North Central Airlines Annual Report 1954

GENERAL OFFICES: 6201 Thirty-Fourth Avenue South, Wold-Chamberlain Field,
Minneapolis 23, Minnesota
H. N. CARR*
WERNER L. CHRISTENSEN
ARTHUR E. A. MUELLER
H. N. CARR . . .
FRANK N. BOTTOMER
ARTHUR E. SCHWANDT
BERNARD SWEET
ALVIN D. NIEMEYER
R. H. BENDIO, SR. .
GARNET F. DECOURSIN*
ROBERT F. GROVER
ARTHUR E. A. MUELLER*
A. L. WHEELER
K. B. WILLETT
* Executive Committee
. . . . . Chairman of the Board
President and General Manager
Vice-President, Traffic and Sales
Vice-President, Industrial Relations
Secretary-Treasurer
Operations Manager
Director of Maintenance and Engineering
MARSHALL & ILSLEY BANK MILWAUKEE, WISCONSIN
Dramatic achievements in all cat~gories of opera-
tions, traffic, and finance during 1954 elevated North
Central Airlines to a new position of leadership in the
local service airline industry.
Most Profitable Year
Substantial increases in schedules, outstanding im-
provements in flight performance, a high level of
over-all company efficiency and all-time records in
passenger, air mail, and air express traffic brought
North Central the most profitable year in its history
and a reputation as one of the lowest-cost, highest-
profit operations in the industry. The profits of 1954
together with a series of improvements in financing
during the year have brought your company to the
position of one of the most financially stable of the
nation's 13 local airlines.
In the fall of 1954 North Central attained first place
among the local airlines in number of passengers
carried and continued second in air mail volume. The
company also continued to lead the industry by a wide
margin in air express tonnage as it has in the past
three years.
Revenues and Expenses
Your company realized a record net profit of $111,707
in 1954 as compared to a net loss of $114,588 in 1953.
The 1954 profit was after depreciation charges of
$535,557 and was achieved despite a reduction of
$139,764 in mail revenues. This profit reduced the
company's net deficit from $320,513 at the beginning
of the year to $208,806.
Non-mail revenues increased sharply, from $2,413,030
in 1953 to $3,495,123 in 1954. This is a gain of 45%.
These revenues were: passenger $3,351,782 (up 45%),
air express $75,630 (up 11%), charter service $46,734
(up 84%), and excess baggage $20,975 (up 33%). Mail
revenues were $2,328,921, and revenue from all these
sources totaled $5,824,042.
Operating expenses were $5,657,261, resulting in a
record operating profit of $166,781. Non-operating
expenses were $55,074 which, deducted from the
operating profit, leaves the net profit of $111,707.
Earnings per share of stock outstanding amounted to
$2.16 before depreciation and $.37 per share after
depreciation.
The large depreciation charge of $535,557 results
primarily from the industry practice of depreciating
aircraft over a period of only three years. By the end
of 1956 all of your company's 18 DC-3s will be fully
depreciated.
New Management
On April 7, 1954, H. N . Carr, a Director and former
Executive Vice President, assumed the presidency,
succeeding Howard A. Morey who resigned as Presi-
dent and Member of the Board of Directors. This
Board vacancy and another created by the resignation
of Harold H . Emch were filled by the elections of
Robert F. Grover and Kenneth B. Willett at the annual
stockholders' meeting on April 7. .
The Board was reduced to seven members in De-
cember by the resignations of R. B. Stewart and Grove
Webster of the Purdue Research Foundation in accord-
ance with terms of the Foundation's agreement with
the company. The agreement stipulated that when the
company's loan was liquidated, as it was on December
10, the Foundation would relinquish membership on
the Board.
After becoming president, Mr. Carr instituted a
series of changes in the company's administrative
organization. Among these was the promotion of
Bernard Sweet from Acting Treasurer to Secretary-
Treasurer. Alvin D . Niemeyer, former Civil Aeronau-
tics Administration official, was named Operations
Manager upon the resignation- of Capt. Robert J.
Ceronsky who returned to flying for the company.
Arthur E. Schwandt, formerly Vice President-Secretary
of the company, was appointed Vice President-Indus-
trial Relations.
Financial Recovery
Having concluded the year 1953 with a net loss of
$114,588 and continuing to operate at losses averaging
$57,000 monthly in January, February, March, and
April of 1954, new management developed a program
to reduce costs drastically, improve over-all efficiency,
increase passenger business, and strengthen the com-
pany's financial condition.
Additional flights were scheduled to increase equip-
ment and personnel utilization and to meet growing
demands for more and better service. These additional
miles were flown with no appreciable increase in over-
head and lowered plane-mile costs from an average of
$1.24 in the first four months of the year to an average
of $1.02 in the remaining eight months. Passenger
revenues on the new flights more than offset the limit-
ed cost of the additional mileage.
A high level of efficiency was achieved through im-
proved operating techniques and acquisition of new
maintenance and ground equipment. Consolidation of
the company's general offices and operations base at a
single location at Wold-Chamberlain Field, Minne-
apolis-St. Paul, was also an important step in achieving
an effective operation.
Improved Financial Position
While a profitable operation was the primary factor,
two major steps in financing contributed substantially
to North Central's improved financial position. Dur-
ing the summer the company issued $215,000 of 10-
year, 6% convertible debentures, due July 31, 1964.
These debentures are convertible into shares of com-
mon stock of the company until maturity unless called
for previous redemption (see note No. 4 to .financial
statement).
In December the $600,000 balance then outstand-
ing on a $1,000,000 loan from the Purdue Research
Foundation was re.financed by a loan from the North-
western National Bank of Minneapolis. This re.financ-
ing lowered the interest rate to 4%, reduced the
amount of monthly installments and extended the
period of the loan to December 10, 1957. This loan is
secured by a mortgage on the company's flight equip-
ment (see note No. 5 to .financial statement).
As a result of the year's pro.fits and favorable .financ-
ing, your company was able to reduce its 1953 net
working capital deficit of $627,763 to only $14,735
which, for practical purposes, is a one-to-one ratio.
This is the most favorable net working capital position
ever achieved by the company.
The reduction in net working capital deficit is re-
.fleeted primarily in an increase of cash from $74,544
at the beginning of 1954 to $258,870 at the close of
the year, and in a reduction of trade accounts payable
from $606,046 at the beginning of 1954 to $244,966
at the close of the year. All of the company's accounts
payable were made completely current by September
30, 1954 and have been maintained on a current basis
since that date.
During the year conferences were held with the
Mail Rate Section of the Civil Aeronautics Board on
the company's permanent mail rate case. On Decem-
ber 10, the Board established a .final rate through June
30, 1954 and also established a sliding scale formula
for the period beginning July 1, 1954. The rate on this
formula varies with the company's passenger load
factor. It is one of the lowest mail rates in the local
service industry, evidencing the company's improved
.financial position.
Declining Per Cent of Air Mail Revenue
83% 79
% to Total Revenue
75%
56%
52% 51%
40%
I
1948 1949 1950 1951 1952 1953 1954
New Services
During 1954 North Central Airlines provided 21%
more service for the traveling public than was offered
in 1953. Flights were added on nearly every segment
of the company's system. The most notable increase
was between Chicago and Milwaukee where fre-
quency reached 44 flights daily. Scheduled route miles
.flown during the year totaled '5,174,209 compare<l co
4,261,743 the previous year.
Seasonal service through September jO was re-
inaugurated May 15 at Land O'Lakes, Wisconsin,
following a three-year suspension for lack of aJequate
airport facilities. This city will be served again this
summer. Seasonal service was resumed June 1 at Inter-
national Falls, Minnesota, and continued last fall when
the Civil Aeronautics Board granted North Central
authority to operate there on a year-round basis.
On February 28, 1955, the Board awarded North
Central the local service route between Chicago and
Detroit via intermediate cities South Bend, Indiana,
and Kalamazoo, Battle Creek, Jackson, and Ann
Arbor, Michigan, with Ann Arbor to be served through
Willow Run Airport, Detroit. This is considered one
of the most lucrative routes awarded a local service
airline in recent years. Tentative date for inaugurating
service is May 1, 1955, with an initial schedule pattern
providing six .flights daily to each city.
Improved Flight Performance
Outstanding gains in flight performance were at-
tained in 1954 as a result of a sharp rise in operations
and maintenance efficiency. Flights delayed for me-
chanical reasons were reduced 29% during the year,
and .flights cancelled for mechanical reasons were
reduced 66%. Flight completion performance increased
from 94% in 1953 to 97% in 1954, and on-time per-
formance rose from 63% to 75% in 1954. This improve-
ment in performance was an important factor in
establishing new records in all categories of traffic.
New Passenger Service
New management introduced a number of measures
to provide better service for North Central's customers
and earn a fuller measure of public goodwill. A con-
tinuing courtesy campaign was begun among the
company's reservations, station, and flight personnel.
Additional in-flight passenger services were provided,
and new procedures to increase efficiency in reserva-
tions and baggage-handling were instituted.
A program to change from flight stewards to stew-
ardesses was started in May, and thus far 50 attractive
stewardesses have replaced male cabin attendants. The
stewards have been promoted in the company or have
resigned to accept positions elsewhere. Your com-
pany considers this a major step forward in its contin-
uing efforts to improve service, and passenger response
has been excellent.
Aircraft Modernization
To further increase service, each of North Central's
aircraft is being converted from 21 seats to 26, in an
equipment modernization program started in Septem-
ber. The new seats are the finest available and offer
greater passenger comfort because of their foam rub-
ber construction and scientific design. The program
also includes remodeling of cabin interiors in an at-
tractive tan-green color scheme and installation of
convenient carry-on luggage racks.
The increase in seating capacity also enables the
company to realize more passenger revenue per flight
with little increase in operating costs. Modernization
of the entire fleet will be completed before the end
of the year.
Traffic Gains
Your airline carried 30% more passengers in 1954
than in 1953. A total of 283,556 persons flew North
Central in 1954, compared to 217,663 in the previous
year. A new daily record was set on June 19 when
1,212 passengers were carried, and a new monthly
record was established in August with 31,271 pas-
sengers.
While scheduled miles flown increased 21%, pas-
senger-miles rose 26% to 47,456,757 in 1954. System
1948
1949
.__..=.;;;__. 1950
1951
._...,....__. 1952
-... ........ __, 1953
...,;..__,__. 1954
798,014
1,633,936
2,050,946
1,977,815
load faG:tor (percentage of occupied seats) for the year
increased from 41.9% to 43.4%. .
An increase of 20% was attained in air express ton-
nage with 194,722 ton-miles in 1954 compared to
161,963 in 1953. Air mail showed an increase of 12%
with 121,058 ton-miles compared to 108,418 the pre-
. vious year. North Central carried 54,081 ton-miles of
first-class and other preferential surface mail during
the year over selected routes in the Post Office De-
partment's experiment of expediting the movement of
these classes of mail. The experiment was first con-
ducted system-wide during the 1953 holiday season
and resumed on two routes in March, 1954.
North Central increased its charter business by 84%
in 1954. Fifty charter trips were flown for a total of
40,641 miles. This compares to 22 charters flying an
aggregate of 16,866 miles in the previous year. The
increase was accomplished through a more vigorous
charter sales program offering incentives to employees
and by adjusting rates to make them competitive with
the industry.
Route Development
North Central Airlines has a number of route exten-
sion proposals pending before the Civil Aeronautics
Board. The first of these is an application for approval
of the company's contract to purchase 96% of the
outstanding stock of Lake Central Airlines, a local
carrier whose routes are shown on the accompanying
system map. Lake Central presently operates over some
1,600 route miles in the "industrial heart of the na-
tion". Acquisition of Lake Central would extend your
company's routes as far east as Pittsburgh and as far
south as Cincinnati, and would add 24 cities with a
combined population in excess of 4,000,000 to the
North Central system.
A second application seeks continuation of the
comp~ny's present route between Minneapolis-St.
Paul and Grand Forks, North Dakota, via Brainerd,
Bemidji, and Thief River Falls, Minnesota. In a Civil
Aeronautics Board investigation of this route a:nd
another operated by North Central between Minne-
apolis-St. Paul and Fargo via three intermediate stops,
the Board concluded that public convenience and
necessity did not require continuation of either route.
' Service was terminated November 1 on the Fargo seg-
ment, but North Central continues to operate to
Grand Forks pending final decision by the Board on
the .company's application.
A request for authority to operate into Detroit City
Airport was filec;l early this year. This operation would
provide service between Detroit City Airport and
Willow Run, the airport now used by all scheduled
airlines serving Detroit.
Applications have also been filed requesting authority
to conduct helicopter operations in the metropolitan
areas of Chicago-Milwaukee, Detroit and Minneapolis-
2,859,158
4,261,743
5,174,209
~t. Paul._ There are no immediate plans for inaugurat-
ing service; however, this early planning will place
your company in a position to receive full considera-
tion when the Civil Aeronautics Board awards heli-
copter certificates in these areas.
Permanent C~rtification
North Central Airlines has joined the local service
industry in efforts to achieve permanent certification.
All l?~al carri_
ers. operate under tern porary certificates
requmng penod1c renewal by the Civil Aeronautics
Board. North Central's present certificate is due for
renewal in September, 1955.
A bill directing the Board to grant permanent status
to all l_ocal lines was introduced in the 1954 Congress.
The 6111 passed the House of Representatives unani-
mously but failed to be considered by the Senate
because of the press of last-minute legislation. A sim-
ilar bill has been introduced in this session of Con-
gress, and favora~le action is anticipated.
Personnel
North Central's dramatic improvements in all phases
of operations and impressive gains in traffic volume
during 1954 are attributable primarily to the high
efficiency of the company's 650 employees. Their val-
uable suggestions and vigorous efforts have been the
mos~ significant factors ~n cutting costs, improving
efficiency and strengthening North Central' s financial
position.
Management t_
akes this opportunity to express its
sincere appreciation to all employees throughout the
system for the contributions they have made to the
progress and development of the company during
1954.
Forecast
In January and February of 1955 the traffic volume
was 42% ahead of the same period la.st year. It is antici-
pated that traffic will continue to gain throughout the
year and that approximately 375,000 passengers will
fly on North Central in 1955.
In January the company realized a net profit of
$5,734, the airline's first January profit in its history.
Although a modest profit, it becomes impressive when
compared to the heavy losses incurred in January a
year ago. North Central's profitable 1954-1955 winter
in1icates a tre~d towar? a _
year-round self-sufficiency.
With traffic gains continumg and operations remain-
ing at a profitable level you can look forward to your
company establishing in 1955 further records for the
~;:;y~:tw~
ARTHUR E. A. MUELLER H. N. CARR
Chairman of the Board President
March 18, 1955
~- *
--------------------------------------;-------,.1
11,398
11,520
13,908
32,625
1864"> Gal
20,594
794"> Gain
22,303
604"> Gain
48,797
504">
40,555
97%
48,095
1164">
*Operations commenced February 24, 1948
96,265
97%
60,292
49%
107,408
1234">
153,047
59'61
94,696
57%
138,341
29%
217,663
42%
161,963
17'61
N. D.
S. D.
ILL.
LAKE HURON
MICH.
"'
------ --~
- ~
=-=~~...-...... .... -
,
SYSTEM MAP
show i ng proposed extensions

Certificated routes now served.
Lake Central Airlines, Inc. The purchase
of this airline by North Central awaits
approval by the Civil Aeronautics Board.
Not shown are helicopter applications
filed with the Civil Aeronautics Board
proposing service in the Chicago- .
Milwaukee, Detroit, and Minneapohs-
St. Paul areas.
!!!.!!!!IIP
CURRENT ASSETS
Cash ... . ... ... . . ...... . .... .. . . . . .. . . . . . . .... .. ... .
Accounts receivable
United States Government .. . . . . .. . ....... . . . . . . ... .
Traffic .. . .. . . . . . . . . .. .. . . .. . .. . .. . . .. . . ... . ...... .
Other . .. ... . .. . . . .... .. . . . .. ... . . .. . ... . ... . . . . . .
Inventories-at cost
Parts and supplies .. . . . ... . . . . . . .. . .. .. . .. . . .. . .. . . .
Gasoline and oil . ..... . . . . . .... .. . . .. . .. . . . . . ... . . .
Prepaid expenses and sundry deposits ... . .. . .. . . . .. .. . . .
INVESTMENTS- AT COST
Aeronautical Radio, Inc .. . . .. . . . . ... ..... .. . . . .. .. .. . .
Airlines Clearing House, Inc ... ... . .... . . . . .. . .... ... . .
OPERATING PROPERTY AND EQUIPMENT
Flight equipment (equipment costing approximately
$1,960,000 pledged as security for note payable) . . ... . .
Ground equipment ... . . . . .. . . . . . . .. ...... . . .... . . . .. .
Hangar building and improvements to leased property . .. .
Furniture and fixtures . . .... . ... . .. . ............ . .. . .. .
Total-at cost . . . . . ... . .. .. .. .. ... . . . .. . .. . . . .. .
Less depreciation to date . . ... . .... . ...... .. . . . .. . . . . . .
DEFERRED CHARGES
Route development expense .. .. . . .. ... . . .. ... . .. . . . . . .
Other ......... .. . . . ... . . . . ... . . . .. .. .. .. .. . . . .. . .. .
$ 215,276
471,890
57,292
161,526
6,936
$ 258,870
744,458
168,462
21,395
1,000
101
2,167,704
318,577
74,639
68,675
2,629,595
1,318,478
27,526
23,051
$1,193,185
1,101
1,311,117
50,577
$2,555,980
I
['
I
I
11
\I
I
CURRENT LIABILITIES
Notes payable
Payments due within twelve months
4-% note payable . .... . . ... . . . . . .. . . . .. . . ... . .. . .
Other notes payable ........ . .. . .... . .... . . ...... .
Accounts payable
Trade .. . .. . .. ... .... ....... . . . . .. .. . . ...
Traffic . . ..... .. . .. . ...... . . .. .... . ....
Unearned transportation revenue .. . . . ........... . ... . . .
Income taxes withheld from employees . . . . . .. .... . .... .
Accrued liabilities
Salaries and wages . .. . . . ...... . . . ............ . .... .
Taxes (other than income taxes) . . . .. ... .. ..... . .... .
Other ..... .. . . .. . . . .. . . ... .. .. . .... . . . .... . .. .. . .
NONCURRENT LIABILITIES
4-% note payable, secured by pledge of flight equipment,
due in monthly installments to December 10, 1957 .... .
Less payments due within twelve months . . . ... . ... . .. . . .
Other notes payable, secured by pledge of certain
equipment, due in monthly installments . ..... . . . .. . . . .
Less payments due within twelve months .. . . . ......... .
6% convertible debentures, due July 31, 1964 . .... . .. . .. .
CAPITAL
Common stock-authorized, 750,000 shares of $LOO par
value; issued and outstanding, 300,000 shares . ... .... . .
Paid-in in excess of par value of stock issued, less organi-
zation and capital stock expense written off ... . . . . . . . . .
Earned surplus (deficit) .. . . . .. . .... . .... . . . ...... . . . . .
$ 225,000
9,965
244,966
345,921
133,565
14,974
166,248
600,000
225,000
36,780
-9,965
300,000
636,051
$ 234,965
590,887
41,998
29,283
314,787
375,000
26,815
215,000
936,051
208,806
The accompanying notes to financial statements are an integral part of this balance sheet.
$1,211,920
616,815
727,245
$2,555,980
YEAR ENDED DECEMBER 31, 1954
TRANSPORTATION REVENUE
Mail ... .. ....... ... . . .......... .... .. ....... . . .... .. ....... ..... .. .. . $2,328,921
Passenger .. ............. . . . . , . .. . . . ..... .... ......................... . 3,351,782
75,630
20,975
46,734
tt;;:sb;ii;i~-
-- . .
. :::::::::::::::.::::::::::::::::::::::::::::::::::
Non-scheduled transport service . . . .. .. ... . . . ... ....... .. .. ... .......... . $5,824,042
OPERA TING EXPENSES
Flying operations . ..... . . . ..... ... . ... ..... . ...... . . ... ..... . .... . . .. . . 1,654,155
724,209
941,297
365,761
252,160
651,665
139,796
392,661
535,557
Flight equipment maintenance ... . . . . ..... .................. . .. ......... .
Ground operations ......... .. .. . ... .. ........ . . . . ................ . ... .
Ground and indirect maintenance . . .. .. .. .... . .... . . . . . . . ...... . .. .... .. .
Passenger service .... .... .... ........ . .. .... .. . . . ............ . ........ .
1'raffic and sales ...... . ......... .. .. .. ... . . ... . ...... . ...... . ......... .
Advertising and publicity . .... ... ... .. . ......... .. . ................. . .. .
General and administrative ..... . . . .... ... . . . . .. ... . ........ ... ......... .
Provision for depreciation and obsolescence .. . . .. .. . ..... ................ . 5,657,261
166,781
Operating profit . . . ..... .. .. . ..... ... . ..... .. .... .. . . . . . . . . .. .
OTHER INCOME
Incidental revenue and cash discounts earned .. . . . . . . ..... . . . ..... .. ...... . 5,283
172,064
OTHER DEDUCTIONS
Interest ... . . . . .. ... . .......... . ... . ... .. . . . . . ...... . ... .. . ....... . . . . 44,470
7,610
5,227
3,050
I.oss on sale of equipment ... ...... ...... . ...... . ... . .... ..... . . . . . .. .. .
Amortization of extension and development expense .. . ................... .
Sundry .. ... .. .................................... . ....... ... .. . .... . . 60,357
NET EARNINGS ...... . ..... ... ........... . .... .. .. . . . . . . . .... . . . $ 111,707
The accompanying notes to financial statements are an integral part of this statement of earnings.
YEAR ENDED DECEMBER 31, 1954
Earned surplus (deficit)-January 1, 1954 .. ...... .. ............. . . .... . ........ ... .. .. .... .
Net earnings for the year ended December 31, 1954 . . .. ...... .. .. .. ............ . ...... ..... .
$320,513
111,707
EARNED SURPLUS (DEFICIT)...:_DECEMBER 31, 1954 .............................. . $208,806
The accompanying notes to financial statements are an integral part of this s_
tatement of earned surplus.
NOTES TO FINANCIAL STATEMENTS- December 31, 1954
1. The company is operating under a temporary certificate of public conven-
ience and necessicy granted by the Civil Aeronautics Board for a period of
five years terminating on September 30, 1955. The company has filed a
petition with the Board requesting that a permanent c.ertificate be issued.
2. Mail revenues from the United States Government through June 30, 1954
are stated in accordance with final rates established by the Civil Aeronautics
Board. Mail revenues from July 1, 1954 are based on a permanent sliding
scale rate as fixed by the Board on December 10, 1954.
3. It was not necessary to provide for Federal or State income taxes on earnings
of the current year as the carryover of prior years' net losses are sufficient
to eliminate any tax liability.
4. During 1.954 the company issued $215,000 of 6% convertible debentures due
on Julv 31, 1964. The debentu1es may be redeemed by the company in
whole, or from time to ame in the amount of $1,000 or any multiple thereof,
by giving at least thirty days notice. A premium will be paid on the redemp-
tion of any debentures priorto July 31, 1959, as follows : 3% of the principal
amount of debentures redeemed from July 31, 1954 to and including July
31, 1956; 2% of the principal amount of debentures redeemed from/uly 31,
1956 to and including July 30, 1958, 1% of the principal amount o deben-
tures redeemed from July 31, 1958 to and including July 30, 1959. No
premium will be paid on debentures redeemed subsequent to July 30, 1959.
The debentures are convemble to common stock of company, as follows :
$3.00 principal amount of such debenture for each share of common stock
converted on or before July 30, 1959; $4.00 principal amount of such
debenture for each share of common stock converted on or before July 30,
1961 ; $5.00 principal amount of such debenture for each share of common
stock converted on or before July 30, 1964.
5. On December 3, 1954 the company entered into a loan agreement with the
Northwestern National Bank of Minneapolis under which the company
borrowed $600,000 at 4% repayable in monthly installments with the last
payment due on December 10 1957. As security for the loan, the company
pledged eighteen DC-3 aircraft. Among other things, the company agrees
that it will maintain current assets that are equal to or in excess of its current
liabilities; however, for the purpose of this computation current liabilities
will not include any indebtedness to the bank under this loan agreement.
The proceeds of the loan were used to pay the indebtedness to the Purdue
Research Foundation.
6. On February 19, 1953 the company adopted a stock option plan for emJ?loy-
ees. The plan calls for the setting aside of 60,000 shares of authorized but
unissued common stock of $1.00 par value per share of the company.
Options for the purchase of such stock at $2.8125 per share will be granted
from time to time by the Board of Directors. This plan will terminate on
February 19, 1956. On January 21, 1955 the Board of Directors approved
an option to two officers of the company to purchase 10,000 shares each
at the price stated above.
7. The company has an agreement to purchase 80,054 shares or approximately
96% of the capital stock of Lake Central Airlines, Inc. The contemplated
acquisition is awaiting approval of the Civil Aeronautics Board.
1954 1953
Operating Revenues
Passenger .. ..... .. .. . . . . . ..... . $3,351,781.58 $2,303,738.15
Mail .... ... .. . . ... ... . . . . . .... 2,328,920.66 2,468,685.07
Express .. ..... . .......... . ..... 75,630.18 68,117.20
Excess Baggage . . ...... . ....... . 20,975.32 15,738.68
Non-Scheduled Trans port Service . . 46,734.15 25,436.29
TOTAL ..... . . . . . . . . . . . . . ..... .. .. $5,824,041.89 $4,881,715.39
Operating Expenses
Flying Operations . . ............ . $1,654,154.77 $1,378,219.93
Flight Equipment Maintenance . . . 724,209.22 690,589.12
Ground Operations .. .. . .. . . ... . 941,297.10 854,544.61
Ground and Indirect Maintenance . 365,761.44 362,023.66
Passenger Service ... ... . . ... . . . . 252,159.61 207,488.94
Traffic and Sales . .. .. . .. . . . . .. . . 651,664.67 557,884.89
Advertising and Publicity .. . .... . 139,796.36 116,451.67
General and Administrative . .. . . . . 392,661.04 335,891.60
Depreciation and Obsolescence ... 535,557.08 428,307.61
TOTAL. . . .. . .. .. ..... .. . . .. . . . ... $5,657,261.29 $4,931,402.03
Net Operating Income (or Loss) . . 166,780.60 (49,686.64)
Amortization of Route Develop-
ment Expense . .... .. ....... . . (5,226.58) (10,618.48)
Other Income or Expenses, Net .. . (49,846.70) (54,283.13)
Net Profit or (Loss) ..... .. . ..... $ 111,707.32 $ (114,588.25)
1952 1951 1950 1949 1948
$1,470,536.00 $ 860,598.47 $ 427,278.43 $ 271,575.86 $113,648.51
1,681,541.47 1,181,596.40 1,355,145.00 1,036,243.00 580,968.00
55,861.17 45,172.61 18,636.56 8,363.95 5,962.67
12,783.22 5,643.14 2,418.65 1,519.04 1,012.27
-0- -0- -0- -0- -0-
$3,220,721.86 $2,093,010.62 $1,803,478.64 $1,317,701.85 $701,591.45
$ 910,778.83 $ 591,244.85 $ 459,643.25 $ 350,180.45 $190,630.20
483,291.68 275,469.03 267,105.13 229,945.55 127,966.18
631,215.95 417,329.17 418,593.97 321,057.28 201,761.50
288,406.96 153,247.64 133,142.06 110,236.03 50,414.32
137,651.63 80,588.72 14,160.56 6,791.19 3,294.22
313,469.88 182,929.45 38,138.56 26,964.07 16,749.99
60,030.18 65,295.07 30,069.09 20,302.56 15,682.92
277,638.21 198,235.10 161,234.03 138,423.88 94,069.39
205,192.44 143,722.21 120,329.42 99,598.50 54,645.15
$3,307,675.76 $2,108,061.24 $1,642,416.07 $1,303,499.51 $755,213.87
(86,953.90) (15,050.62) 161,062.57 14,202.34 (53,622.42)
-0- -0- (65,014.65) (86,291.77) (73,525.07)
(36,438.92) 21,317.61 (3,935.17) (3,793.61) (896.51)
$ (123,392.82) $ 6,266.99
Board ofn
irectors
North c
$ 92,112.75
e11tral A . J'
It mes, Inc.
We have
INc examined the
. (a "Wiscons. balance sh
$ (75,883.04) $(128,044.00)
Illenrs of ear . in corporation) eer of NOR.Tr_,
nings as of D -:i CENT
_
was made in accord and earned surplus fo ecember 31, 1954 a RAL AIR.LINES
ingly included Suchance With generally a: the Year then ende;dOthe related state_'
Procedures tests of th cepted aud . . ur exam. .
as We considered e accounting r 1t111g standards I1Jat1011
I necessary . ecords and ' and accord.
n our Opin. in the circu such Other .
and ion, the ac mstances auditing
earned surplus companying b .
Inc. at Decemb Present fairly the Ii alance sheet and
ended er 31, 195 nancial . statemen
' in confo 4 and th Pos1t1011 of ,u ts of earnin
a rmiry h e result qotth C gs
consistent basis thr Wit generally acce" sd of its operation r entral Airlines
ough ..,re ,or th
our the Year accountmg " e Year then
,-,r1nc1ples
applied on
Milwaukee w
F: , isconsin
ebruary 14
1955
STEWARDESSES JOIN NORTH CENTRAL CREWS
MODERN PASSENGER LOUNGE IN CHICAGO
SERVICE INAUGURATED TO RESORT CENTERS
NEW GENERAL OFFICES
DC-3 NORTHLINER IN FLIGHT
MODERNIZED NORTHLINER INTERIOR
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LINE MAINTENANCE AT TWIN CITIES BASE NEW GROUND OPERATIONS EQUIPMENT