Wisconsin Central Airlines Annual Report 1951

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WISCONSIN CENTRAL AIRLINES
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General Offices, Madison Municipal Airport, Madison, Wisconsin
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Garnet F. DeCoursin
Fred V. Gardner
Francis M. Higgins
Francis M. Higgins
H. N. Carr
Arthur E. Schwandt
Bernard Sweet
' D. G. Hendrickson
Frank N. Buttomer
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Howard A. Morey
Arthur E. A. Mueller
Donald B. Olen
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G. E. Slezak
Milo F. Snyder
A. L. Wheeler
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OFF!;CERS AND 0 Hi OlALS
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President
Executive Vice President*
Secretary-Treasurer
Asst. Treasurer
Operations Manager
General Traf fie Manager
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EPORT JO . -STOCKHOLDERS -19 5
-
1
The maj-or developments of Wisconsin Central Air-
lines during the year 1951 were the conversion to
21-passenger aircraft, the spectacular traffic record
with the larger equipment, the renewal of the air-:
line franchise and the additional routes awarded
the airline.
During the year the airline carried 96,265 rev-
enue passengers compared to 48,797 revenue pas-
sengers flown the previous year, a 97% increase.
Air mail volume increased 49% while air express
showed a 120% increase over the previous year.
Operating revenues and other income for the
year were $2,114,328 while operating expenses were
$2,108,061, leaving a net profit of $6,267. Includ-
ed in the operating expense was $143,722 for de-
preciation.
The conversion from . the six Lockheed 9-pas-
senger planes originally operated by the airline, to
six DC-3 21-passenger planes was made between
March 1st and May 1st of last year and involved a
substantial non-recurring training and q_
ualifying
expense.
FRANCHISE RENEWAL .- ROUTE EXTENSIONS
Your company operated the entire year under the
Administrative Procedures Act since our three year
temporary franchise expired in October, 1950.
Public hearings on our certificate renewal case
were held in Washington during January, 1951 and
later before the Civil Aeronautics Board. The de-
cision on the case was announced January 5, "1952.
The award included a franchise renewal of five
years to October, 1955, the addition of approximate-
ly 900 miles of new routes and "skip-stop" privi-
leges. The five-year franchise is the longest period
that the Civil Aeronautics Board has extended to a
temporary three-year franchise to date. Extensions
on renewals have ranged from approximately three
years to five years in previous decisions.
The extensions added about 65% more mileage
to the system and included a two-year franchise on
a route from Minneapolis-St.Paul to Fargo with in-
termediate stops at St. Cloud, Alexandria and Fer-
gus Falls, and a route from Minneapolis-St. Paul
to Grand Forks with stops at St. Cloud, Brainerd,
Bemidji, and Thief River Falls. Also included in -
the award was the transfer of the former Northwest
Airlines; non-stop route from Minneapolis-St. Paul
to Duluth-Superior and a seasonal route extension
from Hibbing-Chisholm to International Falls. In a
separate decision announced simultaneously with the
franchise renewal the CAB also awarded your com-
pany a route fr0m Minneapolis-St. Paul to Chicago
with intermediate stops at Eau Claire, Winona, La
Crosse, Madison .and. Beloit-Janesville. With the
additional mileage of the new routes, Wisconsin
Central now has 2295 . miles of route and is the
third largest of the eighteen local service airlines
in this country.
The "skip-stop" authorization, granted your
company, relieves the airline of making a stop at
each point served on every flight over the same
route, under certain conditions. Under the pro-
visions of the authorization, a minimum number of
flights must serve each community before the city
can be ove-r-flown on additional schedules and a
minimum number of stops is required on all flights
between certain metropolitan centers. The "skip-
stop" privilege was . the first authorization of its
kind granted .a local service airline by the Civil
Aeronautics _
Board.
Still before the Civil Aeronautics Board is your
company's application for . a route from Green Bay
to Detroit with intermediate stops at Muskegon,
Grand Rapids, and Lansing. Hearings on the ap-
plication, extending over a period of nearly three
years, have been completed. Pending a decision on
this route, the CAB withheld a decision on the re-
newal of our routes north of Green Bay into the
Upper Peninsula of Michigan and asked that we
continue our service: to this area under the Ad-
ministrative Procedures Act until a decision has
been made. The proposed route to Lower Michigan
would provide direct one-carrier service between the
upper Peninsula and Lower Peninsula of Michigan
and Green Bay as well as direct one:carrier service
from the Upper Peninsula of Michigan to Milwaukee,
Chicago and other cities.
CHANGES IN WORKING CAPITAL
During the course of the past year we had $472,601
in. available .funds consisting of $196,636 received
during the year from the sale of. common sto'ck and
certain operating equipment, plus $151,439, made up
of $6,267 in net income for the year and $145,172
set aside for depre-ciation and amortization of debt
expense plus the working capital at the beginning of
the-year of $124,526. _
. These funds, during the year, were used to
purchase $439,375 in flight and other operating
equipment; to reduce our notes payable by $53,500;
to purchase investments in airline service organiza-
tion for $1,101 and to defray certain expenditures
such as certificate renewal expense and expenses
in connection with issuance of common stock which
will benefit the company in the future and totaled
$33,014. These expenditures totaling $526,990 re-
sulted in an excess of current liabilities over current
assets at December 31, 1951 of $54,389.
MAIL COMPENSATION.
Compensation for flying United States Air Mail and
Air Parcel Post for the year was $1,181,596; a re-
duction of $273,549 from the previous year. Mail
revenues for the past year were 55% of the total
operating revenues, while in the previous year mail
:revenues were 75% of the total operating r~venues.
Passenger and express revenues more than doubled
over the previous year and thus reduced the com-
pany's dependence on mail pay, although the ton-
miles of mail flown increased approximately 50%.
A mail rate set by the CAB on February 15, based
generally on Lockheed operations did not prove
adequate and was adjusted June 14 and- further ad-
justed retroactively to June 14 this year. The tern-
3
4
porary mail rate is now at the rate of 56( per mile.
The temporary mail rates under which your
company operates are not set at a rate to provide
dividends for stockholders. Temporary mail rates
are calculated to meet only the break-even needs of
the airline. It is anticipated, however, that the op-
erating experience record of your company this
year with its enlarged operations will form the basis
for a sound, permanent mail rate which will provide
a margin of profit sufficient to build up the company's
financial position and later provide some return to
investors.
OUTLOOK FOR 1952
With the renewal of our franchise to October, 1955,
and the additional routes awarded the airline, to be
placed in service this spring and summer, the fu-
ture of Wisconsin Central Airlines appears assured.
The additional routes will provide an opportunity
of spreading fixed costs over a greater number of
miles, which should reduce the per mile operatin~
costs. The daily operation of the airline is expected
to about double before the end of the year - from
approximately 5000 miles per day to approximately
10,000 miles per day.
Service on the new non-stop route between
Minneapolis and Duluth was inaugurated with four
flights daily on February 10.
Since the first of the year the airline has leased
two 21-passenQ:er DC-3s from Trans-World Air-
lines (TWA). These two planes are now in overhaul
and modification. They are scheduled to be placed
in operation on May 1st, between Minneapolis and
Chicago, via Winona and La Crosse and other in-
termediate cities. The airline has also purchased
two DC-3s from Eastern Airlines. These planes are
also to be overhauled and modified before being
placed in operation this summer on the new routes
to Fargo and Grand Forks. Your company is also
negotiating with Eastern Airlines for two additional
DC-3s, for delivery later in _
the year. With the two
leased DC-3s and company's present eight planes,
and two probably to be acquired at a later date, the
airline will have twelve DC-3s in its fleet. '
To finance this equipment program, a loan from
an insurance company, which had been reduced
from $150,000.00 to $46,000.00, was brought back
to $150,000.00, netting the airline $104,000.00.
Approximately $250,000.00 of additional funds
will be required to complete the financing for the
equipment and operating program for this year.
Each year your airline becomes a more im-
portant factor in the economy of the communities
served. As we start our fifth year of safe operation,
it is gratifying to look back on the company's
growth from small beginnings to our present posi-
tion as one of the leading local service airlines in
this country. The routes awarded your airline ap-
pear to be sound and their potential is b'eing ex-
panded each year. Your company will continue to
develop and strengthen its position in 1952 and-in
years to come. I want to take this opportunity to
express my appreciation to all employees for the
loyalty and support they have unselfishly given to
the company during the year.
March 21, 1952
WISCONSIN CENTRAL AIRLINES, INC.
Comparative Operating and Traffic Statistics
FINANCIAL 1951
Operating Revenues
Passenger .............................................................................. $ 860,598.47
l\1ail ........................................................................................ 1,181,596.40
Express .................................................................................. 45,172.61
Excess Baggage .................................................................... 5,643.14
TOTAL .......................... $2,093,010.62
Operating Expenses
Flying Operations ................................................................ $ 591,244.85
Flight Equipment Maintenance .......................................... 275,469.03
Ground Operations .............................................................. 417,329.17
Ground and Indirect Maintenance .................................. 153.247.64
Passenger Service ................................................................ 80,588.72
Traffic and Sales .................................................................. 182,929.45
Advertising and Publicity .................................................... 65,295.07
General and Administrative ................................................ 198,235.10
Depreciation and Obsolescence : 143,722.21
TOTAL ............... $2,108,061.24
Net Operating Income ( or Loss) .................................... ($15,050.62)
Amortization of RQute Development Expense.................. -0-
Other Income or Expenses, Net .......................................... 21,317.61
Net Profit or (Loss) ............................................................ $ 6,266.99
TRAFFIC
Passengers Carried ............................................................. .
~a:r~:~r m1rll~s .. :.:~~.~ .. ::::::::::::::::::::::::::::::::::::::::::::::::::::::::
Express ton miles ................................................................. .
Scheduled Aircraft Miles flown ......................................... .
*Operations commenced February 24, 1948.
96,255
15,302,378
60,292
107,408
1,977,815
1950
$ 427,278;43
1,355,145.00
18,636.56
2,418.65
$1,803,478.64
$ 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
$ 1,642,416.07
$ 161,062.57
(65,014.65)
(3,935.17)
$ 92,112.75
48,797
7,763,742
40,555
48,095
2,050,946
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
110,2%.03 50,414.32
6,791.19 3,294.22
26,964.07 16,749.99
20,302.56 15,682.92
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
2000
1900
1800
1700
1600
1500
1400
1300
1200
1100
1000
900
800
700
600
500
400
300
200
100
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I I I I I I I I J I II I I ~l
- REVENUE PASSENGER MILES FLOWN ~~ '
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FEB APRIL JUNE AUG OCT DEC FEB APRIL JUNE AUG OCT DEC FEB APRIL JUNE AUG OCT DEC
- - - - - - 1949 _ _ _ _ _ _, , _ _ _ _ _ _ 1950 _ _ _ _ _ _ _, .... - - - - - - 1 9 5 1 - - - - - -
REVENUE PASSENGER MILES - Revenue passenger miles, standard measure-
ment of airline performance, increased 97 % in 1951. The number of passengers
increased from 3.8 to 7.7 per mile flown.
MAIL
TON MILES
7000
6000
5000
4000
3000
2000
1000
0
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MAIL TON MILES CARRIED .... J ,
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FEB APRIL JUNE AUG OCT DEC FEB APRIL JUNE AUG OCT DEC FEB APRIL JUNE AUG OCT DEC
- - - - - - 1 9 4 9 - - - - - - - - - - - - - 1 9 5 0 - - - - - - - - - - - - 1 9 5 1 - - - - - - -
MAIL TON MILES CARRIED - In 1951 your airline carried 60,292 ton miles of
air mail - a 49 % increase over the previous year.
5
6
WISCONSIN CENTRAL AIRLINES, INC.
ASSETS
CURRENT ASSETS
Cash ............................................. ...................................... ..... $ 19,354.46
Accounts receivable ............................................................. .
United States Government ................................................ $198,430.21
Traffic and other .............................................................. 127,101.69 325,531.90
Inventories of gasoline, oil,
parts and supplies - at
cost ................................................................................... .
Prepaid insurance and other
expenses ........................................................................... .
INVESTMENTS - AT COST
OPERATING PROPERTY AND EQUIPMENT
Flight equipment ( equipment
costing approximately
$196,000.00 pledged as
security for notes payable -
contra) ............................................................................. .
Ground equipment ............................................................... .
Hangar and office building ................................................. .
Furniture and fixtures ....................................................... .
Total - at cost ............................................................... .
Less depreciation to date ..................................................... .
DEFERRED CHARGES
Certificate _
renewal expense ................................................. .
Capital stock expense ......................................................... .
Other ..................................................................................... .
51,277.46
34,493.63
585,718.71
132,430.73
54,343.69
19,769.07
792,262.20
183,133.03
16,438.54
12,950.54
10,003.16
BALANCE SHEET
$430,657.45
1,101.00
609,129.17
39,392.24
$1,080,279.86
' '
DECEMBER 31, 1951
CURRENT LIABILITIES
Note payable, 5% installment
note (secured by pledge of
Hight equipment - contra)
LIABILITIES
.Accounts payable ................................................................. .
Unearned transportation revenue ....................................... .
Income taxes withheld from
employees ......................................................................... .
Accrued liabilities ................................................................. .
CAPITAL
Common stock ..................................................................... .
Authorized, 300,000 shares of
$1.00 par value; issued
208,149 shares .............................................................. $208,149.00
Paid-in in excess of par value of
stock issued, less organization
and capital stock expense written off . ...... .. ....... ...... .... 492,632.36
Earned surplus (deficit) ..................................................... .
$ 53,500.00
330,299.70
10,716.06
12,276.12
78,253.92 $485,045.80
700,781.36
105,547.30 595,234.06
$1,080,279.86
The accompanying notes to financial statements are an integral part of this balance sheet.
8
STATEMENT 0 F INCOME
YEAR ENDED DECEMBER 31, 1951
TRANSPORTATION REVENUE
Mail ......................................................................................................... .
Passenger ................................................................................................. .
Express ............. _. ....................................................................................... .
Excess baggage and other ....................................................................... .
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
and obsolescence ................................................................................... .
Operating profit ............................................................................... .
OTHER INCOME
Incidental revenue and cash
discounts earned .......................... : ...................................................... .
Gain on sale of fixed assets ................................................................... .
OTHER DEDUCTIONS
Interest ..................................................................................................... .
Amortization of debt expense ............................................... _
.................. .
Sundry ..................................................................................................... .
NET INCOME ................................................................................. .
*Denotes red figure
$1,181,596.40
860,598.47
45,172.61
5,643.14 $2,093,010.62
591,244.85
275,469.03
417,329.17
153,247.64
80,588.72
182,929.45
65,295.07
198,235.10
143,722.21
5,781.06
2.1,0:n.os
6,295.29
1,449.99
755.25 $
2,108,061.24
15,050.62*
29,818.14
14,767.52
8,500.53
6,266.99
The accompanying notes to financial statements are an integral part of this statement of income.
STATEMENT 0 F EARNED SURPLUS
YEAR ENDED DECEMBER 31, 1951
Earned surplus ( deficit) - January 1, 1951 ......................................... . $111,814.29
Net income for the year ended December 31, 1951 ................................... . $ 6,266.99
EARNED SURPLUS (DEFICIT) -
DECEMBER 31, 1951 ..................................................................... . $ 105,5--1-7.30
The accompanying notes to financial statements are an integral part of this statement of earned surplus.
NOTES TO FINANCIAL STATEMENTS
December 31, 1951
1. The company's temporary certificate of public c:onven-
ience and necessity was renewed by the Civil Aeronau-
tics Board to September 30, 1955. This was authorized
by the Board on December 13, 1951 and was a continua-
tion of the original certificate granted on October
3, 1947.
2. Mail revenues for the period from June 14, 1951 to
December 31, 1951 are stated on the basis of amended
temporary rates established by the Civil Aeronautics
Board.
3. During the year the company issued 53,149 shares of
common stock at $2.75 per share, with the proceeds
totaling $146,159.75. The amount of $1.00 per share
or $53,149.00 was assigned to the par value of common
stock, witl} the balance of s;1.75 per share or $93,010.75
being assigned to capital paid-in in excess of par value
of stock issued.
4. Commitments for purchase of flight equipment, parts
and supplies aggregated approximately $82,500.00 at
December 31, 1951.
5. 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, 1951.
NEW YORK
CHICAGO
LOS ANGELES
ALEXANDER GRANT & COMPANY
BOARD OF DIRECTORS
CERTIFIED PUBLIC ACCOUNTANTS
312 EAST WISCONSIN AVENUE
MILWAUKEE 2, 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, 1951, and the related statements of
income and earned surplus for the year then ended. With the exception that it was not
practical to confirm the accounts receivable from the United States Government or to
confirm an amount of $87,960.09 due through the Airlines Clearing House, Inc., as to
which we satisfied ourselves by other means, 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 consider necessary in
the circumstances.
In our opinion, the accompanying balance sheet and statements of income and
earned surplus present fairly the financial position of Wisconsin Central Airlines, Inc.
at December 31, 1951, and the results of its operations for the year then ended, in con-
formity with generally accepted accounting principles applied on a basis consistent with
that of the preceding year.
Milwaukee, Wisconsin
March 21, 1952
Alexander Grant & Company
9
WISCONSIN CENTRAL IS THE THIRD
LARGEST OF THE EIGHTEEN LOCAL SERVICE
AIRLINES IN THE UNITED STATES
Beautifully appointed, sound-proofed cabin in-
teriors. Comfortable, roomy lounge-chair seats.
Rest room and self-service baggage racks in
rear of plane .. Cargo holds fore and aft --:-- ca-
pacity approximately l tons. Restful color
scheme. Full view windows.
Hydraulically controlled passenger ramp closes
to form door of plane - speeds boarding -
minimum waiting time on ground.
e, O IV
"'
DC-3 pilot's cock-pit, showing dual instrument
panels - planes are equipped for all weather
night or day flying, including radar terrain
warning indicator, static-free radio communi-
cation - cruise at three miles a minute. Twin
quick-accelerating 1200 h.p. engines - main-
tain_
flight on either engine alone.
Specially built cargo hatch and compartment
speeds handling of baggage and cargo. Hatch
opening 2 ft. 7 inches x 3 ft. 10 inches to ac-
commodate bulky packages.
\
WISCONSIN CENTRAL AIRLINES
Route of the Northliners
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11
************************************************* '
CITY
Beloit, Wis.
Chicago, Ill. Wis
Chippewa Fa\ls, .
Chisholm, Mmn_-
Clintonville, Wis.
Duluth, Minn;.
Eau Claire, ~ i~-
Escanaba, Mwc
Green Bay, is.
Hancock, M~ch-
Hibbing, Mm_
n.
Hought-0n, ~heh.
Iron Mt.,
Mi~\
Ironwood, M~~
] anesville, ~ is.
Madison, Wis:
Marinette, ~~-h
Marque~te, M\ch-
Menommee, .
Milwaukee: WMinn.
Minneapolis,_
Oshkosh, Wis. .
Rhinelander: Wis.
St. Paul, ~inn.Wis.
Stevens Poin~,
Superior, ~is.
Wausau, Wis. .
Wis. Rapids, Wis.
Rock County.
City Ticket Of~i~e l
Eau Claire Mu?-1.ci~t
Hibbing M~mcip
Municipal
Williamson-_] ohnson
Municipal
Municipal
Austin Straubel
Houghton _County
Municipal
Houghton County
Ford
Gogebic County
Rock County
Municipal
M-enominee County
K. I. Sawyer
Menomine~ Cho~ty
Gen. Mite e .
Wold-Chamberlain
Winnebago County
Municipal .
PHONE
Enterprise 2000
Dearborn
tiii~
Hibbing
3-7it1
2-6633
4633
30
Howard 5450
Houghton 63
3-7847
63
2575
741
5293
4-5544
Menominee 6677
Sawyer 2
6677
Humboldt 3.5100
Parker 6691
Stanley 2
ii
Midway 2293
2510
6046
4550
Wold-Chamberlain
Municipal
Williamson] ohnson
Alexander ..
Stevens Pt. Municipal
Stevens Pt. 2510
THE MALLARD DUCK, NATIVE TO THE NORTH
CENTRAL REGION, PRIZED BY AND KNOWN
BY SPORTSMEN FOR ITS HIGH SPEED IN
SHORT FLIGHTS, FITTINGLY SERVES AS THE
INSIGNIA OF WISCONSIN CENTRAL AIRLINES.
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