Wisconsin Central Airlines Annual Report 1950

WISCONSIN CENTRAL AIRLINES
~ual rRefuYtl = ~950
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
2
WISCONSIN CENTRAL AIRLINES
General Offices, Madison Municipal Airport, Madison, Wisconsin
Garnet F. DeCoursin
Fred V. Gardner
Frnncis M. Hjggins
DIRECTORS
Howard A. Morey
Arthur E. A. Mueller
Donald B. Olen
OFFICERS AND OFFICIALS
G. E. Slezak
Milo F. Snyder
A. L. Wheeler
Francis M. Higgins -
H. N. Carr
President
Executive Vice President
Secretary-Treasurer
Asst. Treasurer
Operations Manager
General Traffic Manager
Arthur E. Schwandt -
Bernard Sweet -
D. G. Hendrickson -
Frank N. Buttomer -
REGISTRAR AND STOCK TRANSFER AGENT
Marshall & Ilsley Bank
Milwaukee, Wisconsin
* * * *
REPORT TO STOCKHOLDERS- 1950
THE operations of Wisconsin Central Airlines for
the year 1950 !Jlade steady growth and progress.
Passengers, mail and express revenues continued to
show marked increases over comparaole months of the
two previous years. Three additional cities, Escanaba,
Michigan; Janesville and Beloit, Wisconsin, were add-
ed to the system during the year.
Transportation revenues for the year reached $1,-
803,478, while operating expenses were $1,642,416,
leaving an operating income of $161,062. With other
income amounting to $2,95.3 and with other deduc-
tions for interest, amortization of route development
and debt expense, which totaled $71,902, the opera-
tions for the year showed a net income of $92,112
after providing $120,329 for depreciation.
OPERATING RESULTS
During the year, the company carried 48,797 revenue
passengers compared to 32,625 the previous year, a
net 1ncrease of 49. 5 7 per cent. Revenue passenger
miles, standard measurement for comparing airline
statistics, rose from 4,991,000 to 7,764,000 during the
year just completed, a little over 55 per cent. Mail and
express ton miles increased from 20,594 and 22,303
to 40,555 and 48,095, respectively. Passenger load
factor jumped from 36.24 per cent to 45.86_ per cent,
almost 10 points.
A number of factors contributed to your airline's
improved position during the year under review. For
one thing, 1950_ was the first complete year that the
company operated with full instrument authority over
its entire system, thereby making possible day and
night "all weather" operation. This meant greater re-
liability of service and a correspondingly higher de-
gree of public confidence in our operation. Improved
performance factors and more dependable schedules
brought closer cooperation and more business from
other airlines with whom we exchange connecting
passengers. Finally, the contribution of your airline's
employees should not be overlooked. Wisconsin Cen-
tral' s personnel have grown more experienced and
have developed a strong spirit of teamwork and a very
high morale.
CERTIFICATE RENEWAL
Orie of the foremost problems of your management in
1950 was the preparation of its certificate renewal
case. You are familiar with the fact that Wisconsin
Central operates on a temporary 3-year certificate of
convenience and necessity, the renewal of the certifi-
cate depending upon the successful operation of the
airline and the service it tenders the public. As a part
of its presentation, in May the airline started a con-
tinuing study of "unabled" passengers, or passengers
that could not be carried due to lack of space or weight
restrictions. Data developed over a six month period
revealed the fact that Wisconsin Central was unable
to accommodate about half as many passengers as it
carried and refused 45% of the air express offered.
This significant fact was one of the considerations
which 1nfluenced your Board of Directors in changing
over to DC-3 equipment.
Public hearing on our certificate renewal case was
held in Washington the week of January 22, 1951.
Most gratifying to your officers and directors was the
support of our cities. More than thirty-five cities and
civic organizations on our route as well as the states
of Wisconsin, Minnesota, and Illinois prepared briefs
and presented witnesses and testimony in support of
continued service. While a decision will not be issued
by the Civil Aeronautics Board for several months,
your management is most optimistic over the develop-
ments of the case and is hopeful of receiving a mini-
mum certificate renewal for 3 years and possibly for a
5-year period.
As a part of the recertification case, the airlin~ sug-
gested minor changes in route structure which appear
to offer certain advantages to the traveling public and
would result in greater efficiency in the operations of
our routes.
Other modifications presently before the Civil Aero-
nautics Board pending action are an extension from
Green Bay, Wisconsin, to Detroit, Michigan, and an
additional route between Chicago and Minneapolis-
St. Paul serving Beloit-Janesville, .Madison, La Crosse,
Wisconsin, and Winona and Rochester, Minnesota.
PERMANENT MAIL COMPENSATION
Another matter of vital importance to your company
was the final determination of a permanent rate of
compensation for the transportation of mail. You will
recall that we have received temporary mail compensa-
tion since the operation started, the final rate to be set
after the carrier gained additional operating experi-
ence. This final rate was set by the Board on February
15, 19 51. The decision provided for additional retro-
active payment for past operation and set a rate of re-
muneration for the future period. A revised profit and
loss statement showing these retroactive adjustments
and the charging-off of route development expen_
se
are included in this report.
3
4
FINANClNG OUTLOOK FOR 1951
During the first six months of the year, the company
retired the balance of its loans of $77,047 and im-
proved its cash position from earnings. In October,
your company committed itself for a $450,000 equip-
ment conversion program, whereby its six 9-passenger
Lockheeds will be replaced by six 21-passenger Doug-
las DC-3 aircraft. To assist in financing the program,
a $150,000 mortgage was made with an insurance
company. Sale of the Lockheed equipment, the settle-
ment of your company's permanent mail rate, together
with anticipated earnings, should provide sufficient
funds to complete the project.
Three of the DC-3 aircraft. were placed in sched-
uled operation March 1 and complete conversion to
the larger equipment is scheduled for May 1. We be-
lieve that your company will then have the finest local
service airline equipment in the country. We were ex-
tremely fortunate in acquiring the equipment at a
price which could not be duplicated in today's market,
due to the present national emergency.
Your management and Board of Directors are con-
vinced that the company, with its new equipment, will
make an outstanding record in 19 51. Employees of
Wisconsin Central, through their courtesy and effi-
ciency, have acquired an enviable reputation in the
airline industry and the respect of the traveling public.
The airline service we provide has become an integral
part in the economic life of many of the cities served.
Public officials and businessmen in these cities take
personal pride in the success of the operation and the
communities have supported the service by investing
more than $8,000,000 in airports. Your management
is grateful for this fine public interest, for the loyalty
and esprit de corps of its employees, and for the sup-
port of the stockholders, which has served as an in-
spiration to your directors and officers.
Respectfully submitted,
~'-- a;:;..,t(;,~
Madison, Wisconsin
March 13, 1951
WISCONSIN CENTRAL AIRLINES,
Comparative Operating and Traffic Statistics
FINANCIAL 1950
Operating Revenues
Passenger ..................................................................................................................................................... $ 427,278.43
Mail. ............................................................................................................................................................ 1,355,145.00
Express......................................................................................................................................................... 18,636. 56
Excess Baggage.......................................................................................................................................... 2,418.65
TOTAL. ............................................................................................................................................................. $1,803,478.64
Operating Expenses
Flying Operations ...................................................................................................................................... $ 459,643.25
Flight Equipment Maintenance............................................................................................................... 267,105.13
Ground Operations................................................................................................................................... 418,593.97
Ground and Indirect Maintenance......................................................................................................... 133,142.06
Passenger Service....................................................................................................................................... 14,160.56
Traffic and Sales........................................................................................................................................ 38,138.56
Advertising and Publicity......................................................................................................................... 30,069.09
General and Administrative..................................................................................................................... 161,234.03
Depreciation and Obsolescence............................................................................................................... 120,329.42
TOTAL .............................................................................................................................................................. $1,642,416.07
Net Operating Income or (Loss) ........................................................................................................... $
Amortization of Route Development Expense ..................................................................................... ..
Other Expenses, Net ................................................................................................................................ .
Net Profit or (Loss) ................................................................................................................................. $
TRAFFIC
Passengers Carried .................................................................................................................................... .
Passenger miles flown .............................................................................................................................. .
Mail ton miles .......................................................................................................................................... .
Express ton miles ...................................................................................................................................... .
Scheduled Aircraft Miles flown .............................................................................................................. .
Operations Commenced February 24, 1948.
161,062.57
(65,014.65)
(3,935 .17)
92,112 .75
48,797
7,763,742
40,555
48,095
2,050,946
FRANCIS M. HIGGINS
President
INC.
1949 1948
$ 271,575.86 $113,648.51
1,036,243.00 580,968.00
8,363.95 5,962.67
1,519.04 1,012.27
$1,317,701.85 $701,591.45
$ 350,180.45 $190,630.20
229,945.55 127,966.18
321,057.28 201,761.50
110,236.03 50,414.32
6,791.19 3,294.22
26,964.07 16,749.99
20,302.56 15,68-2.92
138,423.88 94,069 .39
99,598.50 54,645.15
$1,303,499.51 $755,213.87
$ 14,202 .34 ($53,622.42)
(86,291.77) (73, 525.07)
(3,793.61) (896.51)
($75,883.04) ($128,044.00)
32,625 11,398
4,991,339 1,952,591
20,594 11,520
22,303 13,908
1,633,936 798,014
THOUSANDS I I I I I I I I II I I l I I v-\
800
REVENUE PASSENGER MILES FLOWN ..t--
7 ,~
\
700
I I\ j ' '"
600
I ' i~, ".
500 ,V ,
~
\ I
400
~~
I ' l/'
300 ~
""-,..
j
I/ ~\
~1
200
~,. ' I/ ' ~
"
~
100 ~
..
0
MAR MAY JULY SEPT NOY JAN MAR MAY JULY SEPT NOY JAN MAR MAY JULY
APRIL JUNE AUG OCT DEC FEB APRIL JUNE AUG OCT DEC FEB APRIL JUNE
SEPT NOY
MAIL
' TON MILES
5000
4000
3000
2IIOO
1000
0
V
AUG OCT DEC
1948 ------1949-------'"--------1950---------
REVENUE PASSENGER MILES Revenue passenger miles, standard measure-
ment of airline performance increased 55 % in 1950. Load factor jumped from
36% to 46%.
I I I I I I I
II I I
MAIL TON MILES CARRIED
V
, . V '
I
V ~[1
V ~
~
.J"'- ~
V
...._
___ ,i,
V ......... J V ~ ,,
I/ ~ \ ~
-L---'
/
- ...__ ,Jill' " ,
--
...i~
I/
t---.. V
...
MAR MAY JULY SEPT NOY JAN MAR MAY JULY SEPT NOY JAN MAR MAY JULY SEPT NOY
APRIL JUNE AUG OCT DEC FEB APRIL JUNE AUG OCT DEC FEB APRIL JUNE AUG OCT DEC
'-------1948----- ------1949 - - - - - - - -- 1950--------
MAIL TON MILES CARRIED - In 1950 your airline carried more than twice the
volume of air mail compared to the previous year.
5
ASSETS
CURRENT ASSETS
Cash .................................................................................................................................... .
Accounts receivable
United States Government... ........................................................................ .
Traffic. ........................................................................................................................... .
Other ............................................................................................................................. .
Inventories - at cost
Parts and supplies ................................................................................................ .
Gasoline and oiL ............................................................................................... ..
Prepaid insurance arid other expenses ................................................ .
OPERATING PROPERTY AND EQUIPMENT
Flight equipment ( equipment costing $180,603.26 pledged
as security for notes payable - contra) ............................................ ..
Ground equipment ............................................................................................... .
Hangar and office building .............................................................................. .
Fi.l!niture and fixtures ............................................................................................ ..
Less reserves for depreciation and obsolescence ................................ .
Coristruction work in progress
Flight equipment (pledged as security for notes payable
- contra) .. -
...................... .-........................ : .......................................................... .
Ground equipment.. ........................... .
DEFERRED CHARGES
Certificate renewal expense ................................................................................ .
Unamortized discount and expense on debt... ...................................... .
Other ........... .
6
WISCONSIN CENTRAL
$213,743.67
73,960.91
15,161.97
39,630.16
5,415.88
103,255.77
$106,808.21
302,866.55
45,046.04
19,194.30
350,923.64
117,916.84
42,620.18
16,080.12
527,540.78
269,011.29
258,529.49
BALANCE SHEET
$473,915.10
2,167.04 105,422.81 363,952.30
3,842.91
2,175.01
1,810.57 7,828.49
$845,695.89
A
.IRLINES, INC.
DECEMBER 31, 1950
CURRENT LIABILITIES
Current maturities of 5 % note payable.
Accounts payable ....................... .
Income taxes withheld from employees ....
Accrued liabilities
LIABILITIES
Salaries and wages ........................................................................................... ..
Taxes ( other than income taxes) ............................................................ .
Other ............................................................................................................................. .
NONCURRENT LIABILITY
5% note payable in monthly installments to June 1952 (se-
cured by the pledge of flight equipment - contra) ................ .
Less current maturities ........................................................................................... .
DEFERRED INCOME
Unearned transportation revenue .................................................................. .
CAP IT AL STOCK AND SURPLUS
Capital stock-common; authorized, 300,000 shares of $1.00
par value; issued, 155,000 shares ......................................................... .
Surplus
Paid-in surplus ( excess of issue price of common stock
over par value, less organization and capital stock ex-
pense written off) ...................................................................... .
Earned surplus (deficit) ........................................................................... .
$ 24,942.14
5,485.11
10,990.67
399,621.61
$ 96,500.00
196,420.96
10,543.01
41,417.92 $344,881.89
150,000.00
96,500.00
155,000.00
53,500.00
4,506.68
111,814.29 287,807.32 442,807.32
$845,695.89
The accompanying notes to financial statements are an integral part of this balance sheet.
7
8
STATEMENT 0 F INCOME
YEAR ENDED DECEMBER 31, 1950
TRANSPORTATION REVENUE
Mail. .................................................................................................................................................................. .
Passenger ....................................................................................................................................................... .
Express ............................................................................................................................................................. .
Excess baggage .......................................................................................................................................... .
OPERA TING 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 and obsolescence .................................................................... .
Operating profit. ....................................................................................................... .
OTHER INCOME
Incidental revenue and cash discounts earned .................................................................. .
OTHER DEDUCTIONS
Interest ............................................................................................................................................................ .
Amortization of debt expense ....................................................................................................... .
Amortization of route development expense .................................................................... .
Unclassified ................................................................................................................................................. ..
Net income .................................................................................................................... .
SPECIAL ITEMS
W r.ite-off of def e~red rout~ de:elopment expense ........................................................ .
Adjustment of pnor years mail revenue .............................................................................. .
$1,355,145.00
427,278.43
18,636.56
2,418.65
459,643.25
267,105.13
418,593.97
133,142.06
14,160.56
38,138.56
30,069.09
161,234.03
120,329.42
3,186.27
827.43
65,014.65
2,874.63
159,816.84
72,644.81
232,461.65
$1,803,478.64
1,642,416.07
161,062.57
2,953.16
164,015.73
71,902.98
92,112.75
Less reduction of prior years' depreciation ......................................................................... . 21,598.83 210,862.82
EXCESS OF SPECIAL ITEMS OVER NET INCOME. ......... . $ 118,750.07
The accompanying notes to financial statements are an integral part of this statement of income.
STATEMENT 0 F SURPLUS ACCOUNTS
YEAR ENDED DECEMBER 31, 1950
PAID IN SURPLUS
Paid-in surplus - January 1, 1950 (excess of issue price of common stock over par value) ....... . $465,000.00
65,378.39
Organization and capital stock expense written off. ...................................................................................................... .
PAID-IN SURPLUS -DECEMBER 31, 1950 ......................................................................... . $399,621.61
EARNED SURPLUS
Earned surplus - January 1, 1950 ........................................................................................................................................... . $ 6,935.78
118,750.07
Excess of special items over net income for the year ended December 31, 1950 ..................................... .
EARNED SURPLUS (DEFICIT) - DECEMBER 31, 1950 ....................................... .. $111,814.29
The accompanying notes lo financial statements are an integral part of this statement of surplus accounts.
NOTES TO FINANCIAL STATEMENTS
December 31, 1950
1. The company has operated scheduled flights since February 24,
1948 under a temporary certificate of public convenience and
necessity granted by the Civil Aeronautics Board, which cer-
tificate expired October 3, 1950. The Civil Aeronautics Board
is reviewing the company's application for extension or renewal
of its certificate of public convenience and necessity, but has
issued no decision to date.
The Civil Aeronautics Board has issued an order fixing and
determining the fair and reasonable final rates of compensation
for the carriage of mai l for the period from February 24, 1948
to September 30, 1950. The attached stateme,nts give effect to
the adj ustments caused by this final determination. Mail com-
pensation has been allocated to the various years included in
the certificate of public convenience and necessity on the basis
of the recognized plane miles flown in scheduled service during
each year, route development expense has been amortized over
the 31 month period from February 24, 1948 to September
30, 1950 and depreciation has been adjusted to co,iform with
the determination of the Civil Aeronautics Board. The Board
has also determined the effective rate of mail compensation for
operations subsequent to September 30, 1950.
2. The company has made commitments to purchase three ad-
ditional D ouglas DC-3 aircrafts, the cost of which will amount
to approximately $160,000.00 when ready for scheduled flight
operations.
3. As a result of "carry-over" of prior years' net operating losses,
no income taxes are payable on the net income for the year
ended December 31, 1950.
NEW YORK
CHICAGO
LOS ANGELES
Board of Directors
ALEXANDER GRANT & COMPANY
CERTIFIED PUBLIC ACCOUNTANTS
/
BELLIN BUILDING
GREEN BAY, WISCONSIN
Wisconsin Central Airlines, Inc.
OTHER
PRINCIPAL
CITIES
We have examined the balance sheet of WISCONSIN CENTRAL AIRLINES,
INC. ( a Wisconsin corporation) as of December 31, 1950, and the related statements of
income and surplus accounts for the year then ended. With the exception that it was not
practical to confirm the accounts r~ceivable from the United States Government, as to which
we satisfied ourselves by other means, our examination was made in accordance with gener-
ally accepted auditing standards, and accordingly included such tests of the accounting rec-
ords 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 accounts present fairly the financial position of Wisconsin Central Airlines, Inc. at
December 31, 19 50, and the results of its operations for the year then ended, in conformity
with generally accepted accounting principles applied on a basis consistent with that of the
preceding year.
ALEXANDER GRANT & COMPANY
Green Bay, Wisconsin
February 10, 1951
9
10
NOW
WISCONSIN CENTRAL AIRLINES
DE LUXE DC-3 AIRLINERS
/!Jlte fowd ~ in local~ aiuine ~
Wisconsin Central's Douglas DC-3 planes combine depend-
ability, speed, luxury - modern airliners in every detail.
Twin 1200 hp. engines for smooth cruise flying. These
ships are specially adapted to local service or "short-haul"
traffic. Planes are equipped for all weather night or day
flying, including radar terrain warning indicator, static-
free radio communication - cruise at three miles a minute . .
Beautifully appointed, sound-proofed cabin interiors.
Comfortable, roomy lounge-chair seats. Rest room and
self-service baggage racks in rear of plane. Cargo holds
fore and aft - capacity approximately 1 tons.
e, 0 IV
"'
At 3-miles-a-minute speed, Wisconsin Central's DC-3's
fly local schedules on maintained time. Built-in passenger
ramp saves time loading and unloading - minimum wait-
ing time on ground. Specially built cargo hatch and com-
partment speeds handling of baggage and cargo. Hatch
opening 2 ft. 7 inches x 3 ft. 10 inches to accommodate
bulky packages.
Wisconsin Central's DC-3's now provide de luxe air travel
between 30 cities of Wisconsin, Illin~is, Upper Michigan
and Minnesota - with convenient connections with 15
major airlines - national and international.
The Company will again be eligible for the National Safety Council's 1950 Aviation Safety Award,
having flown 7,764,000 passenger miles during the past year without a passenger or crew fatality.
11
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
YOU -YOUR FAMILY AND FRIENDS
ARE INVITED TO TRAVEt "WISCONSIN CENTRAL"
For flight schedules, reservations, and complete information, phone the Wisconsin Central office
in any of these cities. We make reservations on all scheduled airlines as a courtesy service:
CITY AIRPORT PHONE
Beloit, Wis .................................................................. Rock County ............................................................... Enterprise 2000
Brainerd, Minn ............................................................ Brainerd.Crow Wing .................................................. 5 5 31
Chicago, Ill ................................................................. .Midway ........................................................................ Portsmouth 7-8800
Chicago, l11 ................................................................. City Ticket Office ....................................................... Dearborn 22060
~~!r:i~ ti~~. ~.i.~ :::::::::: ::::: ::: : :~::::: :::::: ::: ::::::::
:::::::t~ bb?~trt ~r~:!e.1
..~~
~~ ~~~~~~~~ ~ ~~~~~~~~ ~~~ ~ ~ ~~ ~~ ~ ~ ~~ ~.~~~ ~~~~~ ~~ ~~ t~~;g 12 5 0-w
Clintonville, Wis ........................................................ Municipal. ........................................... : ....................... 210
Duluth, Minn .............................................................. Williamson-Johnson ................................................... 2 7854
Eau Claire, Wis ............................................. : ............ Municipal .................................................................... 4633
Escanaba, Mich ........................................................... Municipal .................................................................... 30
Green Bay, Wis ................................................... -...... Austin Straube!... ........................................................ Howard 5450
Hancock, Mich ............................................................ Houghton County ....................................................... Houghton 63
Hibbing, Minn ............................................................ Municipal. ................................................................... 1250-W
Houghton, Mich ......................................................... .Houghton County ....................................................... 63
Iron Mt., Mich ............................................................ Ford ............................................................................. 2575
Ironwood, Mich .......................................................... Gogebic County ........................................................... 741
Janesville, Wis ............................................................ Rock County ............................................................... 5293
Madison, Wis .............................................................. Municipal ..................................................................... 4.5544
Marinette, Wis ........................................................... Menominee County .................................................... Menominee 6677
Marquette, Mich .......................................................... K. I. Sawyer ............................................................... Sawyer 2
Menominee, Mich ....................................................... Menominee County .................................................... 6677
Milwaukee, Wis .......................................................... Gen. Mitchell. ............................................................. Humboldt 3-5100
~;~c~:(0
~is~~~~:::::::::::::::::::::::::::::::::::::::::::::::::::::.~?~~~~~::~i~a~~y:::::::::::::::::::::::::::::::::::::::::::::::::::::
r:::t:y ~
691
Rhinelander, Wis ........................................................ Municipal. ................................................... ................ 98
St. Paul, Minn ............................................................ Wold-Chamberlain ...................................................... Midway 2293
Stevens Point, Wis ...................................................... Municipal. ................................................................... 2510
Superior, \Vis ............................................................. WilliamsonJohnson .................................................... Duluth 2-7854
Wausau, Wis .............................................................. Alexander .................................................................... 4550
Wis. Rapids, Wis ....................................................... Stevens Pt. MunicipaL ............................................... Stevens Pt. 2510
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *