ANNUAL REPORT 
NORTH CENTRAL AIRLINE 
 NORTH CENTRAL AIRLINES, INC. 
GENERAL OFFICES: 6201 Thirty-Fourth Avenue South, Minneapolis, Minnesota 55450 
BOARD OF DIRECTORS 
*HAL N. CARR, Chairman CHAN GURNEY 
D. E. CROOKER *SAMUEL H. MASLON 
*G. F. DECOURSIN A. JAMES MUELLER 
*Executive Committee 
JAY PHILLIPS 
MORTON B. PHILLIPS 
JOSEPH E. RAPKIN 
H. P. SKOGLUND 
KENNETH B. WILLETT 
ROBERT G. ZELLER 
MANAGEMENT 
HAL N. CARR Chairman of the Board and President 
R. H. BENDIO Vice President 
L. J. KEELY .... Vice President - Maintenance-Engineering 
T. M. NEEDHAM Vice President - Ground Operations 
ARTHUR E. SCHWANDT Vice President - Industrial Relations 
BERNARD SWEET Vice President - Finance 
G. F. WALLIS 
D. F. MAY 
JOHN P. DOW 
G. J. MILLER 
CHARLOTTE G. WESTBERG 
DAVID E. MORAN . . . . 
Vice President - Flight Operations 
Treasurer 
Secretary 
Assistant Secretary 
Assistant Secretary 
. . Director - Traffic and Sales 
STOCK TRANSFER AGENTS 
Northwestern National Bank of Minneapolis; Minneapolis, Minnesota 
Irving Trust Company; New York, New York 
 To our stockholders, 
employees, and friends: 
March 3, 1967 
We are pleased to report that 1966 was an exceptional year of growth for North Central Airlines. 
The company achieved the largest profit in its 19-year history on record revenues, and led the 
entire regional airline industry in passenger traffic. 
Net earnings of $1,155,000 were attained on gross revenues of $39,613,000. This was accomplished 
in spite of a $1,432,000 reduction in public service revenues. Earnings, along with depreciation 
charges of $2,253,000, developed cash flow of $3,408,000. 
North Central reached the all-time high for regional airlines by enplaning 2,056,209 passengers 
in 1966. This reflects a gain of 27 per cent over 1965 which was the company's best previous 
year. Cargo--including air freight, express, and mail--was up 28 per cent as 52,278,000 pounds 
were flown. 
The airline continued its excellent operating performance and maintained its perfect safety record 
while carrying this greatly increased passenger and cargo traffic. In 1966, North Central com 
pleted over 98.4 per cent of its 17,200,000 scheduled miles. 
In August 1966, the company took another step forward in its equipment modernization program 
by announcing that its Convair 440 aircraft would be converted to 580 prop-jets. The 31-aircraft 
plan calls for the initial conversion of 20 Convairs, with an option on the other 11. Two Convair 
580's have already been delivered in 1967 to be put in operation April 1, and Douglas DC-9 fan jet 
service will be inaugurated in the Summer. North Central has 10 of the 100-passenger jets on order, 
and has secured an option for five more. By 1968, the airline will have an all jet-powered fleet. 
North Central continued its aggressive route development program by applying for several new 
routes and the lifting of operating restrictions on existing segments. In December, the Civil 
Aeronautics Board issued notice of a proposed policy change which would permit North Central 
and the other regional airlines to operate nonstop flights between previously restricted points. 
This proposal is one of the most important decisions ever made by the Board regarding the regional 
carriers and would strengthen the company's applications for changes in service pattern. 
As management reviews the company's success in 1966, we want to express our appreciation to 
our employees for their dedicated efforts in serving the traveling public, to our stockholders for 
their loyal support, and to our many passengers for flying the "Route of the Northliners." 
We are all looking forward to 1967--the year of the airline's entry into the jet age. Anticipated 
record traffic and revenues, along with the favorable effect of jet operating economies, should 
yield the greatest profits in the company's history and make 1967 the most successful year for 
North Central. 
Sincerely, 
HAL N. CARR 
Chairman of the Board and President 
 REVENUES (MILLIONS OF DOLLARS) 
^ 
 
Annual Report 1966 
$35 
Financial 
review 
$25 
N 
ORTH CENTRAL AIRLINES attained record revenues of 
$39,612,671 in 1966--a 17 per cent increase over 1965. The 
$5,721,640 gain in revenues was the greatest in the company's 
19-year history. 
Operating expenses were $37,296,439, and included $2,253,361 in 
depreciation charges. As a result, the company had an operating profit of 
$2,316,232. The net profit of $1,154,611, after income taxes of $744,792, 
was the largest yet recorded by the airline. These net earnings, together 
with the $2,253,361 of depreciation, produced cash flow of $3,407,972 
in 1966. 
The company earned the $1,154,611 profit although its public service 
revenues were reduced by $1,431,530. This profit was made possible by 
developing record commercial revenues and intensifying the company's 
cost control program. For the sixth consecutive year, North Central was 
in a profit-sharing position with the Federal Government under the class 
rate for regional airlines. 
With the favorable results of 1966, the company enters its jet age in a 
strong financial position. 
2 
 Traffic 
growth 
I 
N 1966, North Central led the entire regional airline 
industry in traffic when it enplaned 2,056,209 pas 
sengers. This was a 27 per cent increase over the 
1,616,900 passengers carried in 1965. The 439,309 
passenger gain was the highest the company has ever 
achieved in a year. 
The Northliner fleet flew 354,632,977 passenger miles 
-- 30 per cent ahead of 1965. 
Three other regional airline milestones were reached 
during the year. On August 19, the company carried 
9,343 passengers, for a single-day record. During August, 
230,215 passengers flew on North Central for a monthly 
industry record. The Chicago station alone boarded 66,539 
passengers in August, to become the first regional airline 
station to pass the 60,000 mark in one month. 
Some 88,500 military standby passengers took advan 
tage of the company's special half-fare, space available 
plan. In this second full year for the reduced rate, a 
passenger increase of 25 per cent was reached. 
North Central also operated 350 charters and 116 
scenic flights, which added 310,892 more plane miles. The 
17,602 charter passengers flew to 31 states and three 
Canadian provinces, while 4,325 people took scenic flights 
over cities on the airline's system. 
Excellent cargo gains were achieved in 1966 as the 
company carried a record 52,278,042 pounds of air freight, 
express, and mail--28 per cent ahead of the previous year. 
Total cargo ton miles flown were 4,884,937, also 28 per 
cent over 1965. Mail ton miles of 1,031,765 showed a 
substantial increase of 45 per cent, and freight and express 
were both up 24 per cent. Freight reached 2,579,716 ton 
miles flown, and express, 1,273,456. 
Besides setting new passenger records for the industry 
and carrying the largest cargo volume in its history, North 
Central maintained its perfect 19-year safety record. Since 
inaugurating service in 1948, the company has carried 
13,734,586 passengers and flown 2,272,368,240 passenger 
miles without a single fatality or injury to passengers or 
crew members. 
Operating 
performance 
T 
HE COMPANY maintained its outstanding op 
erating performance in 1966, as 98.4 per cent of 
its 17,235,294 scheduled miles were flown. This 
completion factor again places North Central among 
the leaders of the 24 domestic airlines in operating 
performance. 
This enviable achievement was accomplished while 
the company handled the largest passenger and cargo 
traffic in its history, and experienced many months of 
severe weather conditions over the system. 
A major factor in this high level of performance was the 
company's continuous and exacting maintenance. In 
1966, North Central made 191,523 actual departures. 
Only 166 departures, or less than one-tenth of one per 
cent, were cancelled for mechanical reasons, and less 
than one per cent of the departures were delayed for 
mechanical reasons. 
"Operation Cold Front," the company's winterization 
program, was effective again in 1966. Station and main 
tenance personnel carried out a comprehensive prepara 
tory plan to convert ground support equipment to winter 
operating conditions. Cold weather operational techniques 
were reviewed at all of North Central's stations. To 
further improve the program, the latest type of mobile 
aircraft-deicing units were added this winter at strategic 
points on the system. 
North Central's operating performance during the win 
ter months has been so impressive that a five-man team 
from Linjeflyg Airlines in Sweden visited the company's 
general office and main operations base in Minneapolis/ 
St. Paul to study "Operation Cold Front." Linjeflyg 
operates under climate conditions similar to those that 
confront North Central. 
To supplement the scheduled flights during peak 
periods, 1,674 extra sections were operated in 1966 to 
meet the needs of the traveling public. An additional 
672,315 plane miles were flown on these trips. 
The company's high standard of performance reflects 
the dedication of all North Central's employees to their 
job of providing scheduled airline service. 
North Central carried over two million passengers in 1966 to lead the regional airline industry. At O'Hare International 
Airport (pictured above). North Central also set a monthly record by boarding 67,000 passengers in August. 
3 
 Jet program 
E 
XTENSIVE PLANNING and preparations have been 
made for North Central's 1967 entry into the jet age. 
The company will take on a "New Look" with the 
inauguration of Douglas DC-9 fan jet and Convair 580 prop-jet 
service on its 7,000-mile route system. 
Ten of the 100-passenger fan jets are on order. In 1966, an 
option was obtained for five more DC-9's. North Central's 
equipment program also calls for the conversion of 20 of the 
company's 31 Convair 440's to 580 prop-jets, with an option 
on the other 11. 
The company will benefit financially from this flight equip 
ment program due to the traffic-generating ability of the jets 
and the corresponding reduction in unit costs which result from 
jet operating efficiencies. 
With the addition of the DC-9 and 580 aircraft, Northliner 
passengers will receive the finest regional airline service. 
Convair 580 
prop-jets 
Convair 580 prop-jet service will 
be inaugurated on April 1. 
PROGRESSIVE STEP in North Central's equipment 
/ modernization program was taken in August 1966, 
jk_ when the company announced plans to convert 20 of 
its 31 Convair 440 aircraft to 580 prop-jets, with an option on 
the other 11. 
The Convair 580, equipped with two Allison prop-jet engines 
of 3,750-horsepower each, will fly 100 miles an hour faster than 
the Convair 440. The 580 reaches a comfortable cruising altitude 
of 10,000 feet in only five minutes and gives a smooth, quiet ride. 
The jet-powered Convair 580's, like the DC-9's, will have the 
latest solid state radio and navigational equipment. Also, the 
jet "New Look" will be featured with an aqua, blue, and gold 
exterior design and an interior with alternating aqua and gold 
seats accented by beige walls and ceiling. 
The Allison turbine engine has been in scheduled airline 
operation for several years, and more than 7,000 are in use 
today. These engines have logged more than 22 million hours 
of flying time, with an extremely high reliability record. Also, 
because of its efficiency, this turbine engine will substantially 
reduce operating costs per mile. 
Two of the Allison-powered Convairs will go into scheduled 
service on April 1, two more on April 30, and two in June. 
Thereafter, the prop-jets will be added at an approximate rate 
of one a month until the program is completed. The 580 aircraft 
allows North Central to increase its available seat miles and 
provide improved schedules for its passengers. 
The Convair 580's, combined with the DC-9 fan jets and the 
phase-out of the DC-3's, will give the airline an all jet-powered 
fleet in 1968. 
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T 
HE INTRODUCTION of Douglas DC-9 fan jets in 
1967 will bring a new dimension of speed and comfort 
to the airline's passengers. The company announced its 
10-jet program in July 1965 and indicated that the DC-9 was 
the most suitable jet aircraft for North Central's operation. 
The factors considered were capacity, speed, range, and design 
features; operating costs and purchase price; and adaptability 
of the plane to the airline's route system and airport runways. 
During 1966, the company secured an option on five more of 
the DC-9 Series 30. 
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 and 
overall length is 119.3 feet. 
North Central's "New Look" will be apparent when the sleek 
jetliner appears at airports across the system. In addition to the 
distinctive high-level T-tail and the two rear-mounted engines, 
the DC-9 will have a new aqua, blue, and gold exterior color 
scheme. The striking and unique interior will feature alternat 
ing aqua and gold seats, with beige walls and ceiling. 
All first-class service will be offered on the jets, with two 
stewardesses in attendance. The DC-9 features "big jet" roomi 
ness, outstanding climate control comfort, and a smooth ride. 
Seating facilities for 100 passengers in the spacious cabin 
have exceptional head, shoulder, and leg room. Another feature 
of the new jet is the unexcelled lighting and window view. 
Travelers will enjoy all the luxury expected in the jet age. 
During 1966, North Central employees have received intensive 
training in jet operations. When DC-9 service is inaugurated 
in the Summer of 1967, every phase of the airline's operation 
will be ready for a smooth and efficient transition. 
Douglas DC-9 100-passenger fan jets will be 
joining the Northliner fleet in 1967. 
Douglas DC-9 
fan jets 
 Improved services 
N 
ORTH CENTRAL'S service to the traveling 
public was increased in 1966 by the addition 
of two more Convair 440's to replace Douglas 
DC-3's and by improved utilization of all flight equipment. 
The 736,044,776 seat miles flown during 1966 was 25 
per cent ahead of 1965. Of these seat miles, over 90 per 
cent were operated with pressurized Convairs. There 
are 31 Convairs and 15 DC-3's in North Central's fleet. 
A second "Cargoliner" went into operation in 1966, 
extending all-cargo flights to eight new cities. This spe 
cialized service provides overnight delivery of cargo to 20 
cities on the airline's system. The Cargoliners, equipped 
to carry 7,000 pounds of air freight, express, and mail, 
supplement the cargo capacity on North Central's regu 
larly scheduled flights. 
North Central's service to the shipping public was also 
improved when the company acquired space in TWA's 
air cargo building at O'Hare International Airport, 
Chicago. Included are a customer service counter, office 
facilities, warehouse space, and dock area. North Central 
personnel staff the cargo office, handle customers and 
interline transfers to other carriers, and load and unload 
company aircraft, while TWA moves all freight within 
the air cargo building. 
1966 marked the culmination of North Central's five- 
year program to establish a Reservations Center capable 
of handling the company's phenomenal growth and an 
electronic reservations system adequate for meeting future 
expansion. The completion of this program became even 
more important with plans to add jet aircraft so that 
experience could be gained in the new reservations sys 
tem before the company moved into its jet age. 
The program began with a series of consolidations of 
reservations offices into Milwaukee. Then new quarters 
were acquired and facilities expanded to handle the trans 
fer of the consolidated Chicago office to the Milwaukee 
Reservations Center. Next came the company's early tie- 
in with the Electronic Switching System--a cooperative 
industry effort to speed interline teletype messages--and 
the consolidation of additional cities. Early in 1966, a new 
Call Distributor System was installed at the Reservations 
Center to improve telephone answering service by greatly 
increasing the available telephone lines and automatically 
directing calls to an available agent. Also, reservations 
service for six more cities was added to the Center. 
In April 1966, North Central's electronic reservations 
system became a reality, as the company was linked to 
Eastern Air Lines UNIVAC 490 computer. The Center 
now provides instantaneous reservations and flight infor 
mation to nearly 70 per cent of North Central's passengers 
and 90 per cent of the Center's interline requests, repre 
sented by 11 airlines. In addition, these 11 airlines can 
obtain immediate reservations information on all North 
Central flights. 
In its first eight months of computerized operation, the 
Reservations Center processed 4,662,000 "agent trans 
actions" for the 1,465,000 passengers carried. The Center 
itself, by handling 1,031,000 incoming telephone calls 
and 1,866,000 North Central and interline teletype 
messages, produced 913,000 passengers in this period. 
The new electronic reservations system will continue to 
be improved and expanded to handle the increased seat 
availability which jet service will bring. 
To speed up ticketing services at airport and city ticket 
offices, special teletype equipment was installed. Four 
regional passenger service manager positions were created 
for better supervision of ticket counter and gate operations. 
To emphasize North Central's "New Look" in 1967, 
stewardesses and senior passenger service agents were 
outfitted with newly designed uniforms in corporate colors. 
The high-fashion suit for stewardesses is in turquoise, with 
white piping and button trim. Senior passenger service 
agents are now easily identifiable in their new gold sport 
coats and black trousers. 
Services offered by North Central have been given ex 
tensive coverage with the traveling and shipping public. 
Some 18,000 personal sales calls were made during the 
Stewardesses and Senior Passenger Service Agents have 
taken on North Central's "New Look" for the jet age. 
6 
Five "speedways" will permit second-level loading 
for jet operation at O'Hare International Airport. 
 year, and over 200 speeches and group tours were given 
to tell the North Central story. The company's color 
movie, "The Northliner," was shown to more than 100 
civic, educational, and airline groups. Several new sales 
positions were established, bringing North Central's sales 
staff up to four regional managers, an agency/interline 
manager, and 17 district managers and representatives. 
The airline expanded its in-flight service, as dinner and 
luncheon menus were completely changed to include a 
greater variety of foods and beverages. During the summer 
months, complimentary beer was served on more flights. 
New ground service equipment was purchased during 
the year to improve the Northliners' reliability and com 
fort. Four new mobile air conditioning units, along with 
existing ones, are used to cool aircraft on the ground 
between flights, at the company's larger stations. 
Hydraulically-operated deicing units are now in opera 
tion at several points on North Central's system to help 
keep winter flights on schedule by quickly deicing air 
craft. Bought for jet operations, these larger units can 
also be used for washing and servicing the planes. 
In line with the company's policy of using the most 
efficient and economical equipment, a new IBM System/ 
360, Model 40 data processing installation was placed in 
service in May. This system now processes payroll; ticket, 
cargo, and mail billings; financial statements; statistical 
reports; inventory control records; and maintenance in 
formation. It consists of a central processor, a paper tape 
reader, a card reader and punch, high speed printer, two 
magnetic tape units, and three disk drive units. 
In maintenance and engineering, aircraft records, blue 
prints, and other departmental information have been 
transferred to microfilm. This process permits greatly re 
duced storage area and efficient retrieval of the thousands 
of documents on aircraft maintenance. 
Construction and modernization of facilities have been 
accomplished at many stations on North Central's system. 
During 1966, new terminal buildings were completed and 
put into operation at airports serving Bismarck/Mandan, 
North Dakota; Detroit, Benton Harbor/St. Joseph, Mich 
igan; and Madison, Wisconsin. In addition, work has 
started on a new terminal building for Saginaw/Bay City/ 
Midland, Michigan. 
Extensive terminal remodeling was completed at air 
ports serving Kalamazoo and Hancock/Houghton, Mich 
igan; Menominee, Michigan/Marinette, Wisconsin; 
Oshkosh/Appleton and Rhinelander, Wisconsin; and 
South Bend, Indiana. Other stations with remodeling 
projects scheduled to be completed in 1967 are: Inter 
national Falls, Bemidji, and Brainerd, Minnesota; Rapid 
City and Watertown, South Dakota; Omaha, Nebraska; 
and Chicago. 
New passenger loading facilities are being constructed 
by the company at Chicago's O'Hare International Air 
port to add second-level gates and holding areas. These 
will be completed when jet operations begin. Featured are 
five "speedways," which are ramps that will extend 
from the gates to DC-9 aircraft and permit passengers 
to be protected from the weather as they enter and leave 
the planes. 
North Central and several other airlines moved their 
operations from Willow Run Airport at Ypsilanti, Mich 
igan, to expanded terminal facilities at Detroit Metro 
politan Airport in 1966. North Central's new $1,725,000 
Detroit maintenance base also became operational. The 
new facility, which can accommodate three DC-9 fan jets 
simultaneously, serves the eastern portion of the airline's 
system. It is the only airline hangar in the world with a 
High Expansion Foam System for fire extinguishing. 
With the tremendous growth North Central has 
experienced, new headquarters facilities have become a 
necessity. In December 1966, the Metropolitan Airports 
Commission approved a new $15-million general office 
and main operations base for North Central at the 
Minneapolis-St. Paul International Airport. Construction 
is scheduled to begin in the Spring of 1967, and be 
completed in 1968. 
The new complex will replace all of the company's 
present facilities now located in seven buildings at the 
airport. In addition to permitting greater efficiency, the 
structures are designed for expansion to meet North 
Central's space requirements for the next 20 years as the 
airline moves ahead in the jet age. 
North Central will continue to make improvements in 
service, equipment, and facilities in 1967 to provide the 
best regional airline service possible. 
North Central's new maintenance base at Detroit Metropolitan Airport 
is now operational. It can accommodate three DC-9's simultaneously. 
7 
 Route 
development 
D 
URING THE YEAR, significant applications 
were made by North Central to the Civil Aero 
nautics Board for new routes and the lifting of 
operating restrictions on existing segments. These appli 
cations could add four new states and one Canadian 
province to the company's system. 
In one of the most important decisions the C.A.B. has 
made regarding the regional airlines, the Board issued 
notice in December 1966 of a proposed policy change 
which would permit these carriers to operate nonstop 
flights between previously restricted points. This program 
would greatly increase the operating authority of the 
regionals and strengthen North Central's applications for 
changes in service pattern. 
At present, North Central serves 90 cities in 10 Midwest 
states and Canada over a 7,000-mile route system. 
NORTH CENTRAL IS CURRENTLY 
INVOLVED IN THE FOLLOWING 
ROUTE PROCEEDINGS: 
OPERATING FLEXIBILITY APPLICATIONS 
The C.A.B. issued notice in December of a proposed policy 
change which would permit North Central and the other local 
service carriers to operate nonstop flights between previously 
restricted points on their systems. Under the policy change, the 
local airlines could receive nonstop authority between points 
where competitive trunk line services are involved. 
In making the announcement, the C.A.B. noted that "it is 
appropriate to adopt a more liberal policy in approving changes 
in service patterns. It is clear," the C.A.B. statement continued, 
"that the present operational limitations in the local service 
carriers' route systems do not offer sufficient opportunities to 
take advantage of the lower unit direct operating cost charac 
teristics of the new jet technology, and thereby reduce subsidy." 
Subsequent to that announcement, North Central applied for 
nonstop service between Minneapolis/St. Paul and Omaha and 
between Milwaukee and Detroit. 
Earlier in the year the company requested authorization for 
shuttle service between Detroit and Cleveland. An application 
has also been filed to operate between Minneapolis/St. Paul and 
Chicago with two stops, Milwaukee with one stop, and Madison 
with one stop. There would be no reduction in the service now 
provided by North Central to intermediate cities on this segment. 
TORONTO SERVICE 
The Bilateral Air Transport Agreement between the United 
States and Canada was 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. 
North Central has applications on file to operate Detroit- 
Toronto and Chicago-Toronto nonstop service. Following public 
hearings and initial decisions by the C.A.B. examiners in both 
the Detroit-Toronto and Los ngeles-Chicago-Toronto cases, 
the parties involved filed briefs and presented oral arguments 
to the Board. Final decisions in both cases are expected to be 
made early in 1967. 
CLEVELAND-BALTIMORE 
During 1966, North Central applied for authority to operate 
between Cleveland and Baltimore, via the intermediate city of 
Pittsburgh. This segment of 316 miles would improve the eastern 
portion of the system by adding the two major cities of Balti 
more and Pittsburgh. 
A North Central Convair 440 is serviced at Green Bay, one of the 
90 cities on the airline's 7,000-mile route system. 
OMAHA-ST. LOUIS 
North Central filed an application for authority to operate a 
341-mile segment from Omaha to St. Louis nonstop. 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 
The company has applied for a 165-mile route between Omaha 
and Kansas City, Missouri. If approved, this would give the 
company authority to provide nonstop service between the two 
terminals. 
RAPID CITY-OMAHA 
North Central has requested authorization to operate nonstop 
flights between Rapid City and Omaha. Both cities are now 
served by the company, but there is no authority for direct 
flights. The new route would provide faster air transportation 
between the two cities. 
SIOUX FALLS-ROCHESTER-CHICAGO 
The airline has filed an application for a route between Sioux 
Falls, South Dakota, and Chicago--with one intermediate stop 
at Rochester, Minnesota. This new route of 484 miles would 
facilitate air travel from the Dakotas to Rochester and Chicago 
by making single carrier service available to several cities in 
these states. It would also add Rochester to North Central's 
system. 
MINNEAPOLIS/ST. PAUL-DENVER 
A petition by North Central was filed with the C.A.B. in 
September 1966, asking that the Twin Cities-California service 
investigation be revised to include the matter of nonstop 
Minneapolis/St. Paul-Denver authority. Early in 1967 the Board 
denied this petition. However, the company has a separate 
application on file for nonstop service between the Twin Cities 
and Denver which would add 694 miles to the company's sys 
tem. If approved, North Central would make its first entry into 
Colorado and add the major terminal of Denver. 
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 airlines, North Central has applied for a new segment 
between Saginaw/Bay City/Midland, Michigan, and Chicago, 
via Muskegon, Michigan. At the same time, the company re 
filed its application requesting that United Air Lines' certificate 
be amended to delete Flint, Saginaw/Bay City/Midland, 
Lansing, and Muskegon. If the Board acts favorably on this 
application, the company will provide improved replacement 
service. 
8 
 Management development 
I 
N APRIL, North Central Airlines' stockholders 
amended the company's bylaws to enlarge the Board 
of Directors to 12 members. 
In addition to the re-election of the eight incumbent 
directors, the following new members were added to the 
Board: Chan Gurney, Yankton, South Dakota, and 
Samuel H. Maslon, Jay Phillips, and Morton B. Phillips 
of Minneapolis, Minnesota. Their backgrounds of gov 
ernment service and extensive business experience will be 
important to North Central's further growth. 
During 1966, North Central continued its program of 
developing personnel from within the organization to 
meet expanding management needs. In accordance with 
this policy, Gowan J. Miller, Staff Assistant to the Vice 
President-Industrial Relations, was elected an Assistant 
Secretary. David E. Moran, formerly Manager-Adver 
The future 
ORTH CENTRAL looks forward to 1967 with, 
great enthusiasm as the airline prepares to enter 
the jet age. With the introduction of Convair 
580 prop-jets in April 1967 and 100-passenger DC-9 fan 
jets in the Summer, Northliner passengers will be pro 
vided with faster, more comfortable service, and increased 
seat availability. 
Extensive personnel training, acquisition of specialized 
equipment, and improvements of facilities over the system 
will make the airline's transition to jets an efficient one. 
An accelerated advertising and sales program is already 
underway to promote the jet age "New Look" at North 
Central. 
The Civil Aeronautics Board's proposed policy change 
tising and Promotion, was named Director-Traffic and 
Sales, following the death of Frank N. Buttomer, Vice 
President-Traffic and Sales. 
In the Maintenance and Engineering Department, the 
position of Manager-Plant Equipment was established, 
while the Treasury Department added a Supervisor of 
Credit and Collections to handle the company's expanded 
credit program. To further promote North Central's serv 
ices, a Chicago Regional Traffic and Sales Manager and 
a Western Regional Manager were appointed in the 
Traffic and Sales Department; and a Regional Fleet 
Service Manager, in the Ground Operations Department. 
A. D. Niemeyer, North Central Vice President, retired 
in August 1966 after serving the company for over 12 
years in the Flight Operations Department. 
to permit the regional airlines to operate nonstop flights 
between previously restricted points on their systems was 
one of the most important decisions made by the Board in 
1966. Under this proposal, North Central's operating 
authority would be greatly increased, by allowing service 
to additional high-density traffic markets, and the effec 
tiveness of the new DC-9's and Convair 580's improved. 
With jet flight equipment, anticipated route changes, 
and an aggressive sales program, the company expects 
substantial increases in passenger and cargo traffic for 
1967. The additional revenues generated by this traffic, 
along with the operating efficiencies of jet aircraft, should 
result in record profits for North Central again in 1967-- 
as the company enters a new era in its history. 
Construction is scheduled to begin this Spring on North Central's new $15-million 
general office and main operations base at the Minneapolis-St. Paul International Airport. 
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ASHLAND 
LAND 
O'LAKES 
PELLSTON 
BRAINERD 
ICANABA 
RHINELANDER 
ABERDEEN IENOMII 
toRINET 
ALPENA 
JRAVERSE CITY 
WAUSAU 
rATERTOWN GREEN BAY 
LINTONVILLE 
fi-EVE^S POINT 
\lS. mAPIDS 
'MANISTEE 
d-UDINGTON 
BROOKIN' 
SAGINAW 
BAY CITY 
VDLAND 
PIERRE HURON hANITOVTO 
IHEBOYGAN 
OSHKOH 
APPLETaN 
WINONA' 
MITCHELL 
FLINT 
siou; 
MILYVAUKI 
LANSING 
IARBOR, 
BENTON, 
ST. /OSEPH. 
YANKTON 
BATTLE CREEK 
BELO? 
KALAMAZOI 
'SIOUX CITY 
CLEVELANI 
CHICAG1 SOUTH BEI 
PinSBURGH 
DENVER 
KANSAS CITY 
Routes of tlie Nortliliners 
Present routes 
Proposed routes 
Nonstop routes 
PRIMARY NONSTOPS which might be 
authorized under C.A.B. Docket No. 18022 
10 11 
 - 
NORTH CENTRAL AIRLINES, INC. 
Assets 
1966 1965 
CURRENT ASSETS 
Cash $ 1,479,809 $ 1,593,962 
Accounts receivable 
United States Government (Note 1) 1,174,220 1,279,910 
Traffic (Note 2) 2,888,877 2,467,632 
Other 418,210 476,387 
4,481,307 4,223,929 
Flight equipment parts, at average cost (less deterioration 
reserves of $408,577 and $369,592) 1,213,486 1,183,017 
Maintenance and operating supplies 308,532 293,529 
Prepaid expenses and sundry deposits 977,152 846,238 
Total current assets 8,460,286 8,140,675 
OPERATING PROPERTY AND EQUIPMENT-at cost (Note 2) 
Flight equipment 18,970,282 16,780,907 
Ground equipment 2,587,820 1,500,631 
Hangar buildings and improvements to leased property (Note 4) 2,590,410 2,255,154 
Furniture and data processing equipment 1,040,482 389,289 
25,188,994 20,925,981 
Less accumulated depreciation 9,732,414 8,291,930 
15,456,580 12,634,051 
Advance payments on flight equipment (Notes 4 and 7) 8,483,793 2,551,645 
23,940,373 15,185,696 
DEFERRED CHARGES 
Unamortized development costs 218,139 72,123 
Unamortized discount and expense on debt 104,275 68,088 
Rentals and other 222,572 245,223 
544,986 385,434 
$32,945,645 $23,711,805 
The accompanying notes are an integral part of this statement. 
12 
 Liabilities 
CURRENT LIABILITIES 
1966 1965 
Short-term borrowing (Note 2) $ 400,000 $ 
Current maturities of long-term debt 2,497,153 1,458,553 
Accounts payable 4,784,136 3,533,392 
Tickets outstanding 232,018 165,752 
Taxes withheld or collected as agents 309,321 433,357 
Income taxes (Note 8) (73,683) 299,192 
Accrued liabilities 
Salaries and wages 928,054 1,065,876 
Payroll and property taxes 160,177 141,438 
Other 622,942 437,568 
Total current liabilities 9,860,118 7,535,128 
LONG-TERM DEBT (Note 2) 
Notes payable to banks 13,851,000 9,691,000 
Other notes payable 4,694,926 2,093,483 
Subordinated debentures 763,000 851,500 
19,308,926 12,635,983 
Less current maturities 2,497,153 1,458,553 
16,811,773 11,177,430 
STOCKHOLDERS' EQUITY 
Common stock--authorized, 10,000,000 shares of $.20 par value; 
issued and outstanding, 8,755,513 and 8,732,038 shares 
respectively (Notes 2 and 6) 1,751,103 1,746,408 
Paid-in capital (Note 6) 410,447 295,246 
2,161,550 2,041,654 
Retained earnings (Note 2) 4,112,204 2,957,593 
6,273,754 4,999,247 
COMMITMENTS AND CONTINGENT LIABILITY (Notes 4 and 5) -- -- 
$32,945,645 $23,711,805 
13 
 te- 
NORTH 
CENTRAL 
AIRLINES, INC. 
Comparative 
Statement of 
Earnings 
Years ended 
December 31,1966 and 1965 
1966 1965 
OPERATING REVENUES 
Passenger $30,261,479 $23,720,203 
Freight and express 2,215,862 1,811,578 
Mail 743,075 571,921 
Public service revenue (after excluding $300,000 and $760,000 
respectively of profit sharing to government) (Note 1) 5,767,888 7,199,418 
Non-scheduled transport service 432,842 357,515 
Other, including excess baggage 191,525 230,396 
Total operating revenues 39,612,671 33,891,031 
OPERATING EXPENSES 
Flying operations 9,868,343 8,362,924 
Maintenance 8,112,192 6,993,952 
Passenger service 2,130,920 1,684,747 
Aircraft and traffic servicing 9,790,463 8,156,746 
Promotion and sales 3,304,216 2,773,774 
General and administrative 1,836,944 1,354,970 
Depreciation and amortization 2,253,361 1,997,488 
Total operating expenses 37,296,439 31,324,601 
Operating profit 2,316,232 2,566,430 
OTHER EXPENSE (INCOME) 
Interest (Note 7) 485,671 437,064 
Sundry (net) (68,842) (23,151) 
Total other expense (income) 416,829 413,913 
Earnings before income taxes 1,899,403 2,152,517 
INCOME TAXES (Note 8) 
States 37,000 37,000 
Federal, less investment credits of $160,075 and 
$56,974 respectively 707,792 976,765 
744,792 1,013,765 
NET EARNINGS $ 1,154,611 $ 1,138,752 
The accompanying notes are an integral part of this statement. 
Comparative Statements of Retained Earnings and Paid-in Capital 
Years ended December 31,1966 and 1965 
1966 1965 
RETAINED EARNINGS 
Retained earnings--beginning of year (Note 2) $2,957,593 $1,818,841 
Net earnings for the year 1,154,611 1,138,752 
Retained earnings--end of year (Note 2) $4,112,204 $2,957,593 
PAID-IN CAPITAL 
Paid-in capital--beginning of year $ 295,246 $ 295,246 
Excess of proceeds over par value of common stock issued 
upon conversion of debentures (Note 2) 86,680 
Excess of proceeds over par value of common stock issued 
under option (Note 6) 28,521 
_ 
Paid-in capital--end of year $ 410,447 $ 295,246 
The accompanying notes are an integral part of this statement. 
14 
 Notes to financial statements December 31, 1966 
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 years 1964 and 1965 
are presently under review with provision having been made for all known adjust 
ments. 
2. LONG-TERM DEBT AND TEMPORARY BORROWING-Notes payable to banks as 
of December 31, 1966 are as follows: Current Fjna| 
Outstanding 
Maturity Payment Balance 
5%% Notes payable $ 450,000 1976 $ 6,700,000 
5y2 
% Notes payable 1,350,000 1970 5,151,000 
6% Notes payable 350,000 1970 2,000,000 
$2,150,000 $13,851,000 
The 5Vi% and 6% notes are part of a $21,000,000 loan agreement with banks, the 
proceeds to be used principally for the acquisition of DC-9 aircraft. Of the $8,700,000 
drawn to date, $5,989,070 was placed on deposit for future delivery of jet equip 
ment. A fee of Va of 1% per annum is payable on the unused portion of the commit 
ment. Final maturity on the last borrowing under this agreement will be in 1976. The 
notes are currently secured by all aircraft and related parts owned and to be ac 
quired (See Note 4). 
Among other things, the bank agreements require a minimum defined working 
capital and contain certain restrictions regarding the payment of cash dividends 
and capital expenditures. 
Other notes payable consist of (1) $2,207,870 due Douglas Aircraft Company in 
1968 at 6y2% per annum; (2) $1,685,000 on 3.25 to 5% Wayne County Airport bonds 
repayable at approximately $110,000 per year including interest to 1990; and 
(3) miscellaneous equipment purchase notes of $802,056. 
The 5yz 
% 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. Conversion rights 
to common stock exist at rates of $8.00 per share to June 1, 1971 and $10.00 per 
share thereafter to maturity. Conversion rights were exercised for 12,975 shares at 
$6.50 and 500 shares at $8.00 during the year. The debentures are subordinated 
to other long-term debt, and contain certain restrictions as to the payment of cash 
dividends. 
Temporary borrowing of $400,000 is collateralized by certain receivables. 
3. PENSION PLAN--The company has non-contributory pension plans covering 
most of its employees. The total pension expense for the year was $920,000, which, 
in the opinion of the company's actuaries, will result in the development of ade 
quate reserves for the requirements of the plans. 
4. COMMITMENTS--Ten DC-9 aircraft and related spare parts at a cost of approxi 
mately $39,000,000 are on order. Five are scheduled for delivery in 1967 and five 
in 1968. Financing on the second five aircraft has not been completed. The company 
has an option to purchase five additional DC-9's. 
The company has a contract to convert a minimum of 20 of its Convair 440 aircraft 
to Allison 580 turbo-prop configuration, with an option to convert up to 11 more. The 
conversions will be accomplished during 1967 and 1968 at a cost of approximately 
$17,000,000 for the first 20. Financing is to be provided by six per cent notes due 
upon completion of the final conversion. The converted Convairs will become 
security for these notes as well as those mentioned in Note 2. 
Construction commitments at O'Hare International Airport aggregate $1,700,000 
of which $460,000 is reflected in the balance sheet. Minimum rentals under other 
major lease agreements at Minneapolis-St. Paul, Chicago, Detroit and Milwaukee 
approximate $920,000 annually. 
The company is obligated for up to $500,000 in engineering fees for a proposed 
new office building and operational facilities at the Minneapolis-St. Paul Airport. 
This amount is expected to be included in the cost of a long-term lease to be exe 
cuted in 1967. 
5. VACATION PAY--The company records vacation pay as a period charge. The 
unrecorded obligation as of December 31, 1966 was estimated at $282,000 net of 
income tax credits. 
6. STOCK OPTIONS--A total of 250,000 authorized but unissued shares of common 
stock were reserved for officers and key employees of the company under a quali 
fied stock option plan. A total of 220,000 of the reserved shares were granted prior 
to 1966 at a price of $3.05208 per share. Options expire five years after the date of 
grant. During the year, an option was exercised on 10,000 shares. 
7. CAPITALIZED INTEREST--Interest expense for 1966 was reduced by $267,000 
and capitalized principally as aircraft acquisition costs. This compares with $119,000 
for the prior year. 
8. INCOME TAXES--Federal income tax returns have been examined and settled 
through 1963. The balance sheet reflects an overpayment of 1966 Federal income 
taxes of $89,000, less applicable states' taxes due. 
Auditor's Opinion 
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 
Wisconsin corporation) as of December 
31, 1966 and the related statements of 
earnings, retained earnings and paid-in 
capital for the year then ended. Our 
examination was made in accordance 
with generally accepted auditing stand 
ards and accordingly included such tests 
of the accounting records and such other 
auditing procedures as we considered 
necessary in the circumstances. We made 
a similar examination for the preceding 
year. 
In our opinion, the accompanying 
balance sheet and statements of earnings, 
retained earnings and paid-in capital pre 
sent fairly the financial position of North 
Central Airlines, Inc. at December 31, 
1966 and the results of its operations for 
the year then ended, in conformity with 
generally accepted accounting principles 
applied on a basis consistent with that of 
the preceding year. 
Alexander Grant & Company 
Milwaukee, Wisconsin 
February 3, 1967 
Five-year earnings summary 
OPERATING REVENUES 1966 1965 1964 1963 1962 
Passenger $30,261,479 $23,720,203 $20,002,281 $18,064,524 $16,750,086 
Public Service Revenue 5,767,888 7,199,418 7,274,370 7,644,080 8,286,733 
Other 3,583,304 2,971,410 2,438,126 2,168,100 1,833,426 
TOTAL 
OPERATING EXPENSES 
$39,612,671 $33,891,031 $29,714,777 $27,876,704 $26,870,245 
Direct Expenses $17,980,535 $15,356,876 $13,666,142 $13,076,180 $12,858,386 
Indirect Expenses 17,062,543 13,970,237 12,303,601 11,812,690 11,561,629 
Depreciation and Amortization . . . 2,253,361 1,997,488 1,712,800 1,541,857 1,183,464 
TOTAL $37,296,439 $31,324,601 $27,682,543 $26,430,727 $25,603,479 
Operating Profit 
Non-operating Income and 
2,316,232 2,566,430 2,032,234 1,445,977 1,266,766 
Expenses, Net (416,829) (413,913) (301,371) (403,549) (335,014) 
Earnings Before Taxes $ 1,899,403 $ 2,152,517 $ 1,730,863 $ 1,042,428 $ 931,752 
Income Taxes 744,792 1,013,765 886,299 520,715 491,812 
Net Earnings $ 1,154,611 $ 1,138,752 $ 844,564 $ 521,713 $ 439,940 
15 
 PASSENGERS CARGO 
Five years 
of record 
progress 
for North 
Central 
SEAT MILES 1962 '63 '64 '65 '66 
MILLIONS (POUNDS) 
50 
45 
40 
35 
30 
25 
20 
15 
1962 '63 '64 '65 '66 
700 
650 
600 
550 
500 
450 
400 
350 
300 
MILLIONS 
E 
VERY YEAR since North Central began sched 
uled operations in 1948, new passenger records 
have been established. Some 2,056,209 passengers 
were carried in 1966 -- 27 per cent more than in 1965-- 
and 88 per cent greater than five years ago. The passenger 
increase in 1966 was 439,309 over the previous year--the 
largest in the company's 19-year history. 
Aided by the addition of a second Cargoliner last year, 
North Central carried 52,278,042 pounds of cargo, includ 
ing mail, freight, and express. This was 28 per cent ahead 
of 1965. Air cargo has increased 133 per cent during the 
last five years. 
During 1966, 736,044,776 seat miles were flown--25 
per cent ahead of 1965. Compared with five years ago, 
this is a 69 per cent increase. 
With the inauguration of service by DC-9 fan jets and 
Convair 580 prop-jets during 1967, North Central will 
substantially increase its available seats and cargo capac 
ity. As a result, 1967 should be another year of notable 
traffic growth for the company. 
16 
 1966 REGIONAL AIRLINE PASSENGER TRAFFIC 
OOGOQOOOO 000 
o NORTH CENTRAL . . . .2,056,209 
e Allegheny. 2,031,776 
o Trans-Texas . . .1,116,278 Bonanza 848,063 
e Mohawk. . 2,010,285 
o Southern . . .1,051,554 
 Lake Central 708,043 
o Piedmont. 1,606,772 
o Frontier . . .1,031,617 
 West Coast 698,737 
e Ozark. . . . 1,478,455 
e Pacific ... 856,014 
 Central 558,434 
1966 
regional airline 
passenger traffic 
T 
HE regional airline industry car 
ried 16,052,237 passengers in 1966. 
This was a 23 per cent increase 
over the previous year. 
During 1966, North Central led all the 
regional carriers by enplaning a record 
2,056,209 passengers, for an increase of 27 
per cent. In addition, the company set two 
other all-time industry highs--a monthly 
record of 230,215 passengers in August, 
and a daily mark of 9,343 on August 19. 
17 
 The "new look" 
In jet-age 
equipment 
Safety 
T 
HE Air Transport Association 
recently noted that 1966 was the 
safest year for air travel since 
record-keeping began in 1938, and 
North Central takes great pride in con 
tributing to that achievement. During 
1966, while carrying record-breaking 
passenger and cargo traffic over its 
7,000-mile route system, the company 
extended its perfect safety record to 19 
years. 
This achievement demonstrates the 
dedication of the airline's employees in 
performing their work efficiently and 
the continuing efforts of the company 
to assure passenger safety and comfort. 
North Central has been awarded a 
National Safety Council citation every 
year of its operation. 
Since inaugurating scheduled service 
on February 24, 1948, the airline has 
carried over 13,700,000 passengers and 
flown 2,272,400,000 passenger miles 
without a single fatality or injury to 
passengers or crew members. 
Many new training aids were purchased to 
prepare flight crews for North Central's 
entry into the jet age. Among those in use 
are a DC-9 cockpit procedure trainer (pic 
tured), a Transdyne navigational flight di 
rector trainer, and a Convair 580 cockpit 
trainer. 
Passenger service agents at North Central's 
Reservations Center in Milwaukee now use 
UNIVAC "agent sets", which are part of 
the company's new electronic reservations 
system, providing passengers with 
instantaneous reservations and flight 
information. 
Four new Yankee-Walter mobile aircraft 
deicing units have been put into operation 
this year to help combat the severe winter 
weather conditions on North Central's 
system. 
Microfilm equipment has vastly reduced 
the amount of storage space needed for 
aircraft maintenance records, and the 
80,000 special blueprints that detail parts 
of the new DC-9 fan jets. 
The company's new IBM System/360 
Model 40 data processing computer was 
put in operation during 1966. The system 
processes and produces payrolls; ticket, 
air freight, and mail billings; financial 
statements; statistical reports; inventory 
control records; and maintenance records. 
18 
 19 
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 Advertising 
' VERTISING was once again directed to the business and vaca 
tion travel markets. North Central's image, as one of the 
- -A- nation's leading regional air carriers, received greater exposure 
during 1966 as the company expanded its advertising program to 
include national media. 
Newspaper advertising was carried in all cities on North Central's 
system. Attractive ads were also placed in The Wall Street Journal and 
in Fortune, Newsweek, and Ski magazines. 
Radio and television were used to dramatize to the traveling public 
the story of North Central's service. Radio commercials were heard in 
over 55 cities on the system. The company also sponsored a television 
weather show and a weekly aviation program. Outdoor advertising, in 
the form of billboard displays, attracted attention in many of the key 
cities served by the company. 
An aggressive advertising campaign is being developed for 1967 
featuring the DC-9 fan jets and Convair prop-jets to inform travelers of 
North Central's "New Look" as it enters the jet age. 
Promotions 
S 
PECIAL PROMOTIONS were developed and carried out 
by North Central during 1966 to highlight the airline's service. 
North Central's all-expense ski package tours were expanded 
to include five major ski areas. A comprehensive ski promotion bro 
chure, describing the five tours and the 27 ski areas across North 
Central's system in North Dakota, South Dakota, Minnesota, Wis 
consin, Michigan, and Canada, was developed. Over 50 ski resorts are 
only "minutes away" from cities served by the airline. 
To feature its ski program, the company created a special display 
which was used at ski shows in Detroit, Chicago, and Minneapolis. 
The display emphasized to ski enthusiasts the convenience of air travel 
on North Central for ski holidays. 
One of the most successful new developments during the year was 
the distribution of a colorful brochure, "Welcome Aboard North 
Central." The brochure is used in the seat packet on the airplanes 
and promotes the recreational and vacation opportunities in the air 
line's territory. It also includes tips and information on air travel. 
A new field of promotion was entered in 1966 when the company 
began its merchandising program. Some 14 items with North Central 
identification are available for purchase by the public. Included are 
such articles as flight bags, luggage tags, sets of glasses, and flight valets. 
An attractive brochure, including a mail order form, is now carried in 
the seat packets aboard all Northliner flights. 
In 1967, North Central's "New Look" will receive special promotion 
as new equipment facilities, and services are offered by the company. 
 North. Central Airlines, Inc. 
0201 Thirty-Fourth Avenue South 
MINNEAPOLIS, MINNESOTA 55450