ANNUAL REPORT 1969 
 NORTH CENTRAL AIRLINES 
GENERAL OFFICES: 7500 Northliner Drive, Minneapolis, Minnesota 55450 
BOARD OF DIRECTORS 
Hal N. Carr* Chairman 
D. E. Crooker 
G. F. DeCoursin* 
MANAGEMENT 
Chan Gurney 
Samuel H. Maslon * 
Jay Phillips 
Hal N. Carr ....... . .... . ..... . ..... . Chairman of the Board and 
Chief Executive Officer 
Bernard Sweet ......... . ......... . .................. President 
John P. Dow ......... . ............ Vice President and Secretary 
Leslie J. Keely ..... .. ........ Vice President-Maintenance and 
Engineering 
Daniel F. May ... . ... . ... . ........ Vice President and Treasurer 
REGISTRARS AND 
STOCK TRANSFER AGENTS 
Northwestern National Bank of Minneapolis; Minneapolis, Minnesota 
First National City Bank; New York, New York 
Morton B. Phillips 
Joseph E. Rapkin 
H. P. Skoglund 
Bernard Sweet 
Kenneth B. Willett 
Robert G. Zeller 
Executive Committee 
David E. Moran . .. ..... . ..... Vice President-Traffic and Sales 
T. M. Needham ... . ........ Vice President-Ground Operations 
Arthur E. Schwandt ....... . Vice President-Industrial Relations 
G. F. Wallis ... . ...... . ........ Vice President-Flight Operations 
Gowan J. Miller ................... . 
Charlotte G. Westberg ..... . . . 
.Assistant Secretary 
. . . Assistant Secretary 
 March 6, 1970 
TO OUR STOCKHOLDERS, EMPLOYEES ANO FRIENDS: 
North Central Airlines has completed another year of progress and a decade of impressive growth. 
Revenues for 1969 increased by a record $13,202,000 to reach $68,428,000-a 24 percent gain 
over 1968. For the second consecutive year, the company carried more than three million passengers, 
up 229,003 to 3,242,819. Revenue passenger miles advanced 18 percent to 609,973,000. Daily and 
monthly traffic highs were also established as 13,619 passengers flew August 1, and 353,907 were 
carried in August. 
With operating expenses of $68,035,000, including depreciation of $5,606,000, the airline achieved 
a $393,000 operating profit in 1969. The company's extensive equipment modernization program 
caused the substantial increase in depreciation, as well as the rise in interest expense of 56 percent 
to $4,830,000. After income tax credits, the net loss for 1969 was $2,378,000. However, no capital 
gain was recorded in 1969, while the net income of $70,000 in 1968 included a $1,184,000 gain on 
disposition of equipment. 
In perspective, the year was one of the most difficult the airline industry has yet experienced. During 
the second half of 1969, all the carriers suffered from an unanticipated slowdown in their traffic 
growth. This was attributed largely to the influence of anti-inflationary measures enacted by the 
Federal Government. The result of the softening of traffic was magnified by the continued rising costs 
of labor and material. All nine of the regional airlines incurred losses in 1969, and the total loss mounted 
to approximately $60 million. 
Despite the present adverse economic conditions, the 1970 outlook is encouraging for North Central. 
The full 12-month effect of fare increases granted by the Civil Aeronautics Board in February and 
October 1969 has not yet been realized, and will generate greater revenues in 1970. Besides this, two 
recent actions by the Board will strengthen the 1970 earnings picture even more-the distribution of 
a larger share of interline fares to the regional carriers and the elimination of public service revenue 
reductions with new routes. 
During 1969, North Central was awarded 1,760 additional route miles. The C.A.B. approved a 
Minneapolis/St. Paul-Denver route, and nonstop fan jet service was inaugurated in June. The com- 
pany also received authority for Twin Cities-Chicago nonstop flights. In November 1969, North Central 
was granted Milwaukee-Ohio service to Cincinnati, Columbus, and Dayton. Flights started March 1, 
1970. 
The airline has applied for over 16,000 new route miles to serve another 22 communities in nine 
states, the District of Columbia and two Canadian provinces. A C.A.B. Examiner has recommended 
North Central for nonstop authority from both Minneapolis/St. Paul and Milwaukee to New York/ 
Newark. The Board's final decision is expected in 1970. 
At a special meeting in September, the company's stockholders approved an increase in the author- 
ized shares of common stock from 10,000,000 to 16,000,000. A portion of the additional shares were 
offered to the general public in October through a group of underwriters. 
The airline's new $15-million general office and main operations base at the Minneapolis-St. Paul 
airport was finished during 1969, and the dedication program was held in October. 
The era of introducing jet service to all North Central communities represents an investment of 
$93 million over the past 30 months. The company's fleet now consists of thirteen 100-passenger 
DC-9 fan jets and 34 Convair 580 prop-jets. Two more DC-9's are available for use during the year. 
The 1970's will be a decade of challenge for North Central. The company's effective cost control 
program will continue, major investments required for jet equipment and new facilities have been 
completed, and increased revenues are anticipated from new routes, fare increases, and a more 
favorable allocation of interline fares. Management believes that these developments will produce a 
substantial improvement in earnings for 1970. North Central looks forward to a rewarding year sup- 
ported by the efforts of its dedicated employees and its loyal stockholders and passengers. 
Sincerely, 
-/;f,,p~_ 
HAL N. CARR 
Chairman of the Board and 
Chief Executive Officer 
BERNARD SWEET 
President 
 REV ENUE S 
$55 - - - - - - ------1 
$511 - - - - - - - - - - - 
$4~- - - - - - - - - - - - 1 
$3:>-- - - < 
$30- 
$25- 
1965 '66 '67 
2 
'68 
ANNUAL REPORT 1969 
'69 
FINANCIAL REVIEW 
North Central Airline's 1969 revenues reached a record 
high of $68,427,923. The company closed the decade 
of the 1960's with a $13,201,997 increase over 1968, the 
largest revenue gain in its 22-year history. 
Operating expenses, including depreciation, advanced 
26 percent to $68,035,034 in 1969, and the company 
achieved an operating profit of $392,889, compared with 
$1,025,833 the previous year. 
Depreciation and amortization expense continued to 
rise in 1969-from $4,356,893 to $5,605,500-due large- 
ly to the acquisition of DC-9 fan jets and the completion 
of the Convair 580 conversion program. Related interest 
expense increased sharply to $4,829,814, up 56 percent 
compared with $3,092,015 in 1968. The resulting net 
loss for 1969 was $2,378,395 after income tax credits 
of $1,934,888. In 1968 the company's net income of 
$70,216 included a $1,183,588 gain from disposition of 
equipment, while no capital gain was realized in 1969. 
The actions taken by the Federal Government to com- 
bat inflation reduced the rate of traffic growth which the 
airlines have experienced in recent years. The downward 
trend in the economy for the last six months of 1969 had 
a double effect on the industry because traffic did not 
meet anticipated forecasts while inflation boosted the 
rising cost of labor, material, fuel, insurance, and interest. 
To improve the financial condition of the company, 
$9,760,832 was raised in October through a public 
offering of North Central stock and warrants, the addi- 
tional shares required having been authorized at a special 
stockholders' meeting in September. Revenues from 
traffic growth, new routes, recent fare increases, and a 
greater share of interline fares will also strengthen the 
airline's ability to emerge from the present period of 
economic weakness, when coupled with the company's 
expanded cost control program. 
North Central enters the 1970's with a strong potential 
for increased growth and improved earnings. 
 TRAFFIC 
GROWTH 
North Central Airlines continued its record traffic growth 
in 1969 as 609,972,627 revenue passenger miles were 
flown for an increase of 18 percent over 1968. Some 
3,242,819 passengers were carried during the year, a 
gain of eight percent compared with 1968. 
This was the second consecutive year the company 
boarded over three million passengers, and the passen- 
ger total was the highest in the airline's 22-year history. 
In addition, a monthly record was set in August with 
353,907 passengers carried, 13 percent ahead of the 
same month of 1968. On August 1, 1969, a new single- 
day mark was reached as 13,619 passengers flew on the 
"Route of the Northliners." 
The conversion to an all jet-powered fleet early in 1969 
contributed significantly to traffic increases as North 
Central's 100-passenger DC-9 fan jets and Convair 580 
prop-jets provided greater capacity, speed and comfort 
to the traveling public. 
During peak periods, North Central added 1,018 "extra 
sections'' to its regular flights. These carried 31,552 
passengers and flew 250,553 miles. The airline also 
operated 168 charters to 32 states and Canada, covering 
246,921 miles and accommodating 18,302 passengers. 
To promote North Central service in the local communi- 
ties, the company's 202 scenic flights introduced the ad- 
vantages of jet-powered transportation to 11,625 people. 
North Central flew 1,543,706,426 seat miles in 1969, 
an 18 percent increase over the previous year, and avail- 
able ton miles reached 209,475,981, up 32 percent. 
A record 82,744,459 pounds of cargo (air freight, 
express, and mail) were carried on the airline's 90-city 
system in 1969. Total cargo ton miles rose to 8,293,640, 
an increase of 14 percent compared to 1968. Air freight 
was up a substantial 18 percent to 4,599,580 ton miles 
-and mail increased 15 percent to 2,466,849 ton miles 
flown. 
Since inaugurating service in 1948, the airline has 
carried 22,338,592 passengers and flown 3,785,433,524 
passenger miles. 
North Central Airlines opened its new second-level pas- 
senger boarding gates at Minneapolis-St. Paul International 
Airport in 1969. Passengers can now board and deplane jet 
aircraft completely sheltered from the weather. Additional 
upper-level facilities were also installed at Milwaukee and 
Green Bay during the year. 
OPERATING 
PERFORMANCE 
North Central's operating performance for 1969 was one 
of the most outstanding records in the airline industry. 
In spite of an unusually severe and prolonged Midwest 
winter, the company achieved a completion factor of 
over 98 percent. Of its 23,018,925 scheduled miles, 
22,577,216 were flown. 
One of the major reasons for this impressive perfor- 
mance was the airline's exacting and continuous main- 
tenance program. In 1969, less than one-tenth of one 
percent of North Central's 209,755 actual departures 
were cancelled for mechanical reasons, and less than 
one and one-half percent were delayed for mechanicals. 
North Central's "Operation Cold Front" again empha- 
sized winter operating techniques. This regular seasonal 
program covers refresher training of personnel and the 
preparation of ground equipment for adverse winter 
weather. 
The excellent 1969 performance record is the result 
of the dedicated efforts of all North Central employees 
to their job of keeping the Northliners flying. 
3 
 4 
ROUTE DEVELOPMENT 
In 1969, the Civil Aeronautics Board awarded North 
Central Airlines 1,760 additional miles which increased 
its route system by 24 percent. 
In April, the Board authorized the company to operate 
Denver-Minneapolis/St. Paul nonstop service. This is the 
airline's longest nonstop route. Daily prime-time DC-9 
flights were inaugurated June 15. Already Denver has 
become the eighth most important revenue-generating 
station on North Central's system. 
The C.A. 8. lifted its operating restrictions on the Twin 
Cities-Chicago route in August, and nonstop fan jet flights 
started October 26. The direct service with 100-passen- 
ger DC-9's is in addition to the multi-stop flights North 
Central operates between these two metropolitan com- 
munities. The company also received permanent au- 
thority to provide nonstop service between Sioux Falls 
and the Twin Cities, and Sioux City-Kansas City. 
A decision in the Milwaukee Short Haul route case was 
made in November. North Central was certificated to 
serve three new cities in Ohio-Columbus, Dayton, and 
Cincinnati. The Milwaukee -Ohio flights are starting 
March 1, 1970. North Central will provide improved new 
service to this important market area. 
In the Twin Cities-Milwaukee Long Haul Investigation, 
the C.A. 8. Examiner recommended North Central to 
operate nonstop service to New York/Newark. A final 
decision in this case is expected in 1970. 
North Central currently has applications pending be- 
fore the C.A.B. for 16,327 additional route miles to serve 
22 new communities in nine states, the District of Co- 
lumbia, and the Provinces of Manitoba and Quebec, 
Canada. If approved, these new routes would more than 
double the airline's present system and extend its service 
area as far north as Winnipeg, south to Dallas/Ft. Worth, 
Houston, San Antonio, Atlanta, Miami, Tampa, and east 
to Montreal, Boston, New York/Newark, Philadelphia, 
Washington/Baltimore, and several North Carolina cities. 
The company is continuing to pursue this ambitious 
route development program in the 1970's. The airline 
presently serves 90 communities in 12 states and 
Canada over a 9,200-mile route system. 
1969 AWARDS: 
Denver-Twin Cities nonstop (694 miles) 
Milwaukee-Columbus one-stop via Dayton, and 
nonstop (355 miles) 
Milwaukee-Cincinnati one-stop via Dayton, and 
nonstop (348 miles) 
Milwaukee-Dayton nonstop (284 miles) 
Minneapolis/St. Paul-Chicago nonstop (334 miles) 
Sioux Falls-Minneapolis/St. Paul nonstop 
(permanent authority) 
Sioux City-Kansas City nonstop 
(permanent authority) 
AWAITING CAB DECISION: 
Twin Cities-Milwaukee Long Haul Investigation- 
New routes from the Twin Cities and Milwaukee 
to Boston, New York/Newark, Philadelphia, and 
Washington/ Baltimore (3,941 miles) 
North Carolina Points Investigation-New routes 
from Chicago to Charlotte, Greensboro/ High 
Point/Winston-Salem, and Raleigh/Durham 
(2,116 miles) 
Omaha and Des Moines Service Investigation- 
Nonstops from Omaha to Chicago, Minneapolis/ 
St. Paul, Denver, and Kansas City(l,350 miles) 
North Central Route Realignment Proceeding- 
The Board's staff has recommended combining 
a number of segments to permit gr.eater opera- 
ting flexibility. 
AWAITING CAB EXAMINER'S DECISION: 
Southeast Points Investigation-New routes from 
Minneapolis/St. Paul and Milwaukee to Miami, 
via Atlanta and Tampa (1,283 miles) 
Atlanta-Detroit, Cleveland, Cincinnati Investiga- 
tion (1,527 miles) 
Chicago-Baltimore Nonstop Service Investigation 
(622 miles) 
APPLICATIONS AWAITING HEARING: 
Minneapolis/St. Paul nonstop to Dallas/Ft. Worth, 
and one-stop via Kansas City. Also, nonstops 
from Dallas/Ft. Worth to San Antonio and 
Houston. (1,349 miles) 
Minot-Winnipeg and Duluth/Superior to Winnipeg 
(534 miles) 
Milwaukee-Denver nonstop (909 miles) 
Columbus, Dayton, Cincinnati and Indianapolis- 
Philadelphia nonstops (1,977 miles) 
Toronto-Montreal nonstop (315 miles) 
Minneapolis/St. Paul-Kansas City nonstop (406 
miles) 
 LOOKING TO THE 187O's 
NEW FACILITIES 
North Central Airlines officially opened its new $15-million general office 
and main operations base in October. Located at the Minneapolis- 
St. Paul International Airport on a 100-acre site, the headquarters 
combines the company's major corporate and operational functions 
into one massive 516,000-square-foot complex. 
The main base has three huge hangar bays and can service nine 
100-passenger DC-9 fan jets at one time, or 15 Convair 580 prop-jets. 
Behind the bays are related shop areas, and nearby is the $900,000 
jet-engine test cell. The general office is housed in the adjoining two- 
story building. North Central also operates an employee cafeteria and 
Flight Kitchen, becoming the first regional carrier to cater its own air- 
craft. Over 1,200 of the company's 3,100 emplQyees are based in the 
Twin Cities. 
At Milwaukee, the new $2.5-million boarding terminal, designed for 
North Central, was operational in December. Eight gates provide expe- 
dited check-in service and on-line transfers. At Minneapolis-St. Paul, 
Green Bay, and Milwaukee, second-level boarding facilities were added, 
and a new terminal was dedicated at Escanaba. The new Central 
Wisconsin Regional Airport, serving Wausau, Stevens Point, Wisconsin 
Rapids, and Marshfield, was opened in October with increased jet 
flights and more direct air service. 
ESCORT COMPUTER SYSTEM 
Early in 1969, North Central announced its agreement with International 
Business Machines for an $8-million Electronic System Combining 
Operations, Reservations, Telecommunications-known as ESCORT. 
Located in the new computer center at the company's Twin Cities 
headquarters, the basic equipment includes two I BM 360-65 and two 
Sanders 200 computers. The system is designed to expedite passenger 
reservations, message-switching, and flight information inquiries. 
Research and planning for North Central's entry into the computer- 
ized reservations age started in 1967 with an evaluation of specifications 
and the economic feasibility of completely automating reservations. 
During 1968 and 1969, key personnel from the Traffic, Ground Opera- 
tions, and Treasury Departments implemented the ESCORT project; 
and extensive programming modifications tailored the I BM system to 
North Central's requirements. The 1,315 separate programs of ESCORT 
then underwent intensive testing, and a sophisticated self-instruction 
course was developed to train North Central employees at all locations 
simultaneously. 
ESCORT's 380 remote agent sets, with attached keyboards, consist 
of TV-like units and typewriter devices. Linked with the four computers 
by 18,500 miles of telephone lines, the sets are installed at 160 loca- 
tions over the airline's 12-state system-reservations centers, city 
ticket offices, all airport operations, and strategic passenger service 
positions. North Central is the first carrier to provide visual display sets 
at passenger gate areas. 
A major advantage of ESCORT is that every North Central agent at 
every location has direct access to all stored reservations records. He 
can make, change, or reconfirm a reservation "instantly", and passen- 
ger records can be retrieved by name or flight number. The agent 
enters the inquiry into ESCORT and receives a response within three 
seconds.(ESCORTwfll remind him of missing information.) Data can be 
secured on seat availability, fares, arrival/departure times, and the op- 
erating status of all North Central's 1,300 daily flight segments, as well 
as seat availability and fares for 3,800 connecting flight segments of 
21 major airlines. ESCORT also maintains an inventory of all "sold out" 
flights for these airlines, and reservations can be confirmed on every 
other flight in their entire schedule. ESCORT's overall capacity permits 
storage of passenger records for 340 days, including name, telephone 
number, flight itinerary, fare, ticketing information, and special ser- 
vices required. 
North Central is the first airline to install electronic equipment system- 
wide which will transmit reservations, message-switching, flight infor- 
mation, and weather inquiries to a single computer system for com- 
mon retrieval. In addition, ESCORT is used for processing payroll, 
accounting, crew scheduling, maintenance planning; and inventory 
control data. 
ESCORT provides significant operating economies which will increase 
as the company's volume of business grows. The system is a vitally 
important part of North Central's expansion program and assures im- 
proved, high-quality reservations service for future traffic growth on 
present and anticipated new routes. Early in 1970, the message- 
switching function of ESCORT was activated, and during March the 
the entire system will be operational. 
THE FUTURE 
In addition to the airline's acquisition of new facilities and passenger 
service equipment, North Central has also completed its jet moderniz- 
ation program during the past 30 months, representing an expenditure 
of $93 million for 13 DC-9 fan jets and 34 Convair prop-jets. 
These major investments give North Central a strong foundation for 
implementing new route awards and achieving record growth in the 
decade of the ?O's. 
ESCORT provides North Central's agents with "instant" responses to all inquiries 
(photo above), and the basic equipment is located in the new Computer Center (below) 
at the airline's Twin Cities headquarters. 
5 
 ROUTE OF THE NORTHLINERS PRESENT ROUTES 
PROPOSED ROUTES 
 8 
ASSETS 
CURRENT ASSETS 
Cash . . . . .. . 
Accounts receivable 
United States Government . 
Traffic 
Other 
Flight equipment parts, at average cost (less reserves of 
$260,152 and $338,954 in 1969 and 1968, respectively) 
Maintenance and operating supplies .. . .. . 
Prepaid expenses and sundry deposits (Note 1) 
Total current assets . ... ... . 
OPERATING PROPERTY AND EQUIPMENT-AT COST 
Flight equipment (Note 2) . . 
Ground equipment . 
Improvements to leased property- 
Furniture and office equipment .. 
Less accumulated depreciation (Note 3) . 
Advance payments on flight equipment ..... 
DEFERRED CHARGES 
Unamortized development and pre-operating costs (Note 4) . 
Unamortized discount and expense on debt . 
Rentals and other .. . . . .. . .. ... . 
OTHER ASSETS 
Other interline receivables 
The accompanying notes to financial statements are an integral part of this statement. 
1969 
$ 1,382,932 
1,112,204 
5,896,338 
929,433 
7,937,975 
2,212,636 
666,251 
5,126,936 
17,326,730 
71,774,524 
4,090,219 
3,116,950 
747,538 
79,729,231 
10,875,534 
68,853,697 
68,853,697 
3,830,379 
189,997 
1,084,329 
5,104,705 
$91,285,132 
1968 
$ 1,248,250 
1,671,347 
4,274,625 
2,053,072 
7,999,044 
1,824,159 
468,319 
2,107,083 
13,646,855 
66,603,743 
3,413,424 
2,898,522 
518,868 
73,434,557 
8,516,412 
64,918,145 
4,515,570 
69,433,715 
3,111,666 
194,888 
772,739 
4,079,293 
450,000 
$87,609,863 
Comparative Balance Sheet-December 31, 1969 and 1968 
LIABILITIES 
CU RR ENT LIABILITIES 
Short-term borrowing . 
Current maturities of long-term debt (Note 2) 
Accounts payable . 
Tickets outstanding 
Taxes withheld or collected as agents 
Accrued liabilities 
Salaries and wages . 
Payroll and property taxes 
Other .. 
Total current liabilities . 
LONG-TERM DEBT-less current maturities (Note 2) ..... . ..... . 
DEFERRED FEDERAL INCOME TAXES (Note 5) ....... . .... .... . 
COMMITMENTS (Notes 6, 7, and 8) ..... . .. . . .. . .. . . ... . . 
STOCKHOLDERS' EQUITY (Notes 2, 9 and 10) 
Common stock-authorized, 16,000,000 shares of $.20 par value; 
issued and outstanding, 10,462,824 and 8,776,763 shares, 1969 and 
1968, respectively 
Paid-in capital ..... . .... . ............. .. ... . 
Retained earnings ............. . .......... . .... . 
1969 
$ 690,000 
6,086,920 
10,136,122 
265,933 
979,181 
2,138,173 
361,033 
1,272,765 
21,930,127 
53,719,506 
2,092,565 
10,218,785 
12,311,350 
3,324,149 
15,635,499 
$91,285,132 
1968 
$ 540,000 
6,409,940 
7,432,386 
211,409 
546,299 
1,465,384 
209,670 
1,204,370 
18,019,458 
59,611.269 
1,994,000 
1,755,353 
527,239 
2,282,592 
5,702,544 
7,985,136 
$87,609,863 
9 
 10 
COMPARATIVE STATEMENT OF OPERATIONS 
Years ended December 31, 1969 and 1968 
OPERATING REVENUES 
Passenger .. .... . 
Freight and express . . 
Public service revenue . 
Mail ......... . 
Non-scheduled service and other 
Total operating revenues . 
OPERATING EXPENSES 
Flying operations . . . 
Maintenance (Note 1) 
Passenger service . . 
Aircraft and traffic servicing 
Promotion and sales ... 
General and administrative . 
Depreciation and amortization (Note 3) 
Total operating expenses . 
Operating profit . . . . . . 
OTHER EXPENSE (INCOME) 
Interest expense-net of interest capitalized (Note 11) . 
Other (net) . . . . . . . 
Totalotherexpense . 
(Loss) before income taxes and gain on disposition of equipment . 
INCOME TAXES (Note 5) 
Deferred . 
(Loss) before gain (loss) on disposition of equipment 
GAIN (LOSS) ON DISPOSITION OF EQUIPMENT, NET OF TAXES (Note 5) . 
NET INCOME (LOSS) 
INCOME (LOSS) PER SHARE (Note 12) 
(Loss) before gain (loss) on disposition of equipment 
Gain (loss) on disposition of equipment, net of taxes 
NET INCOME (LOSS) PER SHARE 
The accompanying notes to financial statements are an integral part of this statement. 
1969 
$57,073,369 
4,153,106 
4,016,386 
1,501,786 
1,683,276 
68,427,923 
20,960,004 
10,687,242 
3,849,181 
17,421,674 
5,966,402 
3,545,031 
5,605,500 
68,035,034 
392,889 
4,829,814 
(152,722) 
4,677,092 
(4,284,203) 
(1,934,888) 
(2,349,315) 
(29,080) 
$ (2,378,395) 
$(.26) 
$(.26) 
COMPARATIVE STATEMENTS OF RETAINED EARNINGS AND PAID-IN CAPITAL 
Years ended December 31, 1969 and 1968 
RETAINED EARNINGS (Note 2) 
Retained earnings-beginning of year 
Net income (loss) for the year . 
Retained earnings-end of year 
PAID-IN CAPITAL 
Paid-in capital-beginning of year . . . . . . . . ... . ....... . 
Premium in excess of par value applicable to stock purchase warrants (Note 2) . 
Excess of proceeds over par value of common stock issued 
upon conversion of debentures (Note 2) . . . . . . . . . . . . . . . . . . . . 
Excess of proceeds over par value of common stock issued under option (Note 9) 
Excess of net proceeds over par value of common stock issued as a result 
of a public offering (Note 10) . . . . . . . . . . . 
Paid-in capital-end of year .. ................ . .. .. . 
The accompanying notes to financial statements are an integral part of these statements. 
1969 
$ 5,702,544 
(2,378,395) 
$ 3,324,149 
$ 527,239 
8,287 
242,427 
9,440,832 
$10,218,785 
1968 
$44,628,769 
3,460,728 
4,667,639 
1,183,809 
1,284,981 
55,225,926 
16,594,647 
8,930,353 
2,922,485 
13,902,654 
4,741,168 
2,751 ,893 
4,356,893 
54,200,093 
1,025,833 
3 ,092,015 
(83,810) 
3,008,205 
(1,982,372) 
(869,000) 
(1 ,113,372) 
1,183,588 
$ 70,216 
$(.12) 
.13 
$ .01 
1968 
$ 5,632,328 
70,216 
$ 5,702,544 
$ 467,489 
50,000 
9 ,750 
$ 527,239 
 NOTES TO FINANCIA.L STATEMENTS DECEMBER 31, 1969 
1. ENGINE OVERHAUL-In 1969, th e company changed its method of acco unting for jet engine overhaul 
costs from the reserye method to the d irect_ charge-off method. In the opInIon of the company, th e c hange 
has not h:ad a material effect on the operatin g results of the co mpany. 
Prepaid overhaul expenses total in g $3,5 22,000 and $1,353,000 are included in prepa id expenses as of 
December 3 1, 1969 and 1968, respectively. 
2. LONG-TERM DEBT-Lon g-term debt at December 31, 1969 co nsists of the followin g: 
Terms Total Long-term Current 
Quarterly installment notes due from January, 1969 through 
April, 1973; interest at% above prime rate ................. $ 20,564,480 $14,688,914 $5,875,566 
7% quarterly installment notes du e from July, 1973 
throu gh October, 1978 . 
Total due banks and insurance co mpanies (a) ......... . 
7 % subordinated notes due in sem i-annual installm ents 
from September, 1971 through March, 1976 (b) .......... . . . 
e~~~uss~bo_ 
rd_ 
i~at_ 
e~ _con_ 
v_ 
~rt_ 
ible _ 
deb_ 
ent~~es_ d~e _; n _ 
1_ 
~78_ ~c) :. 
35,253,393 
55,817,873 
3,000,000 
744,500 
2 44,053 
$59,806,426 
35,253,393 
49,942,307 
3,000,000 
744,500 
5,875,566 
32,699 2 11,354 
$53,719,506 $6,086,920 
(a) The t_ 
ota l $55,817,873 loan is collateral ized by substantially all flight eq uipm ent owned by the company. 
Two equipment manufactu_ 
rers are partially guaranteeing these loa_ 
ns. Among other things, th e loan agree- 
ment contains certain restrictions on the payment of dIvIdends, capital exp end itures, and additional borrow- 
ings and requirements regarding working capita l and n et worth . 
(b) Stock purchase warrants attached enable th e holders to purchase an aggregate of 200,000 shares of 
commo n stock at $6.00 a share through March 1, 1976. Un am ortized discount and expen se on debt has 
been charged and paid -in capita l credited for $50,000 representin g the valu e of the warrants issu ed . This 
amount is being amortized over the life of th e loan. 
(c) Convertible into co mmon shares at $7.59 a share to _ 
l971 and $9.50 a sh are thereafter to maturity. 
During the yea r, $8,500 of d ebe ntures were converted into 1,061 shares of co mmon stock, resultin g in 
increases in common stock of $212 and paid-in ca pital of $8,287. 
3. DEPRECIATION-For financial reporting purposes, the company depreciates fixed assets on th e straight - 
line method based on est1mat_ 
ed useful lives ran gin g from seven to fifteen years for fl igh t equipm ent and 
three_ to ten years for other equipm ent and property. Th e compa ny has followed the practice in previous yea rs 
of using accelerated methods for income tax purposes. Th e co ntinu ed use of this m ethod will result in an 
excess of tax depreciation over depreciation used for financial reporting purposes of $8,884,000 (see Note 5). 
4. DEVELOPMENT AND PREOPERATING COSTS-Expenditu res for route development costs are deferred 
by the company and amortized over the life of the temporary certificates or five yea rs for permanent certi fi- 
cates. Aircraft preoperating costs are amortized over approximately eight years. 
5 . INCOME TAXES-The compa ny's loss was used primarily to reduce deferred incom e taxes previously 
provided (including reducing the loss on sale of equipment by $22,000). Approximately $150,000 of the loss 
is available to offset income in future years used in computin g th e inco m e tax provisio n. 
Th e company has additional net operating loss carryovers available as a reduction against future taxable 
income arIsIng out of tim in g differences in reporting depreciation and ce rta in deferred expenses for f1n an - 
cIa l reporting and income tax purposes. There are several options for reporting depreciation for income ta x 
purposes (see note 3) under co nsider ation by th e company which will affect th e ca rryover to future years; 
under no circumsta nces, however, will the decision result in taxable income for 1969 nor will it red uce the 
ca rryover privilege below th e $150,000 available for financial reportin g purposes. 
Earned but unused investment c redi ts available for r ed uctio n of future years' inco me ta xes for both f inan - 
cial reporting purposes and inco m e tax purposes total $4,876,000. These unused investment credits expire 
as follows : 1974-$1,528,000 1975-$2,545,000 1976-$803,000 
6 . VACATION PAY-Th e company r ecords vacatio n pay when paid . The unrecorded obligation at December 
31, 1969 and 1968 approximated $1,130,000 and $1,100,000, respect ively, before inco m e tax cr edits. 
7. PENSION PLANS-Th e company has noncontributory pension plans covering substantially all of its 
employees. Pensions, based on length of service and average salary, are provided for retirement of pilots 
at age 60 and all other employees at age 65. Th e plans coverin g pilots are fully funded for past service cost, 
while the company pays the normal cost and interest only on the past service cost of the other plans. The 
cost to the company in 1969 was $1,075,000 compared with $1,100,000 in 1968. 
In 1969 the compa ny began fund in g th e bargaining units and supervisory pension plans on a current 
basis which had the effect of red ucin g th e c urrent year's net loss by $180,000 or $.02 per share. 
8. COMMITMENTS-Approximate m in imum annual co mm itments exi st for: 
(1) New office and operational facilit ies at the Minneapolis-St. Paul Internation al 
Airport for the periods ending in 1996 ............. . ... . 
(2) T erm inal and other fa ci lities (including landing fees) .. . 
(3) Nine Convair 580 aircraft for eight to ni n e years ........ . 
(4) Three DC-9 aircraft, cancel able upon six months' notice ... . ..... . ... . ..... . .... . 
.. $1,050,000 
1,900,000 
1,760,000 
1,440,000 
650,000 
260,000 
(5) Data processing equipment-1970 (increasing to $1,050,000-1971 to 1978) . 
(6) Other eq uipment . . 
$7,060,000 
9 . STOCK OPTION PLAN-A total of 250, 000 shares of unissued common stock was reserved for officers 
and key employees under a qualified plan in 1965. Options granted are: 1965-220,000 shares at $3 .05; 
1967-5,000 shares at $6.81; 1968-5,000 shares at $5.60; and 1969-20,000 shares at $4.12 5. 
Options for 85,000 and 30,000 shares were exercised in 1969 and prior years, respect ively. Option s 
granted but unexercised will expire in 1970 (105,000 shares), 1972 (5,000 shares), 1973 (5,000 shares), 
and 1974 (20,000 shares) . 
10. COM MON STOCK-During 1969, the company issued 1,600,000 shares of common stock with stock 
purchase warrants attached wh ich enable the holders to purchase an aggregate of 1,200,000 shares of 
common stock at $5.50 a share throu gh October 31, 1979. 
Th e gross proceeds from this sale of common stock and warrants totaled $10,600,000 wh ich after reduc- 
tion by $839,168 for underwriting commissions and expenses, resulted in $9,760,832 net proceeds to th e 
company, accounted for as follows: 
Increase in co mmon stock, 1,600,000 shares at $.20 par va lue ... .. . . 
Inc rease in paid -in capital ......... . 
. . $ 320,000 
9,440,832 
$9,760,832 
11. CAPITALIZED INTEREST-The company recognizes the financin g costs associated with acquisition of 
operating property and equipment and pre -operatin g and developm ent expenditures by capitalizing interest. 
Capitalized interest reduced interest expense by $458,000 in 1969 and $559,000 in 1968. 
12. INCOME (LOSS) PER SHARE-Income (loss) per share is based upon the weighted average number of 
shares outstanding for the year. Conversion of debentures into common stock, exercise of stock options and 
exercise of warrants to purchase stock would not result in material dilution (as d efined in Opinion 15 of the 
Accounting Principles Board) of the net loss per share for the year ended December 3 1, 1969. 
FIVE-YEAR OPERATING SUMMARY 
0 PERA Tl NG REVENUES 1969 1968 
Passenger ....... $57,073,369 $44,628,769 
Public service revenue . 4,016,386 4 ,667,639 
Other .... 7,338,168 5,9 29 ,518 
TOTAL. .... . 68,427,923 55,225,926 
OPERATING EXPENSES 
Direct expenses . . . . 31,647,246 25,525,000 
Indirect expenses ... 30,782,288 24,318,200 
Depreciation and amortization . 5,605,500 4 ,356,893 
TOTAL. . 68,035,034 54,200,093 
Operatin g profit 392,889 1,025,833 
Non-operating income and (expenses), net (4,677,092) (3,008,205) 
Income (Loss) before taxes . .. . .... (4,284,203) (1,982,372) 
Income taxes . . . . .. ..... . ... (1,934,888) (869,000) 
Income (Loss) before gain (loss) on disposition 
(1 ,113,372) 
of equipment ............. (2,349,315) 
Gain (Loss) on disposition of equipment, 
1,183,588 
less income taxes (29,080) 
Net Income (Loss) . . . . . . .. . . $ (2,378,395) $ 70,2 16 
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, 
1969, and the related statements of 
operations, retained earnings and paid- 
in capital for the year then ended. Our 
examination was made in accordance with 
generally accepted auditing standards 
and accordingly included such tests of 
the accounting records and such other 
auditing procedures as we considered 
necessary in the circumstances. We made 
a similar examination for the preceding 
year. 
In our opinion, the accompanying bal- 
ance sheet and statements of operations, 
retained earnings and paid-in capital 
present fairly the financial position of 
North Central Airlines, Inc. at December 31, 
1969 and the results of its operations 
for the year then ended, in conformity 
with generally accepted accounting prin- 
ciples applied on a basis consistent with 
that of the preceding year, except for the 
change in accounting for engine overhaul 
costs discussed in Note 1, with which we 
concur. 
Alexander Grant & Company 
Minneapolis, Minnesota 
February 18, 1970 
1967 1966 196 5 
$33,482,371 $30,261 ,479 $23,720,203 
5,249,563 5,767,888 7,199,418 
4 ,118,543 3 ,583,304 2,971,410 
42,8 50 ,477 39,6 12,671 33,891,031 
19,8 11,886 17,980,535 15,356,876 
19,523,811 17,062,543 13,970,237 
2,626,251 2 ,253,361 1,997,488 
41 ,961 ,948 37,296,439 31,324,601 
888,529 2,316,232 2,566,430 
(628,73 1) (464 ,974) (442,894) 
259,798 1,85 1,258 2,123,536 
(336,010) 720 ,647 1,006,520 
595,808 1,::.30 ,611 1,117,016 
9 24 ,316 24 ,000 21,736 
$ 1,520,124 $ 1,154 ,611 $ 1,138,752 
11 
 12 
"GOOD PEOPLE MAKE AN AIRLINE GREAT" 
ADVERTISING-PROMOTION 
Highlighting North Central's 1969 advertising program 
was the introduction of the theme, "Good People Make 
An Airline Great." People-oriented newspaper advertise- 
ments ran in major marketing areas on North Central's 
system, while television and radio spots featured the 
airline's new "Good People" jingle. 
This corporate musical identity was particularly effec- 
tive and appealing in emphasizing the new North Central 
image-outstanding service by employees who care. 
During 1969, over 60 television and radio stations and 
some 40 newspapers promoted North Central's service 
and its slogan, Good People Make An Airline Great. 
In addition, billboard advertising in ten major cities 
featured new service. Special "Good People" folders 
spotlighted the new Minneapolis/St. Paul-Denver and 
Chicago-Twin Cities nonstops, and travel brochures were 
widely distributed. 
Promotional activities in 1969 included over 200 DC-9 
and Convair 580 scenic flights, introducing passengers 
to the comfort and speed of jet transportation. Other 
flights heralded important events, such as the opening 
of the new Central Wisconsin Regional Airport and the 
inauguration of DC-9 fan jet service at Iron Mountain/ 
Kingsford, Escanaba, Marquette and Muskegon in Mich- 
igan and Hibbing/Chisholm, Minnesota. 
April 23, 1969 represented a milestone in North Cen- 
tral's history. That day the airline received special atten- 
tion as the company's 20-millionth passenger, Patrick 
Cannon of Sydney, Australia, boarded a DC-9 at Oshkosh/ 
Appleton's Wittman Field for Chicago. 
Of major importance to North Central in 1969 was the 
inauguration of Minneapolis/St. Paul-Denver nonstop 
service. To acquaint Colorado communities and the Twin 
Cities with the new fan jet flights, the airline's sales de- 
partment made over 2,000 personal calls on commercial, 
travel agency, and interline accounts. Following the 
June 15 inaugural ceremonies the company held a 
reception in the Colorado capitol for business and civic 
leaders and news media personnel. 
A special dedication program on October 16-17 officially 
introduced the company's new $15-million headquarters 
complex. A reception and banquet was held for Twin 
Cities community leaders and news media representa- 
tives, featuring the Honorable John G. Adams, Civil 
Aeronautics Board member, as keynote speaker. 
The next day's ceremonies began with the outdoor 
dedication of the general office and main operations base 
by Chairman of the Board Hal Carr. Following this, North 
Central was given a Recognition Luncheon by the Minne- 
apolis and St. Paul Chambers of Commerce and the 
Minnesota Department of Economic Development. A 
special award was presented citing the airline for its con- 
tribution to the economic growth of the Twin Cities. 
Pictorial brochures were distributed during the two-day 
program, and news releases publicized the event through- 
out the system. An Employee Open House was sched- 
uled in November, and nearly 5,000 employees and 
members of their families attended. 
North Central's publication, The Northliner, reported 
the company's news of interest to passengers and em- 
ployees. Over 330,000 copies were placed on board the 
aircraft and distributed by mail during 1969. In addition, 
news media in the 12-state area served by North Central 
received 60 press releases about the airline. 
NEW FASHION LOOK 
To enhance North Central's image, "Good People Make 
An Airline Great," the company's stewardesses donned 
eye-catching new uniforms-placing them among the 
industry fashion leaders. 
The ensemble uses a brilliant Apollo Blue as the basic 
color. Designed for inflight versatility, the uniform fea- 
tures a short-sleeved lightweight wool A-line dress with 
white leather belt and tailored cardigan jacket. For out- 
door wear, a horizontally striped tri-season coat, white 
vinyl hat, and boots are added, along with a wool topcoat 
for winter months. 
North Central's colorful new stewardess ensemble features a brilliant Apollo 
B_lue dr~ss and matching cardigan jacket. The uniform is accented by a silver 
pin, wh1c~ uses _ 
North Central's mallard duck insignia, and the white vinyl 
hat. A striped, tn-season coat of red, white and Apollo Blue complements the 
new fashion look. 
 F IVE YEARS OF RECORD PROGRESS 
PASSENGERS CARGO 
Ml ON POI r>l 
SEAT MILES 
B 
32 
- 8 0 - - - 
2R 
,- - 
70--------,----- 
24 - - 
- 60------- 
- 
20 - 
- 
50 
- -----I-- 
16 
lT - 
1%5 66 67 '68 '69 
HIGHLIGHTS OF DRAMATIC GROWTH 
North Central achieved new records in all categories of 
traffic during 1969, as it has each year since inaugurating 
service in 1948. 
The 3,242,819 passengers carried was an all-time 
high and a gain of 229,003 passengers over 1968. The 
increase for the last five years was 1,889,518 passengers 
- a jump of 140 percent. 
Air cargo, including air freight, express and mail, also 
set records in 1969 when the company flew 82,744,459 
pounds of cargo-up 164 percent compared with five 
years ago. 
The company's available seat miles rose 201 percent 
in this five-year period, while the 1,543,706,426 seat miles 
in 1969 represented an 18 percent increase over 1968. 
The additional seats were of major importance in North 
Central's efforts to provide improved service to the 
traveling public. With the delivery of three more 100- 
passenger DC-9 fan jets and the completion of the Con- 
vair conversion program in 1969, the airline's all jet- 
powered fleet now consists of 13 DC-9's and 34 Convair 
580 prop-jets. 
North Central looks forward to even greater progress 
in the next five years as traffic growth continues and the 
full impact of jet-operating efficiencies are realized. 
 NORTH CENTRAL AIRLINES, INC. 
7500 NORTHLINER DRIVE 
MINNEAPOLIS, MINNESOTA 55450