delta
and the others are connected with
Chicago and Southern.
C. & S. Executive Speaks
For Merger With Delta
WASHINGTON (41--Tom Miller,
Chicago & Southern Airlines vice
president for traffic, said today
a merger of his company with
Delta Airlines would promote air
travel to the Caribbean area and
South America.
He testified at a hearing on the
proposed merger before Civil Aero
nautics Board Examiner William
Cusick
Chicago & Southern international
routes touch Cuba, Puerto Rica,
Jamaica, Dominican Republic and
Venezuela. Delta has no foreign
routes.
Miller said Chicago & Southern
alone has done an outstanding job
in developing international traffic
in the last four years.
Latin Travel
Increase Seen
In Air Merger
^WASHINGTON (41--A Delta-Chi-
cago & Southern Air Lines merger
would boost the volume of air traf
fic through New Orleans to the
Caribbean area and South Amer
ica, a Delta official said today.
E Marion Johnson, Delta's di
rector of planning and research,
made the prediction at a Civil
Aeronautics Board hearing on the
merger plan.
Chicago & Southern operates
flights from New Orleans to Cuba,
Jamaica, Dominican Republic,
Puerto Rico and Venezuela. Delta
has no overseas routes.
Johnson told CAB Examiner Wil
liam Cusick that two-thirds of Chi
cago & Southern's Latin American
traffic comes from states served
also by Delta--Illinois, Louisiana,
Mississippi and Texas.
In this area, he said, Delta, in
event of a merger, would "provide
added sales effort" for the Latin
American flights.
CAB Examiner
Upholds Delta,
C. and S. Plea
Special to Tha Atlanta Journal
WASHINGTON, July 20-Civil
Aeronautics Board Examiner, Wil
liam F. Cusick, has thrown out
petitions of Capital and National
Air Lines which sought to con
tend that some routes of Delta
and Chicago and Southern did not
integrate.
The examiner sustained motions
filed by Delta and C. & S. attor
neys to strike the petitions of the
competing lines who were en
deavoring to prove lack of inte
gration in order that part of the
routes might be transferred to
them.
C. E. Woolman, president and
general manager of Delta, con
cluded his testimony late Tues
day after cross-examination by
union lawyers. Mr. Woolman said
he saw no unsurmountable prob
lems in integrating union and non
union groups of employees.
Hearings are being held before
the CAB on the proposed merger
of Delta and Chicago and South
ern, a move which Mr. Woolman
asserted would be "a distinct step
forward in the public interest and
sound in every way."
The merger case testimony is
expected to wind up Wednesday
with a witness testifying on em
ployee integration at the request
of public counsel, Leslie Dona
hue.
Airlines Merger
Would Cut Costs,
Official Declares
WASHINGTON, Aug. 13 (AP)--
Todd G. Cole, comptroller of Delta
Airline, testified today that a Delta
merger with Chicago and Southern
Airlines would reduce maintenance
costs substantially.
For example, he said, $1,046,000
alone would be saved in keeping
in repair new fleets of Convair
Elanes which had been ordered by
oth companies.
Delta and C&S each are buy
ing 10 of the new twin-engine Con
vair 340s, Cole said at a hearing
on the merger plan before Civil
Aeronautics Board Examiner Wil
liam Cusick.
Pratt and Whitney engines power
both the Convair and Delta's DC-6
planes and are interchangeable.
Thus, Cole said, Delta's shops in
Atlanta could serve both types of
aircraft at much less than it would
cost the two companies for sepa
rate repair facilities.
He said that C Q S shops at
Memphis would be used for main
tenance of C & S Constellations
and DC-7 planes being purchased
by Delta. Both these aircraft use
Wright engines.
Thomas S. Hambleton, C&S
treasurer, said additional econo
mies will be possible from con
solidation of operations at Chicago,
Shreveport, La., New Orleans and
Jackson, Miss. C&S and Delta
now maintain separate facilities
in these cities.
However, Hambleton added, a
merger would bring an overall in
crease of $306,000 in the cost of
ground operations, mostly because
of additional personnel that would
be required.
Earlier Cole estimated that, on
the basis of earnings of the two
companies in a recent 12-month
period, a merger would boost their
profits after taxes more than 1%
million dollars annually despite an
anticipated $913,000 reduction in
air mail pay from the government.
This estimate is based on CAB
approval of new routes proposed
in the merger plan. The plan en
visions Delta-C & S flying new
routes between Atlanta and Hous
ton via Shreveport, La.; between
Chicago and Dallas via Memphis
and Shreveport, and between De
troit and Miami via Anderson,
Ind., Atlanta and Jacksonville.
But competing air lines may
register opposition to some of the
route segments. Several of them
--Eastern, American, Capital and
Pan American--have interyened ih
the merger proceedings.
Consideration by the CAB of an
other problem was sought by 32
C&S flight engineers represented
by H. L. Robison and W. D. Kent.
They told the board in a state
ment that the third crewman on
a C & S Constellation is a flight
engineer but that on a Delta DC-6
plane the third man is a pilot.
The flight engineers want incor
porated ia the merger plan a pro
tective provision against layoffs
or salary euts during a five-year
period.
Delta Gets $20 Million from Banks
The estimated bright financial out
look for a merged Delta-Chicago and
Southern system was further enhanced
last week when 25 southern banks ex
tended a $20,000,000 credit to Delta.
Described by the banks as "the largest
single credit ever transacted by southern
banks" the credit is available for Delta
to draw on in any amounts up to the
total over a two-year period.
The money may be used for equip
ment, expansion generally, or both. It
was the second major financial deal
the week for Delta. Two days prioi^o
the loan, a new issue of 100,000 shares
of stock was over-subscribed on the first
day of offering, netting the carrier %2,-
250,000. This was originally designed
for financing of Delta's Convair ar
DC-7 orders.
But company officials indicated the
additional money will be available for
the needs of Delta and C&S in
the event the merger is consummated.
In fact, C. E. Woolman, Delta presi
dent and proposed president of the
merged company, said that an additional
100,000 shares of stock will be offered
for public sale "sometime next year"
if
Availability of extra cash wasn't tn^
^only reason officials of the merging com
panies were happy. In deciding on the
loan, the 25 southern banks had before
them the same pro forma capital struc
ture of the merged company as now
before CAB in the merger case. If a
"jury" as tough as 25 banks thinks it
to be a sound set-up, there is roon
>r optimism in the CAB case.