North. Central Airlines 
ANNUAL REPORT 
1965 
 NORTH CENTRAL AIRLINES, INC 
GENERAL OFFICES: 6201 Thirty-Fourth Avenue South, Minneapolis, Minnesota 55450 
BOARD OF DIRECTORS 
HAL N. CARR* Chairman A. JAMES MUELLER 
D. E. CROOKER JOSEPH E. RAPKIN* 
G. F. DECOURSIN* 
* Executive Committee 
H. P. SKOGLUND 
KENNETH B. WILLETT 
ROBERT G. ZELLER 
OFFICERS 
HAL N. CARR 
R. H. BENDIO 
FRANK N. BUTTOMER . . 
L. J. KEELY 
T. M. NEEDHAM .... 
A. D. NIEMEYER .... 
ARTHUR E. SCHWANDT. . 
BERNARD SWEET .... 
G. F. WALLIS 
D. F. MAY 
JOHN P. DOW 
JERROLD SCOUTT, JR. . . 
CHARLOTTE G. WESTBERG 
. . Chairman oj the Board and President 
Vice President 
. . . . Vice President-Traffic and Sales 
Vice President-Maintenance and Engineering 
. . . . Vice President-Ground Operations 
Vice President 
. . . Vice President-Industrial Relations 
Vice President-Finance 
. . . . Vice President-Flight Operations 
Treasurer 
Secretary 
Assistant Secretary 
Assistant Secretary 
STOCK TRANSFER AGENTS 
Northwestern National Bank of Minneapolis; Minneapolis, Minnesota 
Irving Trust Company; New York, New York 
 March 11, 1966 
To our stockholders, employees, and friends: 
In 1965, North Central achieved the greatest year of growth in the company's history. 
With record traffic and revenues, the airline earned its largest profit. 
On revenues of $33,891,000, net earnings were $1,139,000--35 per cent greater than 
1964. This profit, together with depreciation charges of $1,997,000, developed cash flow 
of $3,136,000. 
The Northliners carried 1,616,900 passengers in 1965 -- almost 20 per cent ahead of 1964. 
The 263,599 increase in passengers was the largest in the history of the airline. The 
40,982,000 pounds of cargo flown--including air freight, express, and mail--was 31 per 
cent over 1964, the best previous year. 
While carrying record traffic, the company continued its excellent operating perfor 
mance, and completed 98 per cent of its 15,600,000 scheduled miles in 1965. Besides 
achieving this enviable performance factor, North Central also maintained its perfect 
18-year safety record. 
In July, a 10-jet program was announced by the company. The airline has ordered 
Douglas DC-9 jet aircraft for inauguration of service on its system early in 1967. The 
agreement with the Douglas Aircraft Company includes an initial purchase of five of 
the new 100-passenger twin-jets, including parts, at a cost of $20 million and an option 
for five additional aircraft. 
In line with the company's equipment modernization program, six more pressurized 
Convair 440 aircraft were added during the year and one early in 1966, bringing the 
fleet to 30 Convairs and 16 DC-3's. Over 90 per cent of the airline's seat miles are now 
flown with Convairs. 
The company continued to pursue its program of route development. During 1965, 
the airline petitioned the Civil Aeronautics Board for a route from Sioux Falls, South 
Dakota, to Chicago via Rochester, Minnesota. The Board approved North Central's 
application to remove operating restrictions on its route between Duluth/Superior and 
Chicago. This action allows the company greater flexibility in scheduling and will 
improve service between these points and many Wisconsin communities. 
In reviewing the growth of North Central in 1965, we would like to acknowledge the 
loyalty of our employees and their contribution to the airline. To our stockholders, we 
extend our gratitude for their confidence in the company. To our Northliner passengers, 
we want to express our sincere appreciation for their continued support. 
We believe that the company's prospects for the future have never been more prom 
ising. North Central can look forward in 1966 to another year of record traffic, revenues, 
and profits. 
Sincerely, 
HAL N. CARR 
Chairman of the Board and President 
 Annual Report 1965 
Financial review 
R 
ECORD PROFITS of $1,138,752 were attained 
by North Central in 1965--35 per cent ahead 
^ of 1964. Revenues reached an all-time high 
of $33,891,031, compared with $29,714,777 in the pre 
vious year. 
With operating expenses for 1965 of $31,324,601, 
including $1,997,488 in depreciation charges, the com 
pany realized an operating profit of $2,566,430. The net 
profit was $1,138,752, after income taxes of $1,013,765. 
It is significant that the net earnings, together with the 
$1,997,488 in depreciation, resulted in cash flow of 
$3,136,240. 
The company earned the profit of $1,138,752 despite 
the fact that $760,000 in excess profits were returned to 
the Federal Government under the class rate for re 
gional airlines. North Central's record commercial 
revenues combined with its effective cost control pro 
gram placed the company in this profit-sharing position 
for the fifth consecutive year. 
During 1965, a $17-million line of credit for financing 
the airline's jet acquisition program was established 
with a group of 15 banks at an interest rate of 5^ per 
cent. This extremely favorable rate was obtained be 
cause of North Central's strong financial position--the 
best in its 18-year history. 
REVENUES (MILLIONS OF DOLLARS) 
 SUMMARY OF DECISIONS RENDERED IY THE C. A.R. 
AFFECTING NORTH CENTRAL DURING THE YEAR 
AND STATUS OF APPLICATIONS PENDING 
Route 
development 
N 
ORTH CENTRAL 
continued to 
advance its route development 
program during 1965. The 
company made applications to the 
Civil Aeronautics Board for 
new routes and for the lifting 
of operating restrictions on 
existing segments. At present, 
the company serves 90 cities 
in 10 Midwest states and Canada 
over a 7,000-mile route system. 
 The Northliner fleet of 30 Convairs and 16 
DC-3's serves 90 cities in 10 Midwest states 
and Canada. 
TORONTO SERVICE 
Settlement of the Bilateral Air Transport 
Agreement between the United States and 
Canada was announced by President Johnson 
in December 1965 and signed by both parties 
on January 17, 1966. Among other things, 
the agreement provides for a Detroit-Toronto 
route to be operated by a United States local 
service carrier. The C.A.B. will consider 
North Central's application for this route 
sometime in 1966. In addition, the airline has 
applications on file for three other nonstop 
routes to the Canadian city: Cleveland- 
Toronto, Milwaukee-Toronto, and Chicago- 
Toronto, as well as a one-stop route to Tor 
onto from Chicago via Detroit. 
DETROIT-BAETIMORE 
North Central's application for authority to 
operate between Detroit and Baltimore, with 
intermediate cities of Cleveland and Pitts 
burgh, is still pending. This segment of 415 
miles would improve the eastern portion of 
the system by adding the two major cities of 
Baltimore and Pittsburgh. 
SIOUX CITY-DENVER 
During 1965, a prehearing conference was 
held on the company's application for a 480- 
mile route segment between the terminals of 
Sioux City, Iowa, and Denver. A formal 
hearing on this route has been scheduled by 
the C.A.B. for March 1966. Approval of 
North Central's application for this route 
would give new strength to the western seg 
ment of the system, and the company would 
have its first service to the State of Colorado. 
OMAHA-ST. LOUIS 
North Central has an application on file for 
authority to operate a 400-mile segment from 
Omaha to St. Louis, via the intermediate 
cities of Chillicothe and Moberly, Missouri. 
If approved, it would bring a new major 
terminal--St. Louis--to the system and give 
the company its first entry into Missouri. 
OMAHA-KANSAS CITY 
Service to three new cities has been proposed 
in the company's application for a 169-mile 
segment south of Omaha. They are: Falls 
City, Nebraska; Atchison and Kansas City, 
Kansas. This would add the State of Kansas 
to North Central's system. 
RAPID CITY-OMAHA 
North Central's amendment to its Omaha- 
Kansas City application is still pending before 
the C.A.B. Authorization has been requested 
between Norfolk, Nebraska, and Rapid City, 
South Dakota, with nonstop service between 
Rapid City and Omaha. 
SIOUX FALLS-ROCHESTER-CHICAGO 
In December 1965, the company applied for 
a route between Sioux Falls, South Dakota, 
and Chicago--with one intermediate stop at 
Rochester, Minnesota. This new route would 
facilitate air travel from the Dakotas to Roch 
ester and Chicago by making single carrier 
service available to several cities in these 
states. It would also add Rochester to North 
Centyal's system. 
"USE IT OR LOSE IT" PROCEEDINGS 
In February 1965, the C.A.B. rendered its 
decision on the company's service to Pontiac, 
Cadillac/Reed City, and Port Huron, Mich 
igan. Under its "use it or lose it" policy, the 
Board permitted North Central to suspend 
service to these communities. In May, the 
C.A.B. stayed the effective date of this order, 
as it pertains to Pontiac and Cadillac/Reed 
City, pending judicial review which is now 
in progress. A decision by the Sixth Circuit 
Court of Appeals is expected in 1966. 
OPERATING FLEXIBILITY APPLICATIONS 
During 1965, the company petitioned the 
C.A.B. for the lifting of operating restrictions 
on flights between Duluth/Superior and Chi 
cago. This request for a change in service 
pattern was granted by the Board in Novem 
ber. It permits North Central to overfly any 
intermediate point between Duluth/Superior 
and Chicago, as well as between Duluth/ 
Superior and Madison, Wisconsin. Nonstop 
flights can now be scheduled between the 
Twin Ports and Wisconsin cities. This ap 
proval allows the company to provide im 
proved service to these communities. 
The Board's action is in accordance with 
its policy of strengthening the regional air 
lines by relaxing operating restrictions to per 
mit nonstop and skipstop authority. The 
company has also requested authority to op 
erate between Minneapolis/St. Paul and 
Chicago with: 1) nonstop service; 2) one 
stop, Milwaukee; 3) one stop, Madison; and 
4) three stops -- La Crosse, Madison, and 
Milwaukee, Wisconsin. 
TRANSFER INVESTIGATIONS 
In line with the C.A.B.'s plan to strengthen 
regional carriers through transfer of segments 
and cities from trunk carriers to regional air 
lines, North Central has an application on 
file for suspension of United Air Lines at 
Saginaw/Bay City/Midland, Flint, Lansing, 
and Muskegon, Michigan. If the Board acts 
favorably on this application, the company 
will provide improved replacement service. 
REGIONAL AIRPORT INVESTIGATIONS 
The North Central Area Airport Investiga 
tion, concerned with combining service to 
eight cities at regional airports, was com 
pleted in 1964 to be effective January 25, 
1965. 
The Board ruled that, in Wisconsin, Marsh 
field would be served through the Wausau 
airport and Wisconsin Rapids, through Stev 
ens Point until a suitable regional airport can 
be constructed to accommodate these four 
communities. 
The Board also ordered that Appleton will 
receive its service through the Oshkosh air 
port and Clintonville through Green Bay. 
Ashland, Wisconsin will be served through 
Ironwood, Michigan. 
On January 15, 1965, the Board stayed the 
effective date of this order as it pertained to 
Ashland, Appleton, and Clintonville, pend 
ing judicial review of the Board's decision. 
On January 18, 1966, the Seventh Circuit 
Court of Appeals in Chicago affirmed the 
previous decision of the C.A.B. In accordance 
with this ruling, North Central consolidated 
its service to these points as ordered by the 
Board. 
3 
 Traffic growth 
Passenger traffic increased nearly 20 per 
cent in 1965 as 1,616,900 persons flew the 
Route of the Northliners. 
I 
N 1965, North Central broke all traffic records as pas 
senger boardings exceeded 1964 by almost 20 per cent 
and cargo increased 31 per cent. Some 263,599 more 
passengers were flown during the year than in 1964. This is 
the highest passenger increase ever achieved by the airline. 
The Northliners carried a record 1,616,900 passengers in 
1965. The company flew 273,209,300 passenger miles, a 
gain of 19 per cent over the previous year. 
Two daily records were set on July 2 when 6,330 passen 
gers were carried over the system, and 1,831 of these persons 
boarded at Chicago--an all-time high for a single station. 
In August, the company established a new monthly mark 
for the regional airline industry, with 166,697 passengers 
carried. 
This was the first full year the company offered half-fares 
to military standby passengers on a space available basis. 
Nearly 71,000 servicemen and women took advantage of 
this special fare to fly with North Central. For many, this 
was their first airline trip. 
The company also flew 280 charters and 74 scenics during 
1965, and 265,467 additional plane miles were operated. 
Some 14,483 charter passengers were flown and 6,123 peo 
ple took scenic trips. 
Substantial gains in cargo were also achieved by the com 
pany in 1965 as a record 40,982,213 pounds of air freight, 
express, and mail were carried--a 31 per cent increase over 
the previous year. 
Total cargo ton miles flown were 3,807,677, an increase 
of 32 per cent over 1964. Air freight ton miles reached 
2,073,559--37 per cent ahead; and air express was 1,023,685, 
a 32 per cent gain. Mail increased 21 per cent during 1965, 
with 710,433 ton miles flown. 
While carrying a record number of passengers in 1965 
and the greatest volume of cargo in the airline's history, 
North Central maintained its perfect 18-year safety record. 
Since inaugurating service in 1948, the company has flown 
nearly 12 million passengers 1,918,000,000 passenger miles 
without a single fatality or injury to passengers or crew 
members. 
Operating; performance 
T 
HE COMPANY achieved an outstanding per 
formance record in 1965, as 98 per cent of its 
15,611,988 scheduled miles were flown. 
The weather conditions in North Central's area during 
the winter months were unusually severe and prolonged 
during 1965. In spite of this, the company again recorded 
an excellent completion factor, while handling the substan 
tial increase in passengers and cargo. 
Exacting maintenance was one of the major factors in 
this high level of performance. In 1965, only 134 of the 
company's 180,957 departures--less than one-tenth of one 
per cent--were cancelled for mechanical reasons, and less 
than one per cent were delayed. 
Again this year, the company's winterization program, 
"Operation Cold Front", was put into effect. This plan 
assures that personnel are properly trained and all ground 
equipment is in a ready condition for winter operations. 
New procedures were added to the program in 1965 so that 
the airline's operating performance would again be signifi 
cant despite the sub-zero conditions which exist over much 
of the system. 
The company's impressive performance record is a tribute 
to North Central's employees and their dedication to the 
task of keeping the Northliners flying. 
Besides the scheduled flights, 843 extra sections were op 
erated to provide additional service to the traveling public 
during peak periods. This represents another 118,145 miles 
flown by the company in 1965. 
4 
  Improved services 
N 
ORTH CENTRAL increased its services to the 
traveling public by providing additional seat miles 
with the purchase of six more Convair 440 aircraft 
during 1965, and one in January 1966. This is in accordance 
with the airline's continuing equipment modernization pro 
gram to replace its DC-3's with Convairs. 
Some 586,492,415 seat miles were flown this year--a 14 
per cent increase over 1964. Presently, over 90 per cent of 
the company's seat miles are operated with pressurized 
Convairs. North Central's fleet now consists of 30 Convairs 
and 16 DC-3's. 
Northliner Cargo Service was initiated by North Central 
in April, featuring all-cargo trips to 12 Midwest cities. The 
specialized flights assure shippers of overnight delivery to 
these cities. The new service operates in addition to North 
Central's regularly scheduled flights, which also carry cargo. 
The Cargoliner Service uses DC-3 aircraft specially equipped 
for handling 7,000 pounds of cargo in a variety of sizes. 
To improve passenger handling, additional teletype 
equipment was installed at the Chicago, Minneapolis, 
Madison, and Duluth city ticket offices. This permits the 
reservations agent to have immediate access to all ticketing 
information regarding the passenger. Similar units were 
placed at major airport ticket offices. 
Another new service to the traveling public was the in 
stallation of television monitors at the airport ticket counters 
in Milwaukee and Green Bay, like the ones at O'Hare Air 
port. These monitors allow passengers to determine, at a 
glance, flight arrival and departure times and gate assign 
ments. This monitor system was also added to North Cen 
tral's Reservations Center at Milwaukee so that telephone 
sales agents will have current flight information available 
to passengers who call in. 
Thejoint airlines' reservations Electronic Switching System 
was expanded substantially in 1965. North Central was the 
fourth airline to share this message relay system which per 
mits "instant" exchange of teletype messages on interline 
reservations. 
Now that all the 24 domestic airlines and most foreign 
carriers are participants in this program, North Central 
reservations agents can communicate directly with every 
"airline city" in the United States and those in most foreign 
countries. It has also been programmed to handle messages 
on air cargo and flight operations, as well as administrative 
business information. 
Baggage allowance for North Central's passengers was 
increased from 40 pounds to 50 pounds in 1965. Also, a new 
tag is now being used to improve baggage handling. 
North Central expanded its credit program in 1965 to 
include the use of American Express credit cards for on-line 
transportation. This is in addition to the Universal Air 
Travel Plan and the company's own credit card. 
More than 18,000 personal sales calls were made on North 
Central customers by the company's traffic and sales repre 
sentatives. In addition, some 150 speeches were given to 
further tell the North Central story, and the company's 
color movie, "The Northliner", was shown to 75 civic, 
educational, and airline groups. 
During the year, North Central launched an extensive 
advertising program. Newspaper and television coverage 
was expanded. For the first time a specialized series of 
advertisements designed to emphasize the advantages of busi 
ness travel by air appeared in Fortune magazine. Unique, 
colorful travel posters were developed to focus attention 
on North Central's vacation areas, and over 7,500 were 
distributed to travel agencies, ski and sports shops by sales 
personnel. 
To further promote vacation and weekend travel, the 
airline offered several package tours to popular ski resorts 
on its system and advertised the program widely in The 
Wall Street Journal and ski magazines. 
Three new airport terminal buildings were added to North 
Central's system in 1965 for Green Bay, Wisconsin; Hibbing/ 
Chisholm, Minnesota; and Port Arthur/Fort William, 
Ontario, Canada. Remodeling of airport accommodations 
was accomplished at Minot, North Dakota; La Crosse, 
Wisconsin; and South Bend, Indiana. Lrnder construction are 
new terminals for Benton Harbor/St. Joseph and Saginaw/ 
Bay City/Midland, Michigan; Madison, Wisconsin; and 
Bismarck/Mandan, North Dakota and enlarged facilities at 
Detroit Metropolitan Airport. 
North Central and several other airlines will move from 
Willow Run Airport at Ypsilanti to the expanded Detroit 
Metropolitan when it is completed in the Spring of 1966. 
 This is North Central s new hangar at Detroit Metropolitan Airport which will be ready for use in April 1966. 
6 
 In conjunction with this move, the company has con 
structed a new $1,725,000 maintenance base at Metropoli 
tan to replace the hangar formerly leased at Willow Run. 
This base is used to serve the eastern portion of the airline's 
system. 
The telephone answering service at the company's 
Milwaukee Reservations Center will be greatly improved 
early in 1966 when a new Call Distributor system is installed. 
This facility will make 200 telephone lines available to the 
Milwaukee center, which handles 60 per cent of North 
Central's reservations, and will speed up the transmission 
of reservations information. The system will also be used to 
handle communications concerning baggage, cargo, and 
flight operations. 
In December 1965 the company announced that an 
agreement had been made to share Eastern Air Lines' 
computer system which will provide North Central pas 
sengers with improved reservations and flight information. 
The combined operation, using Eastern's Univac 490 com 
puter, will begin in April 1966. The system makes immediate 
reservations information, as well as arrival and departure 
times, on North Central available to nearly 70 per cent of 
the passengers. Also, this same data will be obtainable on 
1,300 Eastern flights and those of the three other participat 
ing airlines. 
In addition, through an "interline availability" arrange 
ment, immediate confirmation can be received on 11 other 
airlines. This represents 90 per cent of North Central's inter 
line requests. Likewise, immediate reservations information 
on North Central's 175 daily flights will be available to 
these airlines. 
North Central passengers will be able to receive informa 
tion concerning reservations, arrival and departure times, 
number of stops, type of equipment, days of operation, and 
meal service more quickly by utilization of the Univac 
computer system. 
Advantages for reservations personnel include: improved 
0 North Central will utilize these two Real-Time Univac 490 computers 
starting in April 1966 by agreement with Eastern Air Lines. The combined 
operation will improve reservations and flight information services to 
Northliner passengers. 
quick reference material, reduced telephone time, better 
utilization of airline seats by immediate resale of cancella 
tions, rapid dissemination of flight information, and im 
proved passenger handling when irregular operations occur. 
The reservations computer system to be shared by North 
Central has a capability of processing 100,000 transactions 
an hour. 
A $10-million general office and main operations base-- 
as modern as the DC-9 jets that the company has ordered 
--will be built at the Minneapolis/St. Paul International 
Airport. This expansion plan, which has been under study 
for over a year, was approved by the Board of Directors in 
July 1965. 
The new complex will replace all of the company's pres 
ent facilities located in several buildings on the west side of 
the airport and will be completed within four or five years. 
The plan will meet North Central's space requirements for 
the next 20 years as it moves ahead in the jet age. 
Management development 
AT ITS MARCH MEETING, North Central's Board 
/ of Directors elected Hal N. Carr as Chairman of 
m. the Board to fill the vacancy created by the death 
of Arthur E. A. Mueller, Chairman since 1952. Mr. Carr 
assumed the duties of Chairman in addition to his positions 
as President and General Manager. 
Joseph E. Rapkin of Milwaukee was elected a director to 
fill Mr. Mueller's unexpired term on the Board. Mr. Rapkin 
is a partner in the law firm of Foley, Sammond and Lardner 
of Milwaukee. 
Robert G. Zeller of New York was elected to North 
Central's Board at the December meeting. He is a general 
partner in the investment banking firm, F. Eberstadt & Co., 
New York. 
The extensive business background which both Mr. Rapkin 
and Mr. Zeller bring to North Central will be an important 
contribution to the company. 
In 1965, the airline continued its program of developing, 
within the organization, managerial personnel qualified to 
meet the company's future growth demands. 
In line with this policy, three North Central department 
heads were named officers of the company by the Board of 
Directors at its April meeting. L. J. Keely was elected Vice 
President-Maintenance and Engineering; T. M. Needham, 
Vice President-Ground Operations; and G. F. Wallis, 
Vice President-Flight Operations. 
During the year, three positions in the Traffic and Sales 
Department were created to improve and promote North 
Central's service to its passengers and shippers. A Regional 
Traffic and Sales Manager was appointed for the central 
area of the airline and another for the eastern. Also added 
was the position of Manager-Advertising and Promotion. 
 Jet program 
 
Signing the agreement for North Central's 
10-jet program is President Hal N. Carr. 
Also participating are John L. Burton, left. 
Regional Sales Manager for Douglas Air 
craft, and Bernard Sweet, North Central's 
Vice President-Finance. 
ORTH CENTRAL'S decision on jet aircraft was 
made in July, when the company announced its 
10-jet Douglas DC-9 program. Through an agree 
ment with the Douglas Aircraft Company, the airline pur 
chased five of the new 100-passenger twin-jets, including 
parts, at a cost of $20 million and has an option for five 
additional aircraft. 
For several years the company made an extensive evalua 
tion study of the jets that could meet North Central's partic 
ular requirements. The factors which had to be considered 
were capacity, speed, range, and design features of the air 
craft; operating costs and purchasing price; and adaptability 
of the plane to the airline's route system and airport runways. 
The study indicated that the DC-9 is the most suitable jet 
aircraft for North Central's operation. 
The DC-9 has two Pratt & Whitney fan jet engines which 
produce 14,000 pounds of thrust each during take-off. It 
cruises at 560 miles an hour. Wingspan of the new jet is 
93.4 feet. The overall length of the aircraft is 119.3 feet. 
The trim jetliner will bring a new look to many airports 
served by North Central. Distinctive physical features are 
the high-level "T" tail and the two engines mounted at the 
rear of the fuselage. This positioning of the engines produces 
an even quieter ride for the passenger. 
The company will offer all first-class service on its jets, 
with two stewardesses in attendance. The DC-9 features 
"big jet" roominess, outstanding climate control comfort, 
interior beauty, and a smooth ride. Travelers will enjoy all 
the luxury expected in the jet age. 
Seating facilities for 100 passengers in the spacious cabin 
have exceptional head, shoulder, and leg room. Another 
feature of the new jet is its unexcelled lighting and window 
During 1965, North Central supervisory personnel from 
all departments completed classes in jet familiarization. 
Training has also been started by maintenance employees. 
The company will inaugurate jet service early in 1967, 
thus bringing the speed and comfort of jet travel to North 
Central passengers. 
The future 
N 
ORTH CENTRAL is looking forward to a greater 
year of growth in 1966. With anticipated improve 
ments in the airline's route structure and pas 
senger service, as well as the scheduling of more Convairs, 
the company expects record earnings in the coming year. 
Considerable time and effort will be expended during 
1966 to prepare North Central for its entry into the jet age. 
Extensive personnel training will be accomplished; special 
ized equipment, acquired; and facilities upgraded through 
out the system, to make the airline's transition to jets an 
efficient one. 
Several pending C.A.B. cases pertaining to North Central 
will be completed in the next year, and the company is 
optimistic about these decisions. Favorable Board action will 
strengthen the airline's route system. 
As the company looks ahead to 1966, a substantial in 
crease in passenger and cargo traffic is anticipated. This will 
result from the additional capacity produced when more 
Convairs are placed in service and from aggressive sales pro 
motion. Corresponding record revenues are forecast. With 
a continuation of the company's intensive cost control pro 
gram, management is projecting even larger profits for 1966. 
8 
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Present routes 
Proposed routes 
 Five years of 
record progress 
N 
ORTH CENTRAL achieved new records in all 
categories of traffic during 1965, as it has every 
year since beginning scheduled operations in 
1948. The 1,616,900 passengers carried was nearly 20 per 
cent ahead of 1964. The 263,599 increase in passengers was 
the largest for any year in the company's history. Passenger 
traffic since 1961 has shown a 56 per cent gain. 
Air cargo, which includes freight, express, and mail, 
increased even more. Over the past five years, cargo has 
grown 130 per cent and, in 1965, 31 per cent. This year's 
gain was due, in part, to the company's new Cargoliner 
Service inaugurated in April. In addition, with more Con- 
vairs in service during 1965, cargo capacity on the regularly 
scheduled flights was increased. 
North Central's available seat miles have risen 50 per 
cent in the last five years, in line with the company's con 
tinuing program to increase service to the traveling public. 
In 1965, some 586,492,415 seat miles were offered--14 per 
cent more than in the previous year. 
With the advancement of the airline's equipment modern 
ization program, even greater traffic increases are anti 
cipated in 1966. 
12 
  NORTH CENTRAL AIRLINES, INC. 
Assets 
CURRENT ASSETS 1965 1964 
Cash 
Accounts receivable 
Public service revenue (Note 1) 
Traffic 
Other 
Flight equipment parts, at average cost (less deterioration 
reserves of $369,592 and $276,041) 
Maintenance and operating supplies 
Prepaid expenses and sundry deposits 
Total current assets 
$ 1,593,962 $ 1,253,874 
992,374 863,163 
2,755,168 2,499,066 
476,387 451,037 
4,223,929 3,813,266 
1,183,017 951,414 
293,529 277,354 
846,238 786,610 
8,140,675 7,082,518 
OPERATING PROPERTY AND EQUIPMENT-at cost (Note 2) 
Flight equipment 
Ground equipment 
Hangar buildings and improvements to leased property 
Furniture and fixtures 
16,780,907 
1,500,631 
2,255,154 
389,289 
14,285,169 
1,376,434 
626,950 
357,418 
Less accumulated depreciation 
20,925,981 
8,291,930 
16,645,971 
7,215,851 
Advance payments on flight equipment (Note 5) 
12,634,051 
2,551,645 
9,430,120 
15,185,696 9,430,120 
DEFERRED CHARGES 
Unamortized route development costs 
Unamortized discount and expense on debt ... 
Rentals and other 
72,123 
68,088 
245,223 
127,648 
70,593 
261,626 
385,434 459,867 
$23,711,805 $16,972,505 
The accompanying notes are an integral part of this statement. 
 Comparative 
Balance 
Sheet 
December 31, 
1965 and 1964 
Liabilities 
CURRENT LIABILITIES 1965 
Current maturities of long-term debt $ 1,458,553 
Accounts payable 3,533,392 
Tickets outstanding 165,752 
Taxes withheld or collected as agents 433,357 
Income taxes (Note 8) 299,192 
Accrued liabilities 
Salaries and wages 1,065,876 
Payroll and property taxes 141,438 
Other 437,568 
Total current liabilities 7,535,128 
LONG-TERM DEBT (Note 2) 
Notes payable to banks . 
Other notes payable . 
Subordinated debentures 
Less current maturities 
9,691,000 
2,093,483 
851,500 
12,635,983 
1,458,553 
11,177,430 
STOCKHOLDERS' EQUITY 
Common stock--authorized, 10,000,000 shares of $.20 par value; 
issued and outstanding, 8,732,038 shares (Notes 2 and 7) . 1,745,408 
Paid in capital 295,246 
2,041,654 
Retained earnings 2,957,593 
4,999,247 
COMMITMENTS AND CONTINGENT LIABILITY (Notes 5 and 6) - 
$23,711,805 
1964 
$ 1,348,065 
2,775,408 
161,465 
368,792 
538,777 
737,180 
122,866 
594,907 
6,647,460 
6,631,000 
330,115 
851,500 
7,812,615 
1,348,065 
6,464,550 
1,745,408 
295,246 
2,041,654 
1,818,841 
3,860,495 
$16,972,505 
15 
 NORTH CENTRAL AIRLINES, INC. 
Comparative Statement of Earnings 
Years ended December 31, 1965 and 1964 
OPERATING REVENUES 
Passenger 
Mail 
Public service revenue (after excluding $760,000 and $600,000 
respectively of profit-sharing to government) (Notes 1 and 3) 
Freight and express 
Excess baggage 
Non-scheduled transport service 
Other 
Total operating revenues 
OPERATING EXPENSES 
Flying operations 
Maintenance 
Passenger service 
Aircraft and traffic servicing 
Promotion and sales 
General and administrative 
Depreciation and amortization 
Total operating expenses 
Operating profit 
OTHER EXPENSE (INCOME) 
Interest 
Sundry (net) 
Total other expense (income) 
Earnings before income taxes 
INCOME TAXES (Note 8) 
States 
Federal, less investment credits of $56,974 
and $47,201 respectively 
NET EARNINGS (Note 3) 
The accompanying notes are an integral part of this statement. 
1965 1964 
$23,720,203 $20,002,281 
571,921 476,454 
7,199,418 7,274,370 
1,811,578 1,370,356 
125,531 140,315 
357,515 358,200 
104,865 92,801 
33,891,031 29,714,777 
8,362,924 7,456,027 
6,993,952 6,210,115 
1,684,747 1,440,949 
8,156,746 7,358,512 
2,773,774 2,297,751 
1,354,970 1,206,389 
1,997,488 1,712,800 
31,324,601 27,682,543 
2,566,430 2,032,234 
437,064 
(23,151) 
413,605 
(112,234) 
413,913 301,371 
2,152,517 1,730,863 
37,000 46,500 
976,765 839,799 
1,013,765 886,299 
$ 1,138,752 $ 844,564 
Comparative Statement of Retained Earnings 
Years ended December 31, 1965 and 1964 
Retained earnings--beginning of year (note 3) 
Net earnings for the year (note 3) 
Retained earnings--end of year 
The accompanying notes are an integral part of this statement. 
1965 1964 
$ 1,818,841 $ 974,277 
1,138,752 844,564 
$ 2,957,593 $ 1,818,841 
16 
 Notes to financial statements 
December 31,1965 
Auditor's Opinion 
1. PUBLIC SERVICE REVENUE--Public service revenue received from the Federal 
Government is subject to review and adjustment by the Civil Aeronautics Board. 
Settlement has been completed through the year 1963. The year 1964 is presently 
under review with provision having been made for all known adjustments. 
2. LONG TERM DEBT--Notes payable to banks consist of three 51/2% notes having 
an unpaid balance of $6,391,000, and three 5%% notes totaling $3,300,000. The 
51/2% notes are due in varying installments with the final payment due in 1970. The 
5V4% notes are part of a $17,000,000 loan commitment with installments payable 
from 1967 through 1976. 
A commitment fee of 14 of 1% per year is payable on the unused portion of the 
$17,000,000. Of the $3,300,000 drawn to date, an amount of $2,444,031 was depos 
ited on five Douglas DC-9 aircraft to be delivered in 1967 and 1968. 
Among other things, the bank agreements require that working capital be main 
tained at an increasing level beginning with $1,500,000 prior to July 1, 1966 to 
$2,000,000 on July 1,1968, exclusive of amounts due noteholders.The notes payable 
to banks are secured by all aircraft and related spare parts owned or to be acquired. 
Other notes payable include $1,725,000 of bonds for airport facilities at Wayne 
County, Michigan. Interest ranges from 3.25% to 5%, with annual payments of 
approximately $110,000 from 1966 to 1990. 
The 5y2 
% convertible debentures are subject to redemption in whole or in part at 
the election of the Company at any time prior to June 1, 1978. The holders have the 
option to convert the principal into common stock at rates ranging from $6.50 per 
share to June 1, 1966, to $10.00 per share from June 2, 1971--1978. The debentures 
are subordinated to other long term debt. 
3. RESTATED NET EARNINGS FOR 1964--Net earnings for the year ended December 
31, 1964 have been restated to reflect a net adjustment resulting from settlement of 
public service revenue for the years 1961, 1962 and 1963. The net adjustment, after 
tax credits, of $225,205 increases previously reported net earnings for 1964 from 
$617,359 to $844,564. 
4. PENSION PLANS--The Company has non-contributory pension plans covering a 
majority of its employees. Costs for the year 1965 approximated $834,000 as com 
pared with $418,000 for 1964. Estimated past service liability as of December 31, 
1965 was $1,055,000. 
5. COMMITMENTS--A purchase commitment exists for five Douglas DC-9 jet aircraft 
including spare parts at a cost of approximately $20,000,000. Delivery of three is 
scheduled for early 1967 and two for early 1968. The company is also committed for 
delivery of two used Corivair 440's in 1966 along with spare parts at a cost of approxi 
mately $1,000,000. 
Major lease facilities exist at airports in Minneapolis/St. Paul, Chicago, Detroit and 
Milwaukee. Annual rentals at these locations, including landing fees, approximate 
$825,000. 
6. VACATION PAY--The Company records vacation pay as a period charge. The un 
recorded obligation as of December 31, 1965 was estimated at $260,000, net of 
income tax credits. 
7. STOCK OPTION PLAN --During the year a total of 250,000 shares of authorized 
but unissued common stock were reserved under a qualified stock option plan for 
officers and key employees of the company. A total of 220,000 of the reserved shares 
were granted prior to the year end at a price of $3.05208 per share. Options expire 
five years after the date of grant. The plan is subject to stockholder approval. 
8. INCOME TAXES--Federal income tax returns have been examined and settled 
through 1963. 
ALEXANDER GRANT & COMPANY 
CERTIFIED PUBLIC ACCOUNTANTS 
Stockholders and Directors 
North Central Airlines, Inc. 
We have examined the balance sheet of 
NORTH CENTRAL AIRLINES, INC. (a Wiscon 
sin corporation) as of December 31, 1965 and 
1964 and the related statements of earnings 
and retained earnings for the years then 
ended. Our examination was made in ac 
cordance with generally accepted auditing 
standards and accordingly includes such tests 
of the accounting records and such other 
auditing procedures as we considered neces 
sary in the circumstances. Since it was not 
practicable to confirm receivables from 
United States Government departments and 
agencies, we satisfied ourselves with respect 
to such receivables by means of other audit 
ing procedures. 
In our opinion, the accompanying balance 
sheet and statements of earnings and retained 
earnings present fairly the financial position 
of North Central Airlines, Inc. at December 
31, 1965 and 1964 and the results of its op 
erations for the two years then ended, in 
conformity with generally accepted account 
ing principles applied on a basis consistent 
with that of the preceding year. 
Alexander Grant & Company 
Milwaukee, Wisconsin 
February 9, 1966 
Five-year financial summary 
OPERATING REVENUES 1965 1964 1963 1962 1961 
Passenger $23,720,203 $20,002,281 $18,064,524 $16,750,086 $15,681,163 
Public Service Revenue 7,199,418 7,274,370 7,644,080 8,286,733 7,613,159 
Other 2,971,410 2,438,126 2,168,100 1,833,426 1,546,429 
TOTAL $33,891,031 $29,714,777 $27,876,704 $26,870,245 $24,840,751 
OPERATING EXPENSES 
Direct Expenses $15,356,876 $13,666,142 $13,076,180 $12,858,386 $12,394,337 
Indirect Expenses 13,970,237 12,303,601 11,812,690 11,561,629 10,741,476 
Depreciation and Amortization 1,997,488 1,712,800 1,541,857 1,183,464 1,072,902 
TOTAL $31,324,601 $27,682,543 $26,430,727 $25,603,479 $24,208,715 
Operating Profit 
Non-operating Income and 
2,566,430 2,032,234 1,445,977 1,266,766 632,036 
Expenses, Net (413,913) (301,371) (403,549) (335,014) (269,483) 
Net Profit Before Taxes $ 2,152,517 $ 1,730,863 $ 1,042,428 $ 931,752 $ 362,553 
Income Taxes 1,013,765 886,299 520,715 491,812 158,253 
Net Profit After Taxes $ 1,138,752 $ 844,564 $ 521,713 $ 439,940 $ 204,300 
See Note 3 above for explanation of Restated Net Earnings. 
 Advertising 
program 
N 
ORTH CENTRAL'S progressive advertising pro 
gram received wide coverage in 1965. The addi 
tion of a colorful series of contemporary travel 
posters focused attention on the vacation areas of the Route 
of the Northliners. 
Television, newspaper, and magazine advertising was 
expanded considerably during the year. 
Radio advertising took a sports turn in 1965. North 
Central co-sponsored broadcasts of the Minnesota Vikings 
football games which were carried on 19 stations in a three- 
state area. The airline also scheduled spot commercials 
throughout the Minnesota Twins baseball season. 
All-expense ski package tours were developed by the 
company in 1965, in cooperation with Pine Mountain and 
Big Powderhorn Mountain Lodges, in the Upper Peninsula 
of Michigan; and Terry Peak Lodge, in the Black Hills of 
South Dakota. Attractive brochures were widely distributed 
to promote weekend and vacation travel to these ski areas. 
NORTNCEIHMl 
a Mat iki -aotio* Ao&datf 
BIG POWDERHORN 
MOUNTAIN 
WtWUN BtSStMf ft IRONWOOO W1W 
NORTH CtHTRAL AfRUNES 
NORTflCENIRAl 
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TERRY PEAK 
If AO -- Df. ATWOOD S OAK 
NORTH CENTRAL A/RLINES 
PINE 
MOUNTAIN 
IRON MOUNTAIN MICHIGAN 
NORTH CENTRAL AIRLINES 
FOB A REAL SKI-ACTION HOLIDAY 
NORTHCENM 
FLY NORTH CENTRAL AIRLINES 
18 
 OHIO  MICHIGAN INDIANA  ILLINOIS  WISCONSIN MINNESOTA IOWA NEBRASKA SOUTH DAKOTA NORTH DAKOTA CANADA 
 N 
ORTH CENTRAL AIRLINES has maintained 
a perfect safety record during its 18 years of 
scheduled operation. 
The company again received an award from the National 
Safety Council for having no fatal accidents during the 
previous year. 
In 1965, North Central was also presented with a special 
certificate from the Oshkosh, Wisconsin Safety Council. 
This award recognizes the company's safety record as one 
of the finest for all types of industry in the Oshkosh area. 
The Tri-County Safety Award from Oconto and Mari 
nette, Wisconsin and Menominee, Michigan was given to 
the airline during 1965 for leadership in the field of safety. 
Since inaugurating service on Eebruary 24, 1948, North 
Central has carried nearly 12 million passengers and flown 
1,918,000,000 passenger miles without a single fatality or 
injury to passengers or crew members. 
This outstanding record demonstrates dramatically the 
dedication of the company's employees to performing their 
daily work efficiently and their conscientious efforts to 
assure passenger safety and comfort. 
Safety 
OSHKOSH INDUSTRIAL SAFETY COUNCIL 
AWARD OF MERIT 
FOR OUTSTANDING ACHIEVEMENT IN SAFETY 
presented to 
NORTH CENTRAL AIRLINES, INC 
20 
  i-. 
 North Central Airlines, Inc. 
6201 TMrty-Fourti Avenu South 
MINNEAPOLIS, MINNESOTA 55450