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WISCONSIN CENTRAL AIRLINES 
INC. 
YEAR ENDED DECEMBER 31, 1948 
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EAU CLAIRE 
1,,. MINNciPOLIS 
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- C.A.B. authorized route now 
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in operation 
C.A.B. authorized route on 
which service is delayed 
pending improvement of 
airports 
   Proposed service to i.and o 
Lakes 
, ... 
STEVENS PT.- 
WIS. RAPIDS 
sVPERIOR 
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 On behalf of the Board of Directors, we are pleased to submit a 
review of our first year of scheduled airline operations and the 
financial statements of the company for the calendar year 1948. 
REVIEW OF FIRST YEAR'S OPERATION: 
Our first scheduled flights carrying passengers, mail, and express 
were authorized on February 24, 1948. The ten-month period follow- 
ing the start of scheduled operations was one of perfecting the 
organization, improving and adding equipment, and expanding the 
operation. 
The company started scheduled operations with two airline certi- 
fied Lockheed twin engine, nine passenger aircraft. The third plane 
was placed in operation within a month and while these three planes 
met all safety requirements, they were not equipped for instrument 
operation and required extensive modification to meet this standard. 
Three additional aircraft, all of the same make and size, were pur- 
chased during the year and modified to meet air carrier requirements. 
Four of the six aircraft are now fully modified for instrument authority 
and it is anticipated that the remaining two aircraft will be fully 
converted for instrument operation in approximately thirty days. 
The cost of the aircraft, completely modified, averages approxi- 
mately $38,000 per plane. 
OPERATION RESULTS: 
Operating revenues for the ten months of scheduled operations 
were $703,123.45, plus $2,132.84 of other income. Operating ex- 
penses for the same period were $739,648.19, which, with other de- 
ductions amounting to $3,029.35, resulted in a net loss of $37,421.25, 
after a provision for depreciation amounting to $40,229.47. It has 
been the policy of the Civil Aeronautics Board in determining mail 
rates of feeder airlines to reimburse them for operating losses pl us 
an additional amount equivalent to 7% return on investment used 
in the operation. 
Inventories at our cost at the beginning of scheduled operations 
amounting co $30,564.58 were required to be increased to $82,379.15 
at the end of the year and the investment in operating property and 
equipment was increased from $193,541.93 to $297,744.77 after 
deducting $47,273.19 as a reserve for depreciation. 
FINANCIAL: 
Pending a final determination of the company's permanent mail 
rate, which cannot be anticipated until the latter part of 1949, the 
company found it necessary to resort to long-term borrowing from 
an insurance company. The amount due from the U.S. Government 
for the carrying of mail in 1948 was $147,195.44. Pre-operational 
expense was $224,831.49. Net loss for the year 1948 was $37,421.25. 
The total of these amounts or $409,448.18 is subject to government 
audit and eligible for reimbursement to the company from the 
 government under its prevailing policy, in the opinion of the Board 
of Directors. 
While, as has been stated, it is the policy of the Civil Aeronautics 
Board to reimburse an airline operating under a temporary mail rate 
for its operational losses, its eligible pre-operational expense, and 
a 7% return on the investment used in the operation, the withholding 
of these large sums from the company, until the permanent mail rate 
if established, is a severe financial handicap to the company. 
RADIO AND NAVIGATIONAL Arns: 
The company found it necessary to install its own radio communi- 
cation facilities over its entire system and navigational aids over 
that part of its routes not already so equipped. These navigational 
aids will permit the company to operate under instrument authority 
over its entire system. The cost of the navigational aids and radio 
facilities will represent an investment of approximately $100,000 
when completed for the system. It is expected that these radio 
communication facilities and navigational aids will increase per- 
formance reliability an average of 10% throughout the year. 
OUTLOOK FOR 1949: 
During the year the company served twenty-two C1t1es through 
sixteen airports. An additional twenty-two cities on routes awarded 
the company could not be served because of the lack of adequate 
airports. At least eight additional airports, however, were under con- 
struction during the year. If additional financing can be arranged to 
provide funds for more planes, station installations, and other capital 
outlays, some of these cities can be added to the system in 1949. 
The company's passenger, mail, and express revenues should be 
materially improved during 1949 with the more reliable and frequent 
service that can be provided with the navigational aids. We have 
implicit confidence in the future of Wisconsin Central Airlines based 
on our experience of the past year and our estimates of traffic and 
revenue potentials of the routes awarded us. 
CONCLUSION: 
The remarkable showing of Wisconsin Central Airlines in its first 
year of operation is a tribute to the pioneering spirit, loyalty and 
resourcefulness of the men and women in its employ. Special recog- 
ntion should also be given the members of the Board of Directors 
who unselfishly gave much of their time and effort to the organi- 
zation during the year. 
Respectfully submitted, 
~ 
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Madison, Wisconsin 
March 19, 1949 
FRANCIS M. HIGGINS 
President 
 WISCONSIN CENTRAL AIRLINES, INC. 
ASSETS 
CURRENT ASSETS 
Cash . .... . $ 36,092.83 
Accounts receivable 
U.S. Government. 
Traffic . . . . . 
Other . . ... 
. $147,195.44 
15,486.20 
Inventories-at cost 
Parts and supplies ' 
Gasoline and oil 
Prepaid insurance, interest 
and other expenses. . . 
6,030.80 168,712.44 
16,608.57 
4,358.98 20,967.55 
15,734.73 $241,507.55 
OPERATING PROPERTY AND EQUIPMENT 
Flight equipment-at cost 
(Equipment costing 
$210,705.26 pledged as 
security for notes pay- 
able-contra) . . . . 
Ground equipment- 
at cost . . . . . . . . 
Hangar and office building 
-at cost ..... . 
Furniture and fixtures- 
at cost . . . . . 
Less reserves for 
depreciation 
Radio equipment instal- 
lation in progress-at 
cost (pledged as security 
for notes payable- 
contra) . . . . . . 
DEFERRED CHARGES 
Route development 
~ expense (note 1) . 
Organization and capital 
stock expense 
Other . . .. . . . . 
274,990.41 
27,304.35 
42,329.47 
13,247.80 357,872.03 
47,273.19 
310,598.84 
48,557.53 359,156.37 
224,831.49 
65,378.39 
3,877.74 294,087.62 
$894,751.54 
Balance Sheet 
December, 31, 1948 
LIABILITIES 
CURRENT LIABILITIES 
Notes payable-unsecured 
Notes payable-installments 
due within one year 
Accounts payable . . 
Accrued liabilities 
Salaries and wages . . $ 10,711.07 
Taxes ( other than 
income taxes) . 
Other . .... 
NONCURRENT LIABILITIES 
5% notes payable, due 
$6,300.00 monthly 
January 12, 1949 to 
February 12, 1950, and 
$6,800.00 on March 12, 
1950 (secured-contra) 
Less installments due 
within one year . . 
6% notes payable, due 
$2,999.89 monthly 
(secured-contra) . 
Less installments due 
within one year . 
DEFERRED INCOME 
Unearned transportation 
revenue .. . .. . 
8,071.33 
13,232.14 
95,000.00 
75.600.00 
41,998.45 
35,998.69 
CAPITAL STOCK AND SURPLUS 
Capital stock-common; 
authorized, 300,000 
shares of $1.00 par value; 
issued, 155,000 shares . . 
Paid-in surplus-excess of 
issue price over par value 
of common stock . . . 
Earned surplus (Deficit)- 
net loss from February 
24 to December 31, 
1948 (note 2) . . . 
The accompanying notes to financial statements are an integral part of this balance sheet. 
$ 6,280.61 
111,598.69 
134,105.51 
32,014.54 $283,999.35 
19,400.00 
5,999.76 25,399.76 
2,773.68 
155,000.00 
465,000.00 
37,421.2.5 582,578.75 
$894.751.54 
 WISCONSIN CENTRAL AIRLINES, INC. 
STATEMENT OF INCOME 
FEBRUARY 24 (NOTE 2) TO DECEMBER 31, 1948 
TRANSPORTATION REVENUE 
Mail (note 2) 
Passenger .. . 
Express ... 
Excess baggage 
OPERATING EXPENSES 
Flying operations 
Flight equipment maintenance 
Ground operations . . . . . 
Ground and indirect maintenance 
Passenger service . . . . . 
Traffic and sales . . . . . 
Advertising and publicity . 
General and administrative 
Provision for depreciation 
Operating loss 
OTHER INCOME 
Incidental revenue and cash 
discounts earned 
OTHER DEDUCTIONS 
Interest . . . . . . . 
Amortization of debt expense 
Miscellaneous . 
NET LOSS ..... . 
$582,500.00 
113,648.51 
5,962.67 
1.012.27 $703,123.45 
190,630.20 
126,966.18 
201,761.50 
50,414.32 
3,294.2_ 
2 
16,749.99 
15,432.92 
94,169.39 
40.229.47 
2,118.33 
333.66 
577.36 
739,648.19 
36,524.74 
2,132.84 
34,391.90 
3,029.35 
$ 37,421.25 
The accompanying notes to financial statements are an integral part 
of this statement. 
 WISCONSIN CENTRAL AIRLINES, INC. 
Notes to Financial Statements 
December 31, 1948 
1. Route development expense in the amount of $224,831.49 con- 
sists of net costs incurred in securing and developing the route 
awarded to the company by the Civil Aeronautics Board under 
a temporary certificate of convenience and necessity authorizing 
engagement in scheduled air transportation for a period of three 
years from October 3, 1947. No provision has been made for 
amortization of this deferred charge because, in the opinion of 
the Board of Directors, based upon past rulings of the Civil 
Aeronautics Board, the current temporary mail rate will be 
changed to a permanent mail rate by the Civil Aeronautics 
Board which will include an amount sufficient to provide for 
amortization of the allowable expense plus a return on the 
investment. 
2. Net income is for the period from February 24, 1948, date of 
commencement of scheduled flight operations, to December 
31, 1948. Expenses incurred prior to February 24, 1948 were 
capitalized as Route Development Expense. Mail revenue is 
based upon a temporary mail rate order issued by the Civil 
Aeronautics Board. The Board reserves the right to increase 
or decrease this rate and such change may be made retroactive 
to February 24, 1948. 
 NEW YORK 
ALEXANDER GRANT & COMPANY 
MEMBER AMERICAN INSTITUTE OF ACCOUNTANTS 
CERTIFIED PUBLIC ACCOUNTANTS 
303 BELLIN BUILDING 
GREEN BAY, WISCONSIN 
Board of Directors 
Wisconsin Central Airlines, Inc. 
CHICAGO 
GREEN BAY 
LA CROSSE 
We have examined the balance sheet of WISCONSIN CEN- 
TRAL AIRLINES, INC. (a Wisconsin corporation) as of December 
31, 1948 and the related statement of income from February 24, 
1948 ( date of commencement of scheduled flight operations) to 
December 31, 1948. Except that it was not practical to confirm the 
accounts receivable from the U. S. Government, as to which we 
satisfied ourselves by means of other auditing procedures, our 
examination was made in accordance with generally accepted audit- 
ing standards, and accordingly included such tests of the accounting 
records, and such other auditing procedures as we considered neces- 
sary in the circumstances. 
Scheduled flight operations commenced February 24, 1948 
under a temporary certificate of public convenience and necessity 
granted by the Civil Aeronautics Board for a period of three years 
from October 3, 1947. Expenses incurred prior to February 24, 1948 
have been capitalized as Route Development Expense. No pro- 
vision has been made for amortization of this deferred charge be- 
cause, in the opinion of the Board of Directors, based upon past 
rulings of the Civil Aeronautics Board, the current temporary mail 
rate will be changed to a permanent mail rate by the Civil Aero- 
nautics Board which will include an amount sufficient to provide 
for amortization of the allowable expense plus a return on the 
investment. 
In our opinion, subject to the explanation contained in the 
preceding paragraph, the accompanying balance sheet and related 
statement of income present fairly the financial position of Wiscon- 
sin Central Airlines, Inc. at December 31, 1948, and the results of 
its operations for the period from February 24 to December 31, 
1948, in conformity with generally accepted accounting principles 
applied on a consistent bas s. 
Green Bay, Wisconsin 
h 
March 5, 1949 
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