DELTA AIR LINES, INC. 
 BOARD OF DIRECTORS 
CARLETON PUTNAM - Chairman 
RICHARD W. COURTS 
R. 
w. FREEMAN 
EDWARD H. GERRY 
JOHN R. LONGMIRE 
C. H. McHENRY 
WINSHIP NUNNALLY 
TRAVIS OLIVER 
LAIGH C. PARKER 
RICHARD 
J. REYNOLDS 
D. Y. SMITH 
s. A. STEWART 
C. E. WOOLMAN 
OFFICERS - - - - - - - - - - - - 
LAIGH C. PARKER 
C. E. 
w OOLMAN 
President and General Manager 
s. A. STEWART 
Executive Vice President 
JUNIUS H. COOPER 
Vice President - Traffic and Sales Vice President - Finance 
CHARLES H. DOLSON 
Vice President - Operations 
R. s. MAURER 
Vice President - Legal 
w. T. ARTHUR 
Assistant Vice President - Operations 
TRAVIS OLIVER 
Treasurer 
TODD G. COLE 
Vice President - Comptroller and 
Assistant Secretary 
JAMES H. COBB 
Vice President - Public Relations 
and Advertising 
T. M. MILLER 
Assistant Vice President - Traffic 
and Sales 
C. H. McHENRY 
Secretary 
CATHERINE FITZGERALD 
Assistant Treasurer 
Transfer Agent for Common Stock 
The Citizens & Southern National Bank 
Atlanta, Georgia 
Trustee for Debentures 
Registrar for Common Stock 
Trust Company of Georgia 
Atlanta, Georgia 
The First National Bank of Atlanta 
Atlanta, Georgia 
/953 
TO THE STOCKHOLDERS 
,The fiscal year ended June 30, 1953, was the greatest in the history of Delta Air 
Lines, Inc., high-lighted by a record-breaking volume of business and by the 
smooth completion of its merger with Chicago & Southern Air Lines to form the 
fifth largest domestic airline in the United St~tes. 
Net profit after taxes totaled $4,158,678 or $6.93 a share on the 600,000 shares 
of common stock outstanding. This included $1,402,117 of net operating income 
after provision for taxes, and special items totaling $2,756,561 resulting from the 
disposition of flight equipment. During the fiscal year four dividends of 25 cents 
a share each were paid and in the first quarter of the new fiscal year a dividend 
of 30 cents a share was declared on July 1-4, 1953, payable September 7, 1953. 
The merger was completed on May 1, 1953, pursuant to the terms of the merger 
agreement approved by the stockholders of both companies at special meetings 
held on April 22, 1953. 
The figures and charts in this report reflect only the combined operation after 
May 1, 1953, and exclude the operating results of C&S for all periods prior to 
the merger. 
Delta Air Lines, Inc., as the surviving corporation, issued to the C&S stock- 
holders 5% convertible subordinated debentures maturing May 1, 1973, in 
the total amount of $10,695,846, being $21 of debentures for each share of C&S 
stock. These debentures are convertible into Delta common stock at the rate of 
$35 a share. Thirty per cent of the debentures are callable during the first two 
years and the remainder are callable at any time thereafter, subject to a slight 
premium during the first four years. The face value of the debentures exceeded 
the net book value of the C&S tangible assets by $2,753,381. This difference was 
recorded on the Delta balance sheet as an intangible asset, "Property Acquisition 
Adjustment," which is being amortized over a five-year period from May 1, 1953, 
by monthly charges to income. The fair market value of the C&S Constellations 
DELTA-C&S AIR LINES 
 and DC-3's far exceeded the net depreciated value at which these aircraft were 
transferred to Delta in the merger. When they are sold any amounts received in 
excess of the depreciated value will be applied to reduce the Property Acquisition 
Adjustment account. 
One of the important benefits of the merger, the elimination of mail pay sub- 
sidy on domestic operations, has already been accomplished. Other benefits are 
necessarily being achieved more slowly over a longer term. These include im- 
proved service to the public, as well as increased revenues to the Company, by 
providing new through-plane schedules between major terminals on the inte- 
grated routes. One of the first of these, a daily Convair aircoach between Detroit 
and Dallas, was inaugurated on September 27, 1953. Progress is also being made 
toward other merger objectives. 
Revenues 
The operating revenues of your Company were $32,337,802 for the fiscal year 
ended June _ 
30, 1953, against $27,018,121 for the previous fiscal year, a gain of 
19.7%. Passenger revenues increased 20.6%, express revenues increased 27 ,6%, 
and freight revenues increased 26.1 %; while mail pay increased only 9.3% and 
in fiscal 1953 represented 3.5% of total operating revenues compared with 3.8% 
in fiscal 1952. The entire Delta-C&S domestic system has been operating on a 
straight compensatory mail rate of 53 cents a ton mile, entirely free of any sub- 
sidy, since the merger on May 1, 1953 . 
. Capitalization 
During the fiscal year ended June 30, 1953, the capital stock and capital surplus 
of Delta Air Lines, Inc., were increased $300,000 and $1,955,107, respectively, 
by the sale of 100,000 shares of common stock for cash irt August 1952; and the 
earned surplus was increased $3,583,678 by retained earnings. At the end of the 
fiscal year, total capital and surplus amounted to $15,647,278, equivalent to $26.08 
for each of the 600,000 shares of common stock outstanding. Long term debt 
represented $10,758,846 of 5% convertible subordinated debentures and $2,- 
250,000 borrowed from banks under the credit agreement described hereafter. 
Flight Equipment 
During the year your Company made important progress in retirement of older 
equipment on favorable terms and moved toward standardization of new flight 
equipment with increased speed, capacity, and profit potentials. 
--------$35,000,000 
SOURCES OF THE 
1953 REVENUE 
DOLLAR 
EXPRESS & FREIGHT 
4.93% 
U. S. MAIL 
3.50% 
'44 
SOURCE OF OPERATING REVENUES 
FOR YEARS ENDED JUNE 30 
PASSENGERS 
89.51% 
'45 '46 '47 '48 '49 
30,000,000 
20,000,000 
10,000,000 
'50 '51 '52 '53 
 E PASSENGER MILES 
FOR YEARS ENDED JUNE 30 
'44 '45 '46 '47 '48 '49 '50 '51 '52 '53 
At the end of the fiscal year the Company's flight equipment consisted of seven 
DC-6's, six Constellations, seven Convair 340's, and thirty DC-3's, including three 
all cargo versions. On order were ten DC-Ts and thirteen additional Convairs. 
Seven of these Convairs have already been received since July I, 1953, and the 
remaining six are scheduled for delivery over the next few months. The first 
DC-7 will be delivered to us in February 1954 and by the spring of 1955 the full 
fleet of ten should be in operation over our routes. 
During the year we sold the last six of the Company's DC-4 aircraft together 
with most of the related maintenance spares; also, we sold one DC-3 and lost 
another in an accident. The sale and retirement of this flight equipment resulted 
in a net capital gain of $2,756,561 after applicable income taxes, shown as a 
special item on the-,income statement. 
To take advantage of the favorable seller's market, Delta's six DC-4's were 
sold before receipt of Convair replacements and it was necessary to execute an 
agreement with the purchaser providing for the lease of five DC-4's or their 
equivalent for varying periods of time to June 30, 1953. This lease agreement 
gives rise to the charge of $1,067,800 appearing on the income statement as 
"Rental Payments for Leased Flight Equipment." 
In July 1953 we contracted to sell the twelve C&S 21-passenger DC-3's for a 
total price of $500,000 including nine spare engines. Eight of these aircraft have 
already been delivered to the purchaser and the remaining four will be delivered 
before the end of 1953. For the present, your Company is retaining fifteen Delta 
25-passenger DC-3's, with built-in loading ramps, for use over the entire system 
until complete retirement of the DC-3's. 
The Company's new Convair aircraft have been put into service as received 
and have already gained wide popularity with the traveling public. These 44- 
passenger, 270-mile-an-hour twin-engine planes are rapidly replacing the slower, 
older types of equipment on schedules over the entire Delta-C&S domestic system. 
The new Douglas DC-Ts on order represent the most modern and improved 
design of transport aircraft offered by American manufacturers. With cruising 
speeds in excess of 360 miles an hour and seating capacity for 69 passengers, these 
outstanding airplanes will give Delta-C&S the leading competitive position for 
longhaul traffic in the territory served by your Company, as manufacturers' esti- 
mates indicate the DC-7 will exceed the speed of the closest competitive aircraft 
by approximately 30 miles per hour. 
600 
500 
V) 
400 
z 
0 
:::; 
....I 
~ 
300 z 
200 
100 
3 
 4 
Financing 
Your Company has a credit agreement with a group of 25 banks under which 
$20,000,000 may be borrowed at any time prior to August I, 1954, on unsecured 
notes at 3% interest, to finance the purchase of new aircraft. At the end of 
the fiscal year $2,400,000 had been borrowed under this credit agreement and 
since that time an additional $6,600,000 has been borrowed, leaving a balance 
of $11,000,000 still available. In addition, your Company has approximately 
$4,000,000 of cash and securities in excess of minimum working balances that 
can be applied to the new equipment programs. Commitments presently out- 
standing under these programs aggregate approximately $20,000,000 (after de- 
ducting advance payments already made). It is expected that some of the funds 
required will be provided by depreciation charges and by the sale of flight equip- 
ment being replaced, and the amount of cash derived from these sources will 
determine how much of the $20,000,000 credit will be used. 
The bank loan is payable in quarterly installments over a four-year period 
starting 15 months after the borrowing date. If the full $20,000,000 of the avail- 
able credit is borrowed, the maximum repayment in any year would be $5,000,000, 
which is the approximate amount of the annual depreciation charges on the new 
aircraft. The credit agreement imposes no restrictions on dividends except that 
earned surplus may not be reduced below $3,700,000 and working capital of at 
least $1,500,000 must be maintained. At June 30, 1953, earned surplus stood at 
. $8,174,842 and working capital as defined in the loan agreement exceeded 
$4,800,000, both well above the prescribed minimums. 
Mail Rates 
Delta has been operating on a subsidy-free compensatory mail rate of 53 cents 
a ton mile since October 1, 1951, while C&S prior to the merger was receiving 
subsidy under final mail rates on both domestic and international routes. When 
the merger went into effect on May l, 1953, these mail rates were opened for 
review and redetermination. 
By a show-cause order dated May 1, 1953, the CAB proposed to extend Delta's 
compensatory mail rate of 53 cents a ton mile to the entire Delta-C&S domestic 
system. By a similar order dated September 21, 1953, the CAB proposed to estab- 
lish a new rate for the Company's international routes which, like the previous 
C&S rate, provides an element of subsidy through a sliding scale formula based 
on passenger load factors. Both proposed rates have been accepted by the Com- 
pany and, subject to the usual procedural steps, it is expected that they will be 
made final, although the eventual Court decision in the Post Office case described 
below may have a direct effect on the amm.int of the international subsidy. 
The CAB estimates that the new mail rates will produce domestic mail pay 
of $1,598,000 a year and international mail pay of $792,000 a year. These esti- 
mates compare with domestic mail pay of $1,833,221 and international mail 
pay of $900,211 for Delta and C&S combined for the twelve months ended June 
30, 1953, based on the final rates that were in effect to April 30, 1953, and the 
proposed rates effective May 1, 1953, which have not yet been finalized. The 
Company has been accruing both domestic and international mail revenues at 
compensatory rates since May I, 1953. The proposed rates would therefore not 
affect the domestic mail revenues as reported, but would provide additional in- 
ternational mail revenues of approximately $100,000 for May and June 1953. 
MILLIONS 
100 
90 
80 
70 
60 
50 
40 
30 
20 
10 
'44 '45 '46 '47 '48 '49 '50 
PLANE MILES 
(Millions} 
'51 '52 
TON MILES and 
.. 
'53 
PLANE MILES 
FOR YEARS ENDED JUNE 30 
I 
On March 18, 1952, the Post Office Department filed a petition requesting the 
United States Court of Appeals for the District of Columbia Circuit to review 
the C&S final international mail rate order issued by the CAB on October 18, 
1951. The Post Office Department contended that the CAB erred in refusing to 
offset the profits above 7.4% earned under the Company's final domestic mail 
rates during the years 1948-1950 against the mail pay need of the Company's 
international operations, and accordingly that the Company's mail pay for that 
period should be reduced by $654,000. On May 4, 1953, the Circuit Court, by 
a divided decision with a strong dissenting opinion, decided in favor of the Post 
Office Department and ordered the CAB to revise the Company's mail rate ac- 
cordingly. Both the CAB and Delta have petitioned the United States Supreme 
Court to review this decision, and it is the opinion of the Company's counsel 
that if such review is granted the Supreme Court will reverse the decision of the 
lower Court and uphold the original decision of the CAB, both as a matter of 
law and equity. 
Taxes 
Your Company's Federal income taxes for the twelve months ended .June 30, 
1953, amounted to $1,754,000, substantially exceeding the total mail pay of 
$1,131,578 received for this period. In addition, transportation taxes of $3,750,000 
were collected by Delta for the Government from passengers and shippers. 
Advertising and Sales Promotion 
In anticipation of the merger, C&S last year appointed the same advertising 
agency as Delta. This permitted advance planning and correlation of the adver- 
tising programs of the two Companies and greatly facilitated the quick, smooth 
change-over to the new operating name on May 1, 1953. The consolidated Com- 
pany immediately embarked upon a national advertising program, made possible 
by the enlarged territory which embraces a high percentage of the total circula- 
tion of magazines with nation-wide coverage . 
. In order to help round out its business during the year, your Company, con- 
tmued to promote summer package tours, utilizing aircoach rates and summer 
excursion fares to Florida and the Caribbean islands in combination with off- 
se~soi:i hotel prices. An_ ~nergeti~ sales program, with bold advertising in all 
prmc1pal media, was ut1hzed to mtroduce new Convair equipment and to sup- 
port all new and old operations of the Company. 
5 
 Interchanges 
During the year Delta continued to operate interchange flights providing through- 
plane services from Florida and the Southeast to California under interchange 
agreements with American Airlines and National Airlines, also through-plane 
service from the Southeast to Detroit under an interchange agreement with Trans 
World Airlines. On April 1, 1953, C&S and TWA inaugurated interchange flights 
from Houston to Pittsburgh and New York over two routings - one via St. Louis 
and the other via Shreveport, Memphis, and Indianapolis. All of these through- 
plane services are in daily operation and they carry a substantial volume of long- 
haul traffic over the Delta-C&S routes. 
Route Extension and Integration 
Delta-C&S has on file with the Civil Aeronautics Board several route extension 
applications intended to strengthen and expand significantly the air service pres- 
ently provided by your Company, as well as to fully integrate the route structure 
of the merged operation. Of principal importance among these pending applica- 
tions are the proposals designed to connect your Company's extensive route cov- 
erage of the South with the nation's No. I traffic-generating area, New York City. 
The consolidation of the two systems by the merger should strengthen Delta's 
claim for a new route to Washington and New York, since additional cities are 
now included in the group of those needing new or competitive Washington and 
New York service. 
Other applications on file with the Civil Aeronautics Board and also awaiting 
hearings, include: 
1. Full integration of the international and domestic route 
systems through extension of Route No. 114 north from 
Havana to Miami. 
2. The extension of service beyond Chicago to Minneapolis/St. 
Paul via Milwaukee and Rochester. 
3. The bridging of the gap between Atlanta/Birmingham and 
Memphis. 
4. The authority to carry domestic traffic between Houston 
and New Orleans, a route segment now restricted to inter- 
. national traffic. 
Procedural delays have prevented further progress in the processing of the 
proposed Northeast Airlines merger before the CAB. Approval of the merger 
NET BOOK VALUE PER SHARE OF COMMON STOCK 
DOLLARS 
PER SHARE 
28 
26 
24 
22 
20 
18 
16 
14 
12 
10 
4 
2 
0 
'44 '45 '46 
As of June 30 
'47 '48 '49 '50 '51 '52 '53 
 20 years 
and over 
6 
PERSONNEL BY LENGTH OF SERVICE 
As of June 30, 1953 
15-20 
years 
85 390 1,472 
Total 
1,571 757 4,281 
agreement is conditioned upon extension of the present Delta-C&S system into 
the New York area. There is no present indication as to when the final CAB 
decision may be expected. 
Personnel 
The merger has focused attention on the value of the personnel of the consoli- 
dated Company. The harmonious and fair integration of the two employee 
groups has attracted wide attention inside and outside the air transport industry. 
High morale has been maintained and a spirit of fine cooperation has been evi- 
dent during the process of integrating seniority lists, equalizing pay scales, re- 
assigning duties and in other steps taken during the process of welding . the two 
organizations into one. 
In keeping with the Company's policy of maintaining wage rates in line with 
the industry, a general wage and salary increase was granted in August 1953. 
The separate retirement income plans of Delta and C&S were consolidated on 
July 1, 1953, into a new plan which insofar as feasible retains the best features 
of both old plans. Other Company benefit programs which have been correlated 
and continued include a liberal group insurance plan, vacations with pay, sick 
leave, free and reduced rate transportation, and paid holidays. At June 30, 1953, 
total personnel numbered 4,281, shown by length of service in the chart above. 
future Outlook 
Continuing deliveries of new equipment during the new fiscal year will place 
your Company in a position to inaugurate new services over the combined routes 
of the consolidated Company and to share in the anticipated increase in air 
travel. With our modern fleet, experienced personnel, and sound finances, we 
look forward with optimism to maintaining our position among the leaders of 
the industry in the years ahead. 
President and General Manager 
October 5, 1953 
7 
 - - - - - - ASSETS- - - - - + + 
8 
CURRENT ASSETS: 
Cash . . . . . . . . . . . . . 
Marketable securities, at cost (quoted market 
value at June 30, 1953 -$2,490,161) - 
U. S. Government securities . . . 
Federal Land Bank and Home Loan Bonds 
Accounts receivable - 
Traffic (net) . . . . . . . . . . . . . 
U. S. Post Office Department, for carrying mail 
(Notes 4 and 5) . . . . . . . . . . 
Refundable 1952 Federal excess profits tax . 
Other . . . . . . . . . . . . . . . 
Maintenance and operating supplies, at average 
cost or less . . . . . . . 
Other current assets . . . . 
Total current assets . . . . . . 
OTHER ASSETS: 
Advance payments on new flight equipment 
(Note 7) . . . . . . . . . . . . . . 
Net assets of dusting division . . . . . . . 
Miscellaneous, including in 1953 nonoperating 
property of $233,556, less reserve of $187,257 . 
OPERATING PROPERTY AND EQUIPMENT 
(Including $4,782,471 and $4,686,416 fully de- 
preciated in 1953 and 1952 respectively): 
Cost- 
1953 
1952 
Reserves for 
depreciation - 
1953 
1952 
Flight 
Equipment 
In Service 
(Note 3) 
$22,290,074 
ll,281,161 
10,324, 77 5 
6,729,546 
Other 
Property and 
Equipment 
$5,469,753 
3,454,061 
2,502,646 
1,298,250 
PROPERTY ACQUISITION ADJUSTMENT, 
less amortization of $91,778 (Note 2) . . 
DEFERRED CHARGES: 
Unamortized Convair preinaugural expense . . 
Advances for leased facilities, beihg amortized 
Other deferred charges . . . . . . . . 
195 3 
(Note 1) 
$ 7,038,496 
1,768,902 
730,000 
2,713,014 
409,687 
370,000 
547,614 
2,342,012 
443,076 
$16,362,801 
$ 3,381,798 
141,051 
ll9,814 
$ 3,642,663 
$27,759,827 
12,827,421 
$14,932,406 
$ 2,661,603 
$ 124,442 
107,962 
134,592 
$ 366,996 
$37,966,469 
DELTA AIR LINES, INC. 
ATLANTA, GEORGIA 
BALANCE SHEETS JUNE 30, 1953 and 1952 
+- 
 
- - - LIABILITIES- - - - - - - 
1952 
$ 2,174,840 
2,394,162 
200,000 
1,320,240 
151,955 
329,385 
2,307,335 
149,573 
$ 9,027,490 
$ 
$ 
763,909 
124,631 
20,914 
909,454 
$14,735,222 
8,027,796 
$ 6,707,426 
$ 
$ 
119,908 
72,627 
$ 192,535 
$16,836,905 
1953 1952 
CURRENT LIABILITIES: 
Current maturities of long-term debt . 
Accounts payable and accrued liabilities . 
Accrued Federal and state taxes on income 
Advance sales of tickets for transportation 
Air travel plan deposits . . . . . 
Total current liabilities . 
 
LONG-TERM DEBT: 
5% Convertible Debentures (Subordinated) 
due May l, 1973 (convertible into common 
stock at $35.00 per share) . . . . . . . . 
Notes payable to banks (less current maturities 
above) - (Note 9) . . . . . . . . . . . 
(Note 1) 
$ 450,000 
4,368,424 
2,856,998 
990,469 
526,150 
$, 9,192,041 
$10,758,846 
2,250,000 
$13,008,846 
RESERVE FOR AIRCRAFT OVERHAUL . . . $ 118,304 
CAPITAL STOCK AND SURPLUS: 
Common stock, par value $3.00 per share, 
Authorized 1,500,000 shares, of which 3 I 2,646 
shares are reserved for conversion of Deben- 
tures 
Issued and outstanding 600,000 shares 
at June 30, 1953 and 500,000 shares 
at June 30, 1952 (Note 6) . . . . $ 1,800,000 
Capital surplus (principally net premium on sale 
of common stock) . . . . . . . . . . . 5,672,436 
Earned surplus (of which $3,700,000 is not avail- 
able for cash dividends under terms of credit 
agreement and indenture) . . . . . . . . 8,174,842 
$15,647,278 
PURCHASE COMMITMENTS (NOTE 7) 
$37,966,469 
$ 700,000 
1,896,713 
3,342,448 
469,091 
210,375 
$ 6,618,627 
$ 
300,000 
$ 300,000 
$ 109,785 
$ 1,500,000 
3,717,329 
4,591,164 
$ 9,808,493 
$16,836,905 
The accompanying notes are an integral part of these statements. 
 STATEMENTS 
OF INCOME 
For the Years Ended 
June 30, 1953 and 1952 
10 
OPERATING REVENUES: 
Passenger . . . . 
U. S. Mail (Note 5) 
Freight . . . . . 
Express . . . . . 
Excess baggage 
Other operating 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 be- 
fore income taxes and rental 
payments for leased flight 
equipment . . . . . . . 
RENTAL PAYMENTS FOR LEASED FLIGHT 
EQUIPMENT (NOTE 8) . . . . . . . 
OTHER EXPENSE (INCOME): 
Interest expense . . . . . . 
Amortization of property acquisition adjust- 
ment (Note 2) . . . . . . . . 
Net loss (profit) of dusting division . 
Other income - net . . . . . . . 
Total other expense (income) 
Net income before income taxes 
PROVISION FOR TAXES ON INCOME: 
Federal and state taxes on income (no excess 
profits tax in 1953) . . . . . . . . . 
Refundable 1952 Federal excess profits tax 
Net income . . . . . . . 
SPECIAL ITEM (NOTE 8) - Profit on disposi- 
tion of flight equipment (less $1,066,000 ap- 
plicable income taxes) . . . . . . . . . 
Net income and special item . 
195 3 
(Note 1) 
$28,946,479 
1,131,578 
1,044,338 
550,305 
380,298 
284,804 
$32,337,802 
$ 8,558,952 
3,903,396 
2,003,577 
$14,465,925 
3,949,720 
2,258,382 
2,024,778 
3,085,461 
1,021,002 
1,840,253 
256,207 
$28,901,728 
$ 3,436,074 
$ 1,067,800 
$ 224,300 
91,778 
31,337 
69,258) 
$ 278,157 
$ 2,090,117 
$ 1,058,000 
( 370,000) 
$ 688,000 
$ 1,402,117 
2,756,561 
$ 4,158,678 
1952 
$23,995,938 
1,035,599 
827,927 
431,240 
307,305 
420,112 
$27,018,121 
$ 6,845,962 
3,028,043 
1,255,876 
$11,129,881 
3,057,451 
1,702,309 
1,579,050 
2,540,527 
938,574 
1,463,597 
229,680 
$22,641,069 
$ 4,377,052 
$ 
$ 34,565 
2,217) 
44,746) 
($ 12,398) 
$ 4,389,450 
$ 2,739,000 
$ 2,739,000 
$ 1,650,450 
The accompanying notes are an integral part of these statements. 
 Earned Capital STATEMENTS 
Surplus Surplus 
$4,591,164 $3,717,329 
OF SURPLUS 
Balance, June 30, 1952 
For the Year Ended 
Add: June 30, 1953 
Net income . 1,402,117 
Special item (Note 8) - Profit on disposition of 
flight equipment (less $1,066,000 applicable in- 
come taxes) . 2,756,561 
Net proceeds from sale of 100,000 shares of com- 
mtm stock over its par value of $3.00 per share 1,955,107 
$8,749,842 $5,672,436 
Deduct: 
Cash dividends on common stock 575,000 
Balance, .June 30, 1953 ($3,700,000 of earned sur- 
plus restricted as indicated on balance sheet) $8,174,842 $5,672,436 
The accompanying notes are an integral part of these statements. 
ARTHUR ANDERSEN & Co. 
AccOUNTANTII AND AUDITORS 
To the Board of Directors, 
Delta Air Lines, Inc.: 
THE WILLIAM  0LJVJ!:ft BUILDING 
ATLANTA 3 
We have examined the balance sheet of Delta 
Air Lines, Inc. (a Louisiana corporation) as of 
June 30, 1953, and the related statements of income 
and surplus for the year then ended. Our examina- 
tion was ma.de 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, 1953, 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, 
September 12, 1953. 
AUDITOR'S CERTIFICATE 
II 
 12 
NOTES TO 
FINANCIAL 
STATEMENTS 
1. Merger with Chicago and Southern Air Lines, Inc.: 
On May 1,. 1953, Chicago and Southern Air Lines, Inc. (C&S) ~as merged 
with and into Delta Air Lines, Inc. Consequently, the accompanymg balance 
sheet at June 30, 1953, reflects the results of such merger an_d the statement of 
income for the year ended June 30, 1953, reflects the operat10ns of the merged 
system only since May 1, 1953. 
2. Property Acquisition Adjustment: . 
The gross amount in this account (representing the excess of (1) the prm- 
cipal amount of convertible debentures issued for the common stock of C&~ as 
a step in the merger referred to above, over (2) the net book value of the tangible 
assets of C&S as of April 30, 1953) is approximately equivalent to the excess of 
the fair market value of the flight equipment acquired from C&S in the merger 
over the net book value thereof at the merger date. This excess has been related 
to the following classes of property: 
Flight equipment - 
Constellation aircraft and engines 
DC-3 aircraft and engines 
Intangibles 
$2,211,597.00 
444,000.00 
$2,655,597.00" 
97,783.68 
$2,753,380.68 
The gross amount in t~is account is being amortized as a nonoperating de- 
duction from income over a sixty-month period commencing with the month of 
May 1953. 
The Company intends to credit this account with any excess over net book 
value realized from the disposition of such of the above property as may be sold. 
Subsequent to June 30, 1953, the Company contracted to sell all of the DC-3 
aircraft and nine spare engines acquired from C&S for $500,000, which exceed~ 
the net book value of such equipment by $464,000. 
3. Flight Equipment: 
At June 30, I 953, the Company's fleet consisted of the following aircraft: 
Type 
Constellation Model 649 
DC-6 
Convair Model 340 
DC-3 (including 3 all cargo) 
Total . 
Cost 
Number (Including 
Spare Parts) 
6 $ 7,012,738 
7 7,012,684 
7 4,845,217 
30 3,419,435 
50 $22,290,074 
Depreciated 
Value 
$ 3,674,565 
3,438,073 
4,643,789 
208,872 
$11,965,299 
The Constellations are being depreciated to a residual value of $50,000 each from 
the dates placed in service (3 in 1950 and 3 in 1951) to December 31, 1955. The 
DC-6's are being depreciated to a residual value of 10% of cost from the dates 
placed in service (4 in 1948, 2 in 1949 and I in 1951) to December 31, 1955. 
Under terms of a Certificate of Necessity, 80% of the cost of the Convairs will 
be amortized over a period of five years from the dates placed in service (all in 
1953). The remaining cost will be depreciated to a residual value of 10% over 
seven years from the dates placed in service. Eighteen of the DC-3's have been 
fully depreciated to a residual value of I 0% of cost and twelve to a residual value 
of $3,000 each. Subsequent to June 30, 1953, the Company contracted to sell 
twelve of the DC-3's (See Note 2 above). 
4. Mail Rate Litigation: 
On March 18, 1952, the Post Office Department filed a petition requesting 
the United States Court of Appeals for the District of Columbia Circuit to review 
the C&S international mail rate order issued by the Civil Aeronautics Board 
(CAB) on October 18, 1951. The Post Office Department contends that the CAB 
erred in refusing to offset the profits above 7.4% earned under the C&S final - 
domestic mail rates during the years 1948-1950 against the mail pay need of that 
company's international operations, and accordingly that the Company's mail 
pay for that period should be reduced by $654,000. By opinion of May 4, 1953, 
the Circuit Court held that the CAB had erred in refusing to follow the offset 
principle and remanded the case to the CAB for determination and fixing of 
 rates in accordance with the Court's opm10n. Both the CAB and Delta (the 
latter substituted for C&S by reason of merger) have filed petitions requesting 
the United States Supreme Court to review the decision of the Circuit Court. 
Such review is a matter of discretion with the Supreme Court but the Post Office 
Department has advised the Supreme Court that it has no objettion to the review. 
It is the opinion of Delta's counsel that should this review be granted, the Su- 
preme Court will reverse the decision of the Circuit Court and will uphold the 
original decision of the CAB, both as a matter of law and equity. 
5. Basis of Mail Revenue: 
Mail revenues from the United States Government through April 30, 1953, 
are stated in accordance with final rates fixed by the CAB. The CAB is in process 
of determining final rates to be effective from May 1, 1953, forward and has issued 
show-cause orders proposing a compensatory (non-subsidy) rate of 53 cents per 
ton mile for the Company's domestic routes, and a sliding scale rate containing 
an element of subsidy for the Company's international routes. The CAB estimates 
that the proposed rates will produce domestic mail pay of $1,598,000 per year 
and international mail pay of $792,000 per year. Pending finalization of these 
proposed rates the Company has been recording both domestic and international 
mail revenues at the compensatory (non-subsidy) rates of 53 cents per ton mile 
and 88 cents per ton mile, respectively. If the proposed rates are made final, there 
will be no change in domestic revenues as recorded, but the Company will receive 
approximately $100,000 of additional international mail pay for the months of 
May and June, I 953, although the outcome of the litigation explained in Note 4 
above may have a direct effect upon the amount of the international subsidy. 
6. Options Granted Officers: 
The merger agreement referred to in Note I provides that options granted 
to certain officers of C&S ( now officers of Del ta) for the purchase of I I, 7 50 shares 
of common stock of C&S for $10.00 per share shall be honored by Delta by selling 
to holders of the options at $10.00 per share the amount ($21.00) of 5% Con- 
vertible Debentures (Subordinated) which stockholders of C&S may receive in 
exchange for each share of their common stock. As of June 30, 1953, holders of 
these options had paid in $30,000 and received therefor $63,000 of Debentures, 
the difference being charged to expense. The remaining options equivalent to 
8,750 shares of common stock of C&S expire on August 21, 1956. 
1. Purchase Commitments: 
The Company has received seven of the twenty Convair Model 340 aircraft 
ordered and has outstanding commitments for the remaining thirteen (with de- 
liveries scheduled through February 1954) and for ten DC-7 aircraft (to be 
delivered in 1954 and 1955). It is estimated that the acquisition of these aircraft 
and related spare parts and accessories will require a total capital outlay of 
approximately $28,000,000. Advances to manufacturers in connection with these 
commitments amounted to $3,381,798 at June 30, 1953. The Company has re- 
ceived Certificates of Necessity applicable to all twenty Convairs and to four of 
the DC-7 aircraft permitting the amortization for tax purposes of 80% of their 
cost over a period of five years. Application has been filed for a Certificate of 
Necessity to cover the remaining six DC-7 aircraft on order. 
8. Aircraft Sales and Rentals: 
The Company in 1952 sold its six DC-4 aircraft and spare engines therefor 
for $3,975,000. Pending delivery of Convair aircraft on order, lease agreements 
(the last expiring on June 30, I 953) were entered into with the purchaser of five 
DC-4 aircraft providing for the continued operation by Delta of these aircraft 
or their equivalent. 
9. Bank Loan Agreement: . 
On September 2, I 952, Delta entered into a Credit Agreement with twenty- 
five banks under which $20,000,000 may be borrowed at any time prior to August 
1, 1954, on unsecured notes bearing interest at 3'% repayable in sixteen quarterly 
installments commencing fifteen months after the date of each loan. Under terms 
of the agreement a commitment fee of  of I% per annum is payable on the 
unused portion of the commitment. At June 30, 1953, $2,400,000 (due serially 
to June 1958) had been borrowed under the Agreement and an additional 
$6,600,000 has subsequently been borrowed. 
NOTES TO 
FINANCIAL 
STATEMENTS 
13 
 14 
A DECADE OF GROWTH - - - 
CURRENT ASSETS 
Current Liabilities 
Net Working Capital 
Total Assets 
Stockholders' Equity 
Stockholder Equity Per Share 
Shares of Common Stock Outstand- 
ing at Close of Year . 
OPERATING REVENUES: 
Passenger . 
Mail 
Express 
Freight 
All Other .. 
Total Revenues . 
Operating Expenses . 
Operating Profit, Before Income 
Taxes 
Non-Operating Revenue or (Ex- 
pense) . 
Net Income Before Taxes 
Federal and State Taxes on Income 
Net Profit (and Special 1953 Items) 
Profit Per Share of Stock Outstand- 
ing at Close of Year 
REVENUE PLANE MILES (000) 
Available Seat Miles (000) 
Revenue Passenger Miles (000) 
Passenger Load Factor . 
Available Ton Miles (000) , . 
Revenue Ton Miles (000) 
% of Scheduled Mileage Completed 
19 5 3 (4) 
$16,362,801 
9,192,041 
7,170,760 
37,966,469 
15,647,278 
26.08 
600,000 
$28,946,479 
1,131,578 
550,305 
1,044,338 
665,102 
32;337,802 
28,901,728 
3,436,074 
2,476,604(1) 
5,912,678 (3) 
1,754,000 (2) 
4,158,678 (3) 
6.93 
20,672 
776,157 
507,714 
65.41 % 
94,045 
57,565 
98.83% 
1952 
$ 9,027,490 
6,618,627 
2,408,863 
16,836,905 
9,808,493 
19.61 
500,000 
$23,995,938 
1,035,599 
431,240 
827,927 
727,417 
27,018,121 
22,641,069 
4,377,052 
12,398 
4,389,450 
2,739,000 
1,650,450 
3.30 
17,531 
653,121 
427,534 
65.46% 
80,089 
48,093 
98.98% 
1951 
$ 7,184,532 
4,541,282 
2,643,250 
14,402,050 
8,658,043 
17.32 
500,000 
$19,006,936 
1,306,752 
374,480 
720,719 
812,112 
22,220,999 
18,889,201 
3,331,798 
(75,000) 
3,256,798 
1,625,000 
1,631,798 
3.26 
15,698 
541,038 
345,246 
63.81 % 
71,987 
40,480 
98.91 % 
1950 
$ 5,170,591 
2,950,443 
2,220,148 
12,371,851 
7,401,245 
14.80 
500,000 
$13,761,453 
2,373,213 
238,441 
478,537 
333,651 
17,185,295 
15,775,141 
1,410,154 
(5,403) 
1,404,751 
589,000 
815,751 
1.63 
13,804 
437,209 
238,335 
54.51% 
59,532_ 
97.90% 
(1) Includes profit on disposition of flight equipment $3,822,561, less rental payments for leased 
flight equipment $1,067,800 and miscellaneous expenses (net) $278,157. 
(2) Includes taxes of $1,066,000 on capital gains and taxes of $1,058,000 on income, less refund- 
able 1952 excess profits tax of $370,000. 
(3) Includes special items of $3,822,561 before taxes and $2,756,561 after taxes. 
(4) Reflects merger with C&S on May 1, 1953. 
 I 
I 
1----------------" " 
1949 1948 1947 1946 1945 1944 
$ 5,310,482 $ 4,682,029 $ 5,630,338 $ 2,765,210 $ 4,573,035 $ 1,668,698 
2,751,859 2,180,988 2,253,963 1,638,948 1,451,981 667,481 
2,558,623 2,501,041 3,376,375 1,126,262 3,121,054 1,001,217 
12,629,268 9,352,827 9,306,766 6,034,364 5,537,587 2,324,048 
6,710,494 6,196,053 5,789,701 4,220,770 . 4,085,606 1,656,566 
13.42 12.39 11.58 10.55 10.21 8.35 
500,000 500,000 500,000 400,000 400,000 198,384 
$11,987,246 $10,079,272 $10,558,559 $ 6,944,162 $ 4,193,214 $ 2,577,139 
2,434,888 2,010,'668 423,292 680,359 752,719 517,371 
244,859 273,099 242,978 137,540 97,286 65,507 
358,503 303,115 109,603 
202,349 152,815 154,404 97,955 113,063 73,308 
15,227,845 12,818,969 11,488,836 7,860,016 5,156,282 3,233,325 
14,281,956 12,618,944 11,782,368 7,304,153 3,650,087 2,395,536 
945,889 200,025 (293,532) 555,863 1,506,195 837,789 
62,551 107,048 (67,302) (12,793) (57,279) 28,297 
1,008,440 307,073 (360,834) 543,070 1,448,916 866,086 
369,000 102,343 127,459* 232,835 910,221 314,853 
639,440 204,730 (233,375) 310,235 538,695 551,233 
1.28 .41 (.47) .78 1.34 2.78 
12,921 12,803 11,822 8,195 4,676 2,772 
361,199 349,235 335,630 186,650 96,927 57,367 
201,711 188,293 222,704 150,072 84,877 51,844 
55.84% 53.92% 66.35% 80.04% 87.57% 90.97% 
49,544 46,562 42,716 21,981 11,221 6,652 
22,805 19,966 22,799 15,860 9,741 6,070 
97.69% 94.22% 94.71% 96.63% 95.55% 94.12% 
 Credit 
( ) Loss 
15 
 N E W F L I G H T EQUIPMENT 
Important progress was made toward modernization of 
equipment during the fiscal year. All the DC-4's and part 
of the DC-3 fleet were sold as new Convair aircraft were 
received to replace these older types. Six additional DC-Ts, 
ma,king a total of ten, were ordered for use on non-stop and 
long-range flights over the combined routes of Delta-C&S. 
Deliveries will start in February '54 on a fleet of ten b9-passen- 
ger DC-7's, which will cruise at 362 mph, 30 miles faster than 
competing ships. Compound engines provide additional power. 
Fourteen of the 20 Convair 340's ordered are already in 
scheduled operation. These versatile ships carry 44 passengers 
at 270 mph, wit-h many new features like the built-in ramp. 
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 GENERAL OFFICES. MUNICIPAL AIRPORT 
ATLANTA, GEORGIA