1956 
annual 
report 
 NORTH CENTRAL AIRLINES, INC 
GENERAL OFFICES: 6201 Thirty-Fourth Avenue South, Wold-Chamberlain 
Field, Minneapolis 50, Minnesota 
DIRECTORS 
H. N. CARR* GARNET F. DECOURSIN* A. L. WHEELER 
WERNER L. CHRISTENSEN ROBERT F. GROVER K. B. WILLETT 
ARTHUR E. A. MUELLER* 
^Executive Committee 
OFFICERS 
ARTHUR E. A. MUELLER. Chairman of the Board 
H. N. CARR President and General Manager 
FRANK N. BUTTOMER . . . . Vice-President, Traffic and Sales 
R. H. BENDIO, SR Vice-President, Maintenance and Engineering 
ALVIN D. NIEMEYER ; Vice-President, Operations 
ARTHUR E. SCHWANDT. . . Vice-President, Industrial Relations 
BERNARD SWEET Secretary-Treasurer 
REGISTRAR AND STOCK TRANSFER AGENT 
NORTHWESTERN NATIONAL BANK OF MINNEAPOLIS 
MINNEAPOLIS, MINNESOTA 
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Board 
 NORTH CENTRAL AIRLINES in 1956 again established 
new records in passenger, air express and air mail 
traffic and commercial revenues for the nation's local 
airline industry. 
Commercial revenues totaled a record $6,446,781 
in 1956, an increase of 26% over 1955. Operating 
costs were reduced from 102.8^ per plane-mile in 
1955 to 99.6^ in 1956, one of the lowest in the 
industry. 
Despite this sharp increase in revenues and sub 
stantial reduction in costs, North Central realized a 
net profit after taxes of $34,176 compared to $128,449 
in 1955. Operating profit in 1956 was $109,182 after 
depreciation charges amounting to $301,161. Income 
taxes were $45,700 compared to $18,000 in 1955. 
Taxes were minimized in 1955 because of losses in 
curred in previous years. 
The 1956 net profit also reflects a $171,133 reduc 
tion in Federal air mail subsidy, despite a 22% in 
crease in flight service to the traveling public. This 
profit, based on a permanent mail rate through No 
vember 22, 1956, and a temporary rate after that date, 
is subject to upward adjustment when a new perma 
nent rate is established by the Civil Aeronautics Board. 
The former permanent rate, set in 1954, did not ade 
quately anticipate the company's rapid expansion or 
provide for income tax requirements. When the final 
rate is determined, it will be retroactive to November 
23, 1956. 
In hearings before the Civil Aeronautics Board, the 
local airline industry has petitioned for a review of 
the Board's mail-rate policy. The industry is seeking 
adequate compensation for its steadily expanding 
service and a more realistic return on investment. 
Hill'll--P'l li ' 
Declining Per Cent of Air Mail Revenue 
22% f Total Revenue 
19% 
1948 1949 1950 1951 1952 1953 1954 1955 1956 
In June, North Central announced its intention to 
redeem its 10-year, 6% convertible debentures on 
July 31, 1956 --eight years in advance of the due 
date. All debentures were converted into common 
stock of the company by the redemption date. 
AGGRESSIVE 
ROUTE DEVELOP MENT 
North Central Airlines is executing one of the most 
aggressive route development programs in the local 
service industry. In terms of route miles, North Cen 
tral would become the nation's largest scheduled car 
rier if the Civil Aeronautics Board approves the 
majority of the new routes for which the company 
has applied. The present system of 51 cities in nine 
states would be expanded to 145 cities in 17 states 
and one Canadian province. It would reach east to 
Buffalo, New York, south to Kansas City, Missouri, 
west to Denver, Colorado, and north to Port Arthur- 
Fort William, Ontario. 
The company's applications pending before the 
Board propose the addition of some 12,000 miles and 
94 cities to the present 3,240-mile system. This would 
make North Central five times larger, as shown on the 
accompanying map. In addition, North Central has 
on file with the Board long-range plans for 1,072 
miles of helicopter routes serving 53 points in the 
metropolitan areas of the system. 
A major portion of the company's effort, as well as 
substantial expendimres, has been directed toward the 
successful conclusion of these applications and the 
building of a larger, stronger airline. In addition to 
filing for several new routes in 1956, North Central 
participated in six major route cases before the Civil 
Aeronautics Board during the year. The results of this 
tremendous investment in route development will be 
realized within the next two years, with a Board deci 
sion affecting North Central occurring on an average 
of every 90 days. 
The most recent award in this intensive expansion 
program occurred in January of this year when the 
Board selected North Central to extend service from 
Grand Forks, North Dakota, to Omaha, Nebraska, via 
Fargo, North Dakota; Watertown, Brookings, Sioux 
Falls and Yankton, South Dakota; Sioux City, Iowa; 
and Norfolk, Nebraska. This 579-mile segment in 
creased the system 22% to 3,240 route miles and 51 
cities in nine states, making the airline precisely three 
times larger than it was at the start of service nine 
years ago. The new route will be inaugurated on 
June 1. 
 Meanwhile, Civil Aeronautics Board action on sev 
eral other route cases is imminent. Following is the 
status of North Central's applications in those cases: 
Lake Central Acquisition 
The U. S. Circuit Court of Appeals in Chicago on 
March 5, 1957, upheld North Central's contract for 
the purchase of 96% of the stock of Lake Central Air 
lines. This reverses a District Court judgment declar 
ing that the contract had been breached. The judg 
ment was sought by a minority employee group of 
Lake Central Airlines who had entered into a second 
ary agreement to purchase the stock, subject to the 
prior rights of North Central. The Civil Aeronautics 
Board Examiner last fall recommended the purchase, 
and the acquisition now awaits approval by the Board, 
which had deferred decision pending outcome of the 
appeal. 
The merger would extend North Central's system 
east to Buffalo, New York, and add 1,986 route miles 
and 28 cities to the Northliner system. 
Seven States Area Investigation 
A Bureau Counsel of the Civil Aeronautics Board 
recommended in February, 1957, that North Central 
Airlines extend service to a number of cities in the 
vast Seven States Area. The investigation is being con 
ducted by the Board to determine the need for im 
proved and additional airline service in the states 
south and west of North Central's present system. 
North Central's applications in this case propose 
over 6,000 route miles reaching as far west as Denver 
and south to Kansas City, with service to 47 additional 
cities. This is a complicated case involving a number 
of airline applicants, and the Examiner's recommen 
dation is not expected until the end of this year, fol 
lowed by a final decision sometime in 1958. 
Great Lakes Area Investigation 
Public hearings in the Great Lakes Area Investigation 
will be conducted next month. Like the Seven States 
case, the Great Lakes Investigation will determine the 
need for improved air service in the region embracing 
the five Great Lakes. Here North Central proposes a 
network of routes which would ( 1 ) link 15 Michigan 
cities with their major metropolitan markets of De 
troit, Michigan; Chicago, Illinois; and Milwaukee, 
Wisconsin; (2) provide local service between Chi 
cago and Cleveland, Ohio, and ( 3 ) improve nonstop 
service between Detroit and Cleveland; Detroit and 
Toledo, Ohio; Detroit and Lima, Ohio; and between 
Toledo and Columbus, Ohio. These routes involve 
some 1,500 additional miles. 
Duluth Air Service Case 
The Examiner's recommendation is expected momen 
tarily on an application to provide nonstop service 
between the Twin Ports (Duluth, Minnesota-Superior, 
Wisconsin) and Chicago, Milwaukee, Madison and 
Green Bay. Also being considered with this applica 
tion is a route between the Twin Ports and Sault Ste. 
Marie, Michigan, via Ironwood, Hancock-Houghton 
and Marquette, Michigan. 
The Bureau Counsel in the case recommended in 
December that North Central be awarded the nonstop 
authority, that service be extended to Sault Ste. Marie 
and that Northwest Airlines' authority to serve the 
Twin Ports be permanently suspended. 
This case marks the first time a metropolitan area 
has strongly urged the permanent suspension of a 
trunkline in favor of a local service carrier. At the 
public hearing in Duluth last August, a host of civic 
witnesses testified unanimously in favor of nonstop 
authority for North Central and permanent suspension 
of Northwest at the Twin Ports (Northwest was tem 
porarily suspended there in 1952 when North Cen 
tral inaugurated service between the Twin Ports and 
the Twin Cities). 
North Central is now required to make a minimum 
of four stops on all flights between Duluth-Superior 
and Chicago. Nonstop authority would improve the 
Twin Ports' airline service considerably, increase use 
of North Central's service, and materially strengthen 
route structure. The nonstop flights would be operated 
in addition to the present service. A final decision by 
the Board is expected this summer. 
Chicago-Milwaukee-Twin Cities Case 
Early last year the company filed application for 
authority to operate nonstop flights between the Twin 
Cities (Minneapolis-St. Paul, Minnesota) and Chi 
cago, Twin Cities and Madison, Twin Cities and Mil 
waukee and between Madison and Chicago. This non 
stop authority is held exclusively by Northwest Air 
lines. Four trunklines have also applied to operate 
between Chicago and the Twin Cities. All applica 
tions have been consolidated into a single proceeding, 
and public hearings will be held in May. 
 % OF 
GAIN 1948 
105 1949 
26 1950 
-4 1951 
45 1952 
49 1953 
21 1954 
23 1955 
22 1956 
798,014 
SCHEDULED MILES FLOWN 
1,633,936 
2,050,946 
1,977,815 
2,859,158 
4,261,743 
5,174,209 
6,374,354 
7,754,836 
Port Arthur-Fort William 
Steps are being taken to re-open the bi-lateral treaty 
between the United States and Canada which is re 
quired for action on an application to extend service 
to Port Arthur-Fort William, Ontario, from Duluth- 
Superior and from Hancock-Houghton. 
Chicago-Detroit Route 
The U. S. Court of Appeals in Washington, D. C, in 
November upheld the Civil Aeronautics Board deci 
sion in which the Board in February, 1955, awarded 
North Central Airlines the local service route between 
Chicago and Detroit. The Board's decision was chal 
lenged by an unsuccessful applicant for the route. This 
route is now a part of North Central's permanent 
system. 
SERVICE INCREASED 22% 
North Central Airlines offered more service to the 
traveling public in 1956 than in any previous year. 
The DC-3 Northliner fleet flew 7,754,836 miles, an 
increase of 22% over 1955. Since no new routes were 
inaugurated in 1956, this increase reflects the strides 
made during the year in the development of the pres 
ent system, by improvements in route patterns and 
intensification of flight schedules. 
Service to Chicago's second airport, new O'Hare 
Field, was inaugurated on April 29, 1956. The num 
ber of daily flights between the two Chicago airports 
and Milwaukee now stands at 51, one of the world's 
most frequent flight schedules. 
Another round-trip flight between Chicago and the 
Twin Cities was inaugurated during the year, along 
with additional service between the Twin Cities and 
Duluth-Superior, between Chicago and Detroit and 
between Chicago-Milwaukee and a number of inter 
mediate Wisconsin cities. New early morning service 
to the metropolitan cities was.instituted by overnight 
ing aircraft at selected intermediate points for morn 
ing flight origination, and new limited-stop flights 
have substantially improved service over a number of 
important routes. 
In terms of flight operations, North Central Air 
lines attained "trunkline" proportions in 1956. The 
airline currently operates nearly 100 daily flights -- 
about 650 take-offs and landings for an average of 
one operation every 90 seconds. 
Major improvements in facilities and procedures 
during the year have resulted in increased operational 
reliability and better passenger service. Airport ex 
pansion and additional radio navigational aids have 
enabled North Central to provide better service at 
several smaller cities during marginal weather condi 
tions. More than half the cities on the system have 
begun major airport improvement programs which 
will be completed in 1957 and 1958. These include 
lengthening runways and constructing new runways, 
laying additional taxiways, installing instrument land 
ing systems, building modern passenger terminals, and 
purchasing additional acreage to protect approaches 
for future expansion. 
To expedite operations and reservations communi 
cations, new automatic "selective" teletype circuits 
were installed system-wide, and a private line tele 
phone between the Twin Cities and Chicago via key 
cities was placed in operation. To better handle the 
rapidly growing passenger reservations traffic, the 
Chicago Reservations and System Space Control offices 
were transferred to more suitable quarters where 
equipment and procedures are designed for greater 
efficiency and speed. 
 The Confirmed Ticket Pick-up policy (proof of 
ticket purchase before confirming a passenger's reser 
vation) is helping to reduce the "no-show" and late- 
cancellation problem. This procedure was put into 
effect by the entire scheduled airline industry in Sep 
tember. 
North Central has plans to increase flights to the 
Wisconsin cities now threatened with loss of service 
by the Chicago and Northwestern railroad. The rail 
road has petitioned to discontinue 21 trains, including 
several between Chicago and Madison, Chicago and 
the Twin Cities, Chicago and Milwaukee, Madison 
and Milwaukee, and Milwaukee and Green Bay -- all 
routes currently served by North Central. 
TRAFFIC LEADERSHIP 
North Central again established new traffic records 
for the nation's 13 local airlines in 1956 and further 
strengthened its position of industry leadership. 
A total of 549,654 revenue passengers flew the 
Route of the Northliners in 1956, representing an in 
crease of 28% over the 1955 total of 430,445 passen 
gers and a lead of 36% over the second-place local 
carrier. North Central's passenger business would have 
been even greater if the weather conditions had not 
been unusually severe during the four winter months 
of the year. In addition to scheduled service, North 
Central carried 2,121 passengers on 113 charter trips, 
10 of which involved more than one aircraft. 
Air express shipments rose to 4,959,925 pounds, a 
gain of 15% over 1955 and 66% more than the 
second local airline. 
Air mail volume reached a record 2,174,801 pounds, 
an 18% increase. This exceeds the second-place car 
rier by 29%. In addition to air mail, North Central 
advanced 581,062 pounds of regular mail which is 
ordinarily carried via surface transportation. This type 
of mail is carried on selected flights over the inter 
peninsular Michigan route and between the Twin 
Cities .and Duluth-Superior, and over all routes dur 
ing the Christmas postal rush. 
While the amount of scheduled service (plane- 
miles) increased 22% in 1956, revenue passenger- 
miles increased 24% to 83,052,834. Load factor (per 
centage of seats occupied) rose from 50 to 52%.. 
In July more persons boarded North Central flights 
at Milwaukee than those of any other airline, marking 
the first time a local carrier has surpassed the trunk 
lines at a major terminal. A new single-day system 
passenger record was set on October 13 when 2,315 
passengers enplaned. 
Monthly system traffic records were 56,467 revenue 
passengers in August and 39,422 ton-miles of air ex 
press and 20,665 ton-miles of air mail in October. 
EQUIPMENT PLANS 
The company today operates 24 aircraft, all Douglas 
DC-3's, four more than a year ago at this time. Three 
of the additional aircraft, operated on long-term lease, 
were obtained last summer to meet the constantly 
growing passenger traffic demands. The other was 
purchased this year in preparation for route expansion. 
Average daily aircraft utilization rose sharply from 
six hours and 46 minutes in 1955 to a record seven 
hours and 40 minutes in 1956, reflecting near maxi 
mum equipment efficiency and the high frequency of 
service North Central is providing its cities. 
For over a year, management has conducted an in 
tensive equipment-replacement study. Decision on the 
purchase of new aircraft is dependent primarily upon 
developments in the company's route program. Should 
the Civil Aeronautics Board award the nonstop routes 
for which North Central has applied, the company 
would negotiate immediately for purchase of several 
new aircraft, not only to operate the nonstop routes 
but also to augment service on present routes. Addi 
tional DC-3's would be purchased from time to time 
in accordance with traffic growth. The DC-3's and 
new aircraft would serve as an "interim" fleet until a 
suitable replacement is available. 
FORECAST 
As a result of the company's aggressive route develop 
ment program, North Central Airlines will experience 
unprecedented growth in 1957 and 1958. In addition 
to system expansion, the company anticipates dramatic 
improvements in present route certification, for ex 
ample, the nonstop rights for which it has applied. 
These developments will enable the company to im 
prove and expand service, operate more efficiently and 
at the same time, increase commercial revenues con 
siderably. 
North Central will establish new industry records 
in commercial revenues again in 1957. The company's 
two-millionth passenger will be carried in May, and 
passenger traffic over the system as now constituted 
is expected to approach the 700,000 mark for 1957. 
With this high volume of traffic, continued efficiency 
of operations and important route improvements, the 
company will be in a position to strengthen its finan 
cial condition substantially during 1957. 
 549,654 
1948 1949 1950 J 951 1952 1953 1954 1955 1956 
2,174,801 
1948 1949 1950 1951 1952 1953 1954 1955 1956 
4,959,925 
1948 1949 1950 1951 1952 1953 1954 1955 1956 
Operations commenced February 24, 1948. 
 AMERICA'S LEADING LOCAL AIRLINE 
551,775 
Central Bonanza Lake Southern Frontier 
Central 
West Trans- Southwest Ozark Mohawk Allegheny Piedmont North 
Coast Texas Central 
POUNDS OF AIR MAIL 
Pounds of Air Mail in 1956* 
696,900 
383,200 
403,600 
503,100 
293,900 
Bonanza Lake Central West Mohawk 
Central Coast 
Southern Trans- Ozark Allegheny 
Texas Central 
4,959,925 
POUNDS OF AIR EXPRESS 
Pounds of Air Express in 1956* 
2,846,700 
2,985,000 
2,239,200 ili 
1,489,400 
1,586,500 1,623,900 
339,800 341,200 396,500 
West 
Coast 
Central Bonanza 
763,500 
996,900 
IB 
MBHH 
Texas Central 
Ozark Allegheny North 
Central 
`Totals for airlines other than North Central are based upon actual figures for the first nine months of 1956 and estimates for the last 
quarter of the year. North Central's are actual figures for the entire year. 
 NORTH CENTRAL. AIRLINES 
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ROUTES 
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One of the world's most intensive schedules 
 NORTH 
* * * 
7,754,836 miles in 1956-- 10 million miles this year Symbolizing North Central's nine years 
First among local airlines in passengers, mail and express 
Seventy flight operations daily at Chicago Midway Airport 
 NORTH CENTRAL AIRLINES, INC. 
ASSETS 
CURRENT ASSETS 
Cash $ 196,932 
Accounts receivable 
United States Government $318,937 
Traffic 690,376 
Other 102,074 1,111,387 
Inventories -- at the lower of cost 
(determined by the first-in, first-out method) or market 
Parts and supplies 188,938 
Gasoline and oil 15,729 204,667 
Prepaid expenses and sundry deposits 127,761 $1,640,747 
INVESTMENTS - AT COST 
Capital stock of Aeronautical Radio, Inc. 
and Airlines Clearing House, Inc 1,101 
Revenue bonds of City of Minneapolis, 
Metropolitan Sports Area 1,000 2,101 
OPERATING PROPERTY AND EQUIPMENT 
Flight equipment (equipment costing approximately 
$2,760,000 pledged as security for note payable) 3,185,074 
Ground equipment 445,426 
Hangar building and improvements to leased property 129,724 
Furniture and fixtures 103,457 
Total -- at cost 3,863,681 
Less depreciation to date 2,130,159 1,733,522 
DEFERRED CHARGES 
Route development expense 153,768 
Other 26,230 179,998 
$3,556,368 
 BALANCE SHEET DECEMBER 31, 19S6 
LIABILITIES 
CURRENT LIABILITIES 
Notes payable 
Payments due within twelve months 
434% note payable 
Other notes payable 
Accounts payable 
Trade 
Traffic 
Taxes on income for the year ended December 31, 1956 
Unearned transportation revenue 
Income taxes withheld from employees 
Accrued liabilities 
Salaries and wages 
Taxes (other than income taxes) 
Other 
NONCURRENT LIABILITIES 
4^4% note payable, secured by pledge of flight equipment, 
due in monthly installments to March 10, 1959 
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 
Deferred income taxes 
CAPITAL 
Common stock -- authorized, 750,000 shares of $1 par 
value; issued and outstanding, 396,614 shares 
Paid-in in excess of par value of stock issued 
Earned surplus (deficit) * 
`denotes red figure. 
The accompanying notes to financial statements are an integral part of this balance sheet. 
$225,000 
11,060 $ 236,060 
512,955 
725,116 1,238,071 
27,100 
63,136 
49,331 
230,916 
19,010 
221,370 471,296 $2,084,994 
500,000 
225,000 275,000 
26,321 
11,060 15,261 
18,600 308,861 
396,614 
812,080 1,208,694 
46,181* 1,162,513 
$3,556,368 
 STATEMENT OF EARNINGS 
YEAR ENDED DECEMBER 31, 1956 
TRANSPORTATION REVENUE 
Passenger 
Mail 
Express 
Excess baggage 
Non-scheduled transport service 
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 
OTHER DEDUCTIONS 
Interest 
Extension and development expenses 
Sundry 
Earnings (before taxes on income) 
TAXES ON INCOME 
Federal normal tax and surtax 
State income taxes 
NET EARNINGS 
The accompanying notes to financial statements are an integral part of this 
statement of earnings. 
$6,137,216 
1,522,211 
149,640 
40,506 
119,419 $7,968,992 
2,521,949 
960,021 
1,346,628 
277,790 
436,808 
1,262,569 
216,648 
536,236 
301,161 7,859,810 
109,182 
15,345 
124,527 
30,522 
8,566 
5,563 44,651 
79,876 
43,650 
2,050 45,700 
$ 34,176 
STATEMENT OF EARNED SURPLUS (DEFICIT)* 
' YEAR ENDED DECEMBER 31, 1956 
Earned surplus (deficit)*--January 1, 1956 $ 80,357* 
Net earnings for the year ended December 31, 1956 34,176 
EARNED SURPLUS (DEFICIT)*--DECEMBER 31, 1956 .$ 46,181* 
The accompanying notes to financial statements are an integral part of this 
statement of earned surplus. 
NOTES TO FINANCIAL STATEMENTS - December 31, 1956 
1. Mail revenues through November 22, 1956, were based on permanent rates estab 
lished by the Civil Aeronautics Board with revenues subsequent to that date based 
on temporary rates which were approved retroactively by the Board in March, 
1957. Accordingly, there is included in income the amount of $34,400 representing 
estimated additional air mail revenue allocable to 1956 as a result of the new 
rates being in effect from November 23. Income taxes of $18,600 were provided 
for this additional revenue and included as a deduction in determining net earn 
ings. However, since these taxes are not payable until 1958, they have been 
shown as a non-current liability on the balance sheet. 
2. Effective January 1, 1956, the company revised depreciation rates on aircraft, 
engines and radio equipment to reflect extended estimates of useful lives from 
three years to four years. As a result depreciation expense for 1956 was approxi 
mately $88,600 less than it would have been, if the rates in effect during prior 
years had been continued. The revisions will have the effect of increasing depre 
ciation provisions after 1956. This change is in conformity with industry practice 
as other airlines have, from time to time, changed their depreciation rates to more 
accurately reflect the anticipated future life of equipment. 
3. As collateral security for the loan from Northwestern National Bank the company 
has pledged twenty DC-3 aircraft. Pursuant to the loan agreement, the company 
should maintain current assets that are at least equal to current liabilities. How 
ever, for the purposes of this computation, liabilities will not include any indebted 
ness to the bank under the loan agreement. 
4. During 1956 the company proposed to redeem its 6% debentures. However, all of 
the holders of such securities exercised their right to convert to one share of 
capital stock of the company for each $3 principal amount of debenture. Accord 
ingly, 65,054 shares of capital stock were issued with an increase of $65,054 in 
the capital stock account and $117,616 in the paid-in-surplus account after reduc 
tions in the latter account of $502 representing cash payments in lieu of fractional 
shares and the write-off of prepaid debenture expense of $12,128. 
5. The company's stock option plan provides that 60,000 shares of common stock be 
made available for purchases by employees with options to be granted from 
time to time by the Board of Directors. During 1956, six officers exercised options 
previously granted and purchased 15,000 shares of capital stock. This resulted in 
an increase of $15,000 in the capital stock account and $27,188 in the paid-in 
surplus account. 
6. The Internal Revenue Service has examined the company's Federal income tax 
returns for the years 1953-1955. The only issue is the estimated useful lives for 
computing the depreciation provisions for aircraft and engines. The company con 
sidered three years as the useful life of such assets while the Service contends 
that the useful life should be five years. A deficiency of $204,260 has been pro 
posed which is being contested by the company and settlement is anticipated at 
a lesser amount. It is important to note that any deficiency paid will be recovered 
in future years through lowered income taxes as a result of larger depreciation 
deductions than originally anticipated. 
7. The company has an agreement to purchase 80,054 shares or approximately 96% 
of the capital stock of Lake Central Airlines, Inc., for approximately $80,000. The 
sellers claimed breach of contract on the part of the company and sold the stock 
to third parties. These third parties sued the company to have the original contract 
set aside, but, in a decision rendered by the Seventh Circuit Court of Appeals, the 
contract was determined to be binding and the company's position upheld. 
An examiner for the Civil Aeronautics Board has recommended that the com 
pany be allowed to acquire the Lake Central capital stock. However, a decision 
in this matter has not yet been rendered by the Board. 
8. In February, 1957, the company purchased one DC-3 aircraft for $87,500. This 
purchase was financed by a bank loan of $125,000 to cover acquisition, standard 
ization and modification costs. 
 COMPARATIVE OPERATING STATISTICS 
Operating Revenues 
Passenger 
Mail 
Express 
Excess Baggage 
Non-scheduled Transport Service .. 
TOTAL 
Operating Expenses 
Flying Operations 
Flight Equipment Maintenance 
Ground Operations 
Ground and Indirect Maintenance.. 
Passenger Service 
Traffic and Sales 
Advertising and Publicity 
General and Administrative 
Depreciation and Obsolescence.... 
TOTAL 
Net Operating Income (or Loss).... 
Amortization of Route Development 
Expense 
Other Income or Expenses, Net .... 
Net Income or (Loss) Before Taxes. 
Income Taxes 
Net Income or (Loss) 
1956 1955 1954 1953 1952 1951 1950 1949 1948 
$6,137,216 $4,933,487 $3,351,782 $2,303,738 $1,470,536 $ 860,599 $ 427,278 $ 271,576 $ 113,648 
1,522,211 1,689,890 2,328,921 2,468,685 1,681,542 1,181,596 1,355,145 1,036,243 580,968 
149,640 126,476 75,630 68,117 55,861 45,173 18,637 8,364 5,963 
40,506 30,477 20,975 15,739 12,783 5,643 2,419 1,519 1,012 
119,419 28,711 46,734 25,436 -0- -0- -0- -0- -0- 
$7,968,992 $6,809,041 $5,824,042 $4,881,715 $3,220,722 $2,093,011 $1,803,479 $1,317,702 $ 701,591 
$2,521,949 $1,959,481 $1,654,155 $1,378,220 $ 910,779 $ 591,245 $ 459,643 $ 350,180 $ 190,630 
960,021 845,753 724,209 690,589 483,292 275,469 267,105 229,946 127,966 
1,346,628 1,102,295 941,297 854,545 631,216 417,329 418,594 321,057 201,762 
277,790 333,608 365,761 362,024 288,407 153,248 133,142 110,236 50,414 
436,808 320,195 252,160 207,489 137,652 80,589 14,161 6,791 3,294 
1,262,569 921,705 651,665 557,885 313,470 182,929 38,139 26,964 16,750 
216,648 185,111 139,796 116,451 60,030 65,295 30,069 20,303 15,683 
536,236 456,193 392,661 335,891 277,638 198,235 161,234 138,424 94,069 
301,161 470,169 535,557 428,308 205,192 143,722 120,329 99,599 54,645 
$7,859,810 $6,594,510 $5,657,261 $4,931,402 $3,307,676 $2,108,061 $1,642,416 $1,303,500 $ 755,213 
109,182 214,531 166,781 (49,687) (86,954) (15,050) 161,063 14,202 (53,622) 
(8,566) (26,995) (5,227) (10,618) -0- -0- (65,015) (86,292) (73,525) 
(20,740) (41,087) (49,847) (54,283) (36,439) 21,317 (3,935) (3,793) (897) 
79,876 146,449 111,707 (114,588) (123,393) 6,267 92,113 (75,883) (128,044) 
45,700 18,000 -0- -0- -0- -0- -0- -0- -0- 
$ 34,176 $ 128,449 $ 111,707 $ (114,588) $ (123,393) $ 6,267 $ 92,113 $ (75,883) $ (128,044) 
 SYSTEM EXPANDS THREEFOLD IN NINE YEARS 
1948 1951 
1,080 Route Miles Serving 
19 Cities in Three States 
1,526 Route Miles Serving 
28 Cities in Four States 
1954 1957 
2,399 Route Miles Serving 
39 Cities in Five States 
3,240 Route Miles Serving 
51 Cities in Nine States 
  CENTRAL Al