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e BOARD OF DIRECTORS 
Paul F. Collins, Chairman, Winchester, Mass. 
Jacqueline Cochran, New York, N. Y. 
~es F. Fitzgero!d Boston, 
~ e E. Gardner, Bosto 
Grenville L. Hancot; ass. 
Radu lrime 
Alb 
Eug 
 o,,,cERS 
Robert L. Turner . 
D. W. H. MacKinnon 
Heard 
President 
Vice President - Operations 
Vice President - ales 
Vice President - Engineering & Maintenance 
Treasurer and Ass'+ to the President 
ed . . . . Ass't Treasurer 
  Clerk of Corporation 
 General Legal Counsel 
Auditors 
, Transfer Agent 
Registrar 
ANNUAL REPORT FOR 1954 
~otiheast Airlines INC. 
THE PRESIDENT'S REPORT 
TO THE STOCKHOLDERS AND EMPLOYEES 
I. GENERAL 
There is submitted herewith Northeast Airlines' Balance Sheet as of December 31, 1954, 
and Profit and Loss Statement for the year 1954, certified by the Company's auditors, Lybrand, 
Ross Bros. & Montgomery. Comparisons with the previous year and a table of comparative 
statistics are also submitted. 
These statements reflect net profit after taxes of $138,112, compared with $492,913 in 1953. 
Operating profit amounted to $169,924, compared with $427,481 the previous year. 
During the first six months of the year, the airline industry as a whole became somewhat 
alarmed by rising costs and stabilized fares, together with a leveling off of passenger revenues. 
Faced, in most instances, with heavy funded debt structures, the carriers jointly asked the 
Civil Aeronautics Board for permission to discuss passenger fare increases. This permission, 
however, was refused. Your Company, although not faced with a debt problem, experienced 
the unprofitable operating trends and, consequently, reported an operating loss of $195,454 
for the six months' period, as compared with a profit of $31,568 in the similar period of 1953. 
Notwithstanding these initial operating losses, however, the Company maintained a strong 
financial position, and during the last half of the year shared with the industry in a strong 
increase in traffic which, despite the poor start, was able to produce a profit for the year. 
We believe your Company's purchase during January, 1954, of four Convair 240 aircraft 
from Pan American World Airways, Inc., which permitted the early preparation of summer 
schedules and planning of operations sufficiently in advance to publicize our services to our 
customers, as well as the operators of hotels, inns, and other businessmen in the resort areas 
of New England who serve the vacation travelers, helped substantially in our recovery. 
A glance at the "Table of Comparative Statistics" at the end of this report will indicate 
that 1954 should have been a banner year for Northeast Airlines' Stockholders and Employees, 
with Revenue Miles Flown, Passenger Revenue, Revenue Passengers Carried, and Revenue 
Passenger Miles, all achieving new highs in the Company's history. But 'the impact of rising 
costs and the poor showing for the first six months had to be overcome, and only the 
tremendous volume of traffic in the summer made possible our recovery and justified our faith 
in an augmented fleet. 
The most important event for every one interested in Northeast Airlines, Inc. that 
occurred during 1954 was the Prehearing Conference on the New York-Florida Proceeding 
which was held in Washington on September 24, 1954. A more detailed discussion of this 
proceeding is presented later in the report. 
 It will be remembered that on October 17, 1950, your 
Company entered into an agreement of merger with and 
into Delta Air Lines, Inc. The agreement provided that, 
after October 17, 1952, either party could terminate the 
same upon thirty days' written notice i_ 
f the necessary Civil 
Aeronautics Board orders had not been entered. Accordingly, 
as your officers are convinced that the Company's Florida 
application proposes the soundest solution to Northeast's problems, the Company 
on December 6, 1954 terminated the merger agreement. 
II. REVIEW OF 1954 
Financial 
The Balance Sheet as of December 31, 1954 shows a strong working capital 
position, with a current ratio of 2.45:1, as compared with 3.00:1 the previous year. 
The reason for the decline was the purchase of the four additional Convair 240 aircraft 
out of general ~orporate funds. Book value of the Common stock at the close of 1954 
amounted to $4.67 per share. 
Your Company again broke all previous records for number of passengers carried, 
particularly during the summer season. Over the peak July 4 and Labor Day week 
ends, your Company determined to accommodate as many people as possible from 
New York and Boston to the principal New England resorts. As a result, we were 
flying all night with unprecedented numbers of passengers and, we believe, a favorable 
reaction from the territory we serve. In August alone nearly 81,000 passengers traveled 
over our routes. 
During the year, we flew approximately 186,400,000 available seat miles, an 
increase from the 165,200,000 of the previous year. The passenger load factor also 
increased slightly, from 55.32% to 55.91 %, so that passenger revenue reached an 
all-time high of $7,118,264, 14.3% above 1953. Total operating revenues were up 
10.4% from 1953, but total operating expenses increased 14.2% , resulting in a decline 
in operating profit from $427,481 to $169,924. 
After the Civil Aeronautics Board denied the industry's request to discuss a 
general increase in passenger fares, your Company applied to the Board for a 107a 
raise in its fares as necessary to partially offset mounting expenses, but this was 
turned down also, with the statement that the solution should be found in merger 
"or other readjustment of route structure" rather than in increased passenger fares. 
Your management concurs, of course, in the belief that if New England is to be 
provided the air service it needs, without increased subsidy or higher fares, Northeast 
Airlines' route structure must be greatly expanded. 
Federal and State taxes of over $334,000 were charged against earnings in 1954. 
These taxes included approximately $135,000 in fuel taxes, $111,000 in payroll taxes, 
and $64,000 for Federal income tax. In addition, the Company collected Federal 
transportation taxes of $779,000, which were turned over to the Federal Government. 
 Operations 
hich occurred on November 30, when 
ew Hampshire. Two employees of the , 
Your Company regrets to report its first fatal accident 
one of its DC-3's crashed on a mountainside near Berlin, 
Company were killed, but all passengers, the pilot, and t 
covered by insurance, except for a $3,000 deductible provisi 
tion and Liability Insurance was carried to cover claims ind 
Liability and Property Damage, but incidental costs of s 
prestige cannot be recovered. 
The Company flew approximately the same number of 
hut because of the augmented fleet was able to increase Conv 
mately 2,220,000 in 1954. The operating factor, or percent 
improved slightly to 90.86% from 90.28% . 
During the year your Company contracted with Linee Aer 
through flight maintenance and inspection service at Logan I 
to the work being performed for Trans World Airlines and 
At the present time we are also negotiating similar work f 
Your Company has developed and has had approved b 
a high intensity condensor discharge light that has been ins 
and development work was undertaken in an attempt to imp 
locations where stratus cloud conditions are frequent durin 
developed after several months of experimentation and coor 
Administration and Northeast Airlines Communications and 
invaluable technical assistance furnished by Mr. Germesha 
Grier of Boston. These lights have demonstrated their abilit 
conditions and permit the pilots to land when before it woul 
output is 22,000,000 beam candle-power per light unit. T 
navigational aids that were installed at about the same ti 
operating performance. We have had numerous inquiries from 
which indicate there is substantial interest in this developmen 
to aviation. 
telephone service over most of our system last year. Thi 
operation handling during the peak period of summer opera 
will he provided for the 1955 peak period season. 
We believe these facilities justified themselves by impr 
patronage. 
survived. This plane was 
Workmen's Compensa- 
ger Liability and Public 
experimental 
at Nantucket and other 
een the Civil Aeronautics 
Departments, in addition to 
dgerton, Germeshausen and 
to penetrate low stratus and overcast 
not have been permissible. The light 
ck-et, have improved our 
and aeronautical agencies, 
a y: be a real cont.rib 
improved rewvation and 
ticipated t~ same facility 
 Flight Equipment 
Early in the year your Company purchased four Convair 240 type aircraft from Pan American 
World Airways, thereby increasing the fleet to seven Convairs and twelve DC-3's. This made it 
possible to provide the greatest number of available seat miles which the Company has been able 
to off er the traveling public throughout any year in its history. The total was temporarily reduced 
by the grounding of a DC-3 in Augusta, Maine for repairs for s- 
everal months, and the loss of the DC-3 
at Berlin caused another reduction. The Augusta ship was returned to service in December, and 
arrangements have been made for the replacement of the Berlin aircraft. 
Early in the year a lease was negotiated for a C-46F airfreighter, in line with what appeared to 
be an encouraging trend in airfreight business in our territory. The experiment was carried on for 
several months until it became obvious that this short-haul territory we serve, with truck and rail 
competition very effective, is not productive of airfreight business, unless it can he part of a longer 
haul operation. Therefore, the lease was canceled during the summer. 
At the pres- 
ent time negotiations are under way for the purchase of some DC-6B type aircraft to 
keep pace with the ever growing demand. 
Personnel Changes 
On November 15 the Directors of the Company elected Mr. Gerard E. Reed Assistant Treasurer 
of the Company to fill the vacancy caused by the resignation of Mr. Robert H. Herrnstein in 1951. 
Mr. Reed joined Northeast Airlines in 1946 as Supervisor of IBM Accounting and became Chief 
Accountant in 1951. 
 Routes and Services 
On May 13, a Civil Aeronautics Board order authorized suspension of service at Provincetown for 
a period of five years, subject to review by the Board at any time. The order was of only technical 
significance, for the Provincetown airport is so restricted in size as to prohibit scheduled airline 
service, and the Company has accordingly never served the point. 
The Civil Aeronautics Board on October 13 amended our certificate to add Newport, Vermont, 
for a two-year trial period, with service to be performed from June 15 to September 15 each year. 
Newport is a summer resort very close to the Canadian border. 
Year-round service, instead of summer seasonal service only, was inaugurated in the fall of 
1954 at Rockland, Maine. 
Service to Rutland, Vermont, was discontinued September 30 at the expiration of the one-year 
experimental period authorized by the Civil Aeronautics Board. The very small demand for services 
between Rutland and Boston did not warrant our requesting continuance of this authority. 
Early in the year, our services to the State of Rhode Island were concentrated through the 
North Central Airport between Pawtucket and Woonsocket, instead of being divided between this 
airport and the Providence Airport. 
 Winter Promotion 
Your management has recognized the need for 
increasing our volume, particularly in the winter 
time, which will tend to level out the tremendous 
seasonal fluctuation. In the winter of 1953-54, your 
Company inaugurated a winter sports development 
program in cooperation with several ski resorts with 
some modest success. Recognizing this as a long- 
range program, your Company is embarked on a more 
extensive program for the winter of 1954-55. 
Regulatory Proceedings 
On October 19, the Civil Aeronautics Board, on the basis of a stipulation entered into by the 
interested parties, issued an order terminating the Enforcement Proceeding which had been instituted 
in the fall of 1953, and which is described in the 1953 report. The stipulation included a provision 
for termination of the so-called Atlas Divestiture Order, and pursuant to such stipulation, the Board, 
on November 26, terminated the Divestiture Order. The original Divestiture Order which was dated 
April 23, 1948 and amended October 21, 1949 and February 19, 1951, finding that Atlas Corporation 
controlled both Northeast Airlines and Consolidated Vultee Aircraft Corporation and that such common 
control of Northeast and Convair was not in the public interest, directed Atlas to dispose by sale 
or otherwise of all of its shares of common stock and convertible preferred stock of Northeast owned 
by it in excess of 3 Cfo of each such class within a period of time which was extended from time to 
time. The termination order was issued by the Civil Aeronautics Board on the basis that Atlas had 
transferred its interest in Consolidated Vultee Aircraft Corporation to Gen~ral Dynamics Corporation 
and, therefore, no longer had controlling interest in Convair. 
 Personnel 
There were 946 persons employed by your Company on December 31, 1954, as compared with 
868 at the end of the previous year. The Company has contracts with six labor unions, and renewals 
of five of these were negotiated during the year. Salaries and wages amounted to $4,586,846. 
The large majority of our - 
employees participated in a group insurance plan, which provides 
benefits in the event of death or disability and also pays certain hospital, medical, and laboratory 
costs and weekly compensation. During 1954 the underwriter paid claims to our employees totaling 
$60,105.15. Of this amount $14,000 was paid for loss of life, approximately $16,000 for weekly 
indemnity, hospitalization and surgery to the ~mployees and approximately $30,000 to their dependents. 
The Company hockey team and two softball teams were sponsored during the year, and all of 
these ended well up in their respective league standings. 
There are at the present time approximately 33 employees of Northeast Airlines serving in the 
Armed Forces. I would like to take this opportunity to wish them well and an early return to 
the Company. 
Mail Pay 
During the year your Company received approximately $108,000 from the Post Office Department 
for the carriage of United States mail and approximately $1,839,000 in Federal Subsidy, or a total 
of approximately $1,947,000, compared with $1,981,000 in 1953. The amount of mail ton miles flown 
increased from 143,257 in 1953 to 145,769 in 1954. Under the present sliding scale formula, the 
Company's mail pay is reduced when passenger load factors are in excess of 50o/o for all miles 
flown each month above the average of 10,200 per day. 
The $108,000 received for the carriage of United States mail referr~d to above was computed 
on a temporary service mail rate of 75 per ton mile which was established April 1, 1954. In October, 
the Civil Aeronautics Board issued a show cause order establishing a new service mail rat~ formula 
which involved the philosophy of a multi-element rate. This is based upon a rate for line-haul pay 
and a rate for terminal pay, and has been developed by the industry. The terminal charges are 
based upon classifications of the various stations served, with the classification depending upon the 
volume of traffic enplaned at the station. This philosophy gives partial  consideration to the more 
expensive operation involved in serving the smaller stations. Furthermore, under this formula all 
carriers will receive the same rate for the carriage of air mail between the same two points. The rates 
proposed will affect some of the larger carriers hut are not expected to have an adverse effect upon 
Northeast Airlines' service mail pay and subsidy. Discussions have been under way between the staffs 
of the Civil Aeronautics Board, the Post Office Department and the carriers to determine the final 
rates under the new formula which will he acceptable to all parties involved. 
 Ill. OUTLOOK FOR 1955 
The current New York-Florida proceeding before the Civil Aeronautics Board, the most important 
route case in your Company's history, involves several .proposals for additional air service along the 
Atlantic Seaboard, principally between New York and Florida. 
In this proceeding Northeast Airlines is seeking to: (1) provide vitally needed competitive service 
to Washington and Florida; (2) provide vitally needed convenient one-carrier service from all six 
New England States to Washington and Florida; (3) enable your Company to combine the Florida 
winter peak season with the New England summer peak season; (4) save the Federal government 
over $1,800,000 in Federal subsidy annually; and, ( 5) assure continuance and growth of New 
England's vital local service. 
A great many applications were considered at the Prehearing Conference held on September 24 
in Washington, but many were dismissed in the Consolidation Order issued on January 7, 1955. 
The results of this Consolidation Order were to eliminate applications seeking authority to engage in 
foreign service, applications involving feeder service, petitions requesting investigation of equipment 
interchange at New York, and a motion to include the National-Northeast merger investigation. 
This left the New York-Florida proceeding primarily a route extension case along the Atlantic Seaboard. 
 Primary Exhibits for this case are due March 18, and Rebuttal Exhibits, April 18, with the hearings 
probably to start some time in May. 
Your Company has believed for a long time the only solution to its operating and financial 
problems is a more balanced route structure and believes that our reasons for being the third 
carrier selected to serve the New York-Florida market, as expressed in the exhibits being prepared, 
will clearly support our application. 
If the Civil Aeronautics Board should decide this case in favor of your Company, it will be a 
fitting reward for the employees and stockholders who have loyally supported Northeast Airlines 
during the last twenty years while it has built up an airline, with government support, which serves 
an annual volume of over one-half million passengers in New England. 
I sincerely trust that in the future we will be authorized a more balanced route structure, as have 
others in the past, and that we will be allowed to become a self-sufficient carrier, capable of relieving 
the government of subsidy support and, by becoming self-sufficient, assure the continuous growth 
of an essential New England air transport service. 
For the Board of Directors 
GEORGE E. GARDNER, President 
 ,rf i,res, 
.NC. 
Current assets: 
Cash 
U. S. Treasury bonds, at cost . 
Receivables: 
U. S. Government . . 
Airline traffic . 
Other . . . . 
Prepaid insurance and other expenses . 
Miscellaneous supplies (at average cost) 
TOTAL CURRENT ASSETS 
Property and equipment, at cost: 
ASSETS 
Flight equipment and related spare pa1ts . 
Hangar and service building on leased land . . 
Ground and shop equipment . . 
Improvements to rented properties 
Warehouse and land . . . . . 
Construction in progress and nonoperating property . 
Less allowances for depreciation and amortization . 
1954 
$1,420,059 
512,136 
462,656 
110,872 
51,448 
108,781 
2,665,952 
5,449,125 
664,599 
655,797 
206,040 
83,657 
25,319 
7,084,537 
3,876,953 
Property and equipment, less allowances . . 3,207,584 
Investments in airline service organizations . . 29,680 
Special funds for uninsured losses (workmen's compensation) and other 
deposits . 
Receivable under stock purchase contract (note B) 
Deferred charges: 
Route exten ion and development 
Other. . . 
56,461 
26,875 
59,347 
8,398 
$6,054,297 
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BALANCE SHEET 
As at December 31, 1954 and 1953 
1953 
$1,782,358 
1,003,438 
~ 
Q 
271,450 
434,685 
70,254 
74,317 
111,913 
3,748,415 
4,033,788 
664,599 
591,852 
204,895 
83,657 
115,275 
5,694,066 
3,498,875 
2,195,191 
24,555 
44,484 1 
26,875 
ij 
19,065 
$6,058,585 
==--------- 
LIABILITllS 
Current liabilities: 
Accounts payable - general 
Airline traffic accounts payable 
Collections and withholdings as agent . 
Accrued salaries and wages . 
Accrued federal income tax . 
Accrued social security and other taxes 
Other accrued liabilities . . . 
Unearned transportation revenue . 
Dividend payable . . . . . 
TOTAL CURRE, T LIABILITIES 
Reserve for unin ured losses ( workmen's compensation) 
Reserve for aircraft overhaul (note C) 
Def erred credits . . . . . . .  
Stock p1ncha e contract (see contra) . 
CAPITAL 
Convertible prefened stock of no par value (note D) : 
Authorized 85,000 shares 
I ued and outstanding: 
1954, 43,380 shares issued, less 36 share in treasury; 1953, 43,451 shares 
Common stock, par value $1.00 per share: 
Authorized 2,000,000 hares (note B) 
I ued and out tanding - fully paid: 
1954, 828,268 shares; 1953, 827,9931/4 shares . . . . 
I ued under tock purchase contract - pa1t paid: 
10,000 hare at 50 cent per hare paid thereon ( unpaid balance 
under contract, $26,875 shown above) 
Capital urplu , pe1 accompanying tatement . 
Earned urplu ince July 1, 1940, per accompanying tatement . 
TOTAL CAPITAL . . . 
$ 
1954 
195,462 
229,456 
126,043 
222,682 
73,000 
22,582 
67,932 
140,053 
10,836 
1,088,046 
57,76b 
143,375 
1,375 
26,875 
866,880 
5,000 
2,260,097 
776,621 
4,736,866 
$6,054,297 
1953 
$ 203,866 
200,716 
138,098 
205,242 
251,346 
47,317 
50,505 
140,111 
10,863 
1,248,064 
45,785 
93,579 
1,445 
26,875 
869,020 
827,993 
5,000 
2,258,953 
681,871 
4,642,837 
$6,058,585 
The accompanying not ar an integral part of the abov halanc 
 STATEMENT OF PROFIT AND LOSS 
For the Years Ended December 31, 1954 and 1953 
Operating revenues: 
Passengers . . . . . . . . . . . . . . . . . . 
Air mail (including amounts designated as federal subsidy) 
Express, freight and excess baggage . . 
Other, net . . . . . . . . . . 
TOTAL OPERATING REVENUES . 
Operating expenses: 
Conducting transportation . . . . . 
Maintenance and repairs (note C) . . 
Provision for d,epreciation and amortization ( note E) 
Traffic, sales and advertising . 
General and administrative . . 
Taxes other than income taxes . 
TOTAL OPERATING EXPENSES . 
OPERATING PROFIT . . . . 
Nonoperating income: 
Insurance settlements received in excess of net book amounts of aircraft 
Other income (charges) net . . . . . . 
PROFIT BEFORE FEDERAL INCOME TAX . 
Provision for federal income tax . 
NET PROFIT FOR YEAR 
1954 
$7,118,264 
1,946,748 
323,726 
62,466 
9,451,204 
4,371,794 
1,929,689 
618,782 
1,362,463 
728,345 
270,207 
9,281,280 
169,924 
38,914 
(6,350) 
202,488 
64,376 
$ 138,112 
1953 
$6,227,406 
1,981,163 
277,168 
71,571 
8,557,308 
4,004,656 
1,603,466 
447,960 
1,168,396 
677,563 
227,786 
8,129,827 
427,481 
292,284 
18,148 
737,913 
245,000 
$ 492,913 
The accompanying notes are an integral part of the above statement of profit and loss. 
 Northeast Airlines, 
INC. 
STATEMENT OF EARNED SURPLUS SINCE JULY 1, 1940 
Balance at beginning of year 
Net profit for year . . . . 
For the Year Ended December 31, 1954 
Cash dividends declared on convertible preferred stock - $1.00 per share . 
Balance at end of year . . . . . . . . . . . . . . . . . . . . 
STATEMENT OF CAPITAL SURPLUS 
I 
For the Year Ended December 31, 1954 
. $ 681,871 
138,112 
819,983 
43,362 
$776,621 
Balance at beginning of year . . . . . . . . . . . . . . . . . . . . . . $ 2,258,953 
Excess of amount paid in on 71 shares of convertible preferred stock surrendered for 
conversion over par value of 274 shares of common stock issued in exchange therefor 1,144 
Balance at end of year $2,260,097 
 NOTES TO FINANCIAL STATEMENTS 
A. Uniform System of Accounts: 
The accompanying financial statements are prepared generally in accordance with the Uniform 
System of Accounts for Air Carriers prescribed by federal authorities. Certain items in the 
balance sheet as at December 31, 1953 have been reclassified for purposes of comparison. 
B. Employee Stock Option and Stock Purchase Plans: 
During 1954 the company established a stock option plan for key employees under which 100,000 
shares of authorized and unissued common stock have been reserved for granting of options at 
a price per share not less than 85o/o of the fair market value on the dates such options are granted. 
As at December 31, 1954 options to purchase 25,000 shares of common stock at a price of $3.6125 
per share have been granted under this plan. These options will not become exercisable until 
periods subsequent to August 20, 1955. 
In addition to the foregoing plan the stockholders in 1947 reserved 100,000 shares of authorized 
and unissued common stock for sale to employees at a price, payable in instalments, not less than 
fair market value thereof at the date of purchase contract. As at December 31, 1954 no such sales 
had been made other than 10,000 shares sold under contract to the president of the company 
in 1947 at the then market price of $31,875. The balance of $26,875 receivable on this contract 
becomes due on or before May 24, 1957. 
C. Reserve for Aircraft Overhaul: 
The company charges certain major periodic overhaul costs against a reserve provided by charges 
to maintenance expense. Provisions for aircraft overhaul reserve charged to maintenance expense 
amounted to $58,517 in 1954 and $57,976 in 1953. The costs of aircraft overhaul charged against 
the reserve were $8,721 in 1954 and $23,336 in 1953. 
D. Convertible Preferred Stock: 
Under the provisions of the convertible preferred stock, the company shall not declare any 
dividend or redeem or retire any shares of stock or make any distribution to stockholders if 
immediately thereafter the net worth of the company would be less than $20.00 for each share 
of convertible preferred stock immediately thereafter outstanding. 
As at Deoember 31, 1954, the adjusted conversion rate of the convertible preferred stock is 33/s 
shares of common stock for each share of convertible preferred stock surrendered for conversion. 
All or ahy part of the convertible preferred stock may be called for redemption at any time at 
$22.00 per share plus dividends accrued thereon to the redemption date. In case of any liquidation, 
whether voluntary or involuntary, the convertible preferred stock shall be entitled to receive 
$20.00 per share plus dividends accrued thereon to the day of payment. 
 E. Depreciation of Flight Equipment and Related Spare Parts: 
Effective January 1, 1954 the company revised depreciation rates on certain flight equipment and 
related spare parts. As a result depreciation expense for 1954 was approximately $110,000 less 
than depreciation would have been if rates in effect during 1953 had been continued. 
F. Retirement Plan: 
Payments to the trustee under the company's noncontributory retirement plan for employees 
aggregating $151,615 for 1954 (including approximately $45,000 on account of past service) have 
been charged to general and administrative expense. If the unfunded past service cost of the plan 
had been paid in lump sum as of December 31, 1954 approximately $400,000 additional would 
have been required. 
G. Contingencies: 
The company has joined with nine other airlines in an agreement with Triborough Bridge & 
Tunnel Authority. Under this agreement the company guarantees its proportional share in case 
of any default under a long-term lease of a Manhattan terminal building by the Authority to a 
corporation organized by the several airlines. The company also has entered into a long-term 
sublease for a portion of the space in the - 
building. 
MILITARY INSTALLA- 
TIONS rely on Northeast's 
fast, convenient schedules 
to move their personnel to 
important new assignments 
or to speed them on a wel- 
come leave or furlough. 
INC. 
 BRINGS 
Through each cycle of seasons, more 
vacationers and business-bound travellers 
keep on discovering the unexcelled con- 
venience of Flying Northeast! 
Whether our guest arrives from a for- 
eign land and first meets Northeast by 
connecting in New York ... or whether he 
is a native Bostonian who has adopted the 
modern mode of travelling to Montreal 
... more and more people are saving time 
and trouble flying fast Northeast to their 
destination. 
In a region so varied and abundant in 
points of interest . . . an area combining 
"the best of all the rest" ... swift inter- 
state air travel is a necessary service in 
behalf of the vacation, business, and indus- 
trial interests of this region. For an area 
justly famous for its medical, technical, 
and educational achievements . . . a land 
rich in beauty . . . steeped in antiquity 
. . .. unmatched in recreational versatility 
... people naturally "set their sights" on 
New England. And 
the easiest, fas test, most comfortable way to get there 
is to Fly Northeast! 
 VIBRANT CE T RS F COMMERCE 
Northeast's highways in the sky 
knit together all New England 
na iona 
Canada . an 
est French-speaking 
world .. only minutes 
Northeast. 
The LAU RENTIANS offer th 
breathtaking beauty of the Alps 
... heart of some of the world's 
finest skiing. And there's more time 
on these slopes, less time 
ling, by flying Northeast. 
HISTORY RE-VISITED. New Eng- 
land's visitors seek out the antique 
dwellings; the preserved battle 
sites, the statues and monuments 
which stand as stoic sentinels 
to America's dramatic beginnings. 
Northeast saves the time and effort 
of thousands of these visitors each 
year. 
HUB OF THE HUB. Busy Logan 
International Airport, only a few 
hours from the other side of the 
globe, is home base to Northeast. 
Here is located Northeast's main 
overhaul base, one of the finest in 
the world. 
ISE. Prod- . 
Eng lander's 
ntiveness and 
aided in their 
's shortening of 
essentia I busi- 
vast, 
New 
oom 
rills 
n 
de 
asf 
 AUDITOR'S REPORT 
I 
LYBRAND, Ross BRos. & MONTGOMERY 
80 FEDERAL STREET 
BOSTON 10 
NORTHEAST AIRLINES, INC., 
BOSTON, MASSACHUSETTS. 
We have examined the balance sheet of Northeast Airlines, Inc. 
as at December 31, 1954 and the related statements of profit and loss, 
of earned surplus and of capital surplus 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. 
In our opinion, the accompanying statements present fairly the 
financial position of Northeast Airlines, Inc. at December 31, 1954 and 
the results of its operations for the year then ended, in conformity 
with generally accepted accounting principles applied on a basis con- 
sistent with that of the preceding year. 
Boston, Massachusetts 
February 24, 1955 
Lybrand, Ross Bros. & Montgomery 
 PASSENGER REVENUE GROWTH 
$5,535,763 
$5,570,124 
$6,227,406 
$7,118,264 
Millions 2 3 4 5 6 7 8 
CARGO REVENUE GROWTH 
$9,140 
$204,991 
$213,115 
$239,422 
$272,831 
Thousands 100 200 300 400 
 COMPARATIVE STATISTICS 
1946 1947 1948 1949 1950 1951 1952 1953 1954 
Revenue Miles Flown . 4,177,375 3,947,030 3,386,881 4,021,226 4,235,126 4,743,281 4,729,487 5,689,854 6,316,944 
Completion of Scheduled 
Miles 
. . . 82.46% 83.81% 87.86% 93.54% 92.58% 92.94% 91.46% 90.28% 90.86% 
Passenger Revenue . $4,256,115 $3,468,913 $3,241,912 $3,992,450 $4,440,034 $5,535,763 $5,570,124 $6,227,406 $7,118,264 
Revenue Passengers Car- 
ried  
. . . . 417,095 325,172 272,292 324,963 372,497 454,738 427,685 463,712 523,489 
Revenue Passenger Miles . 83,848,737 62,143,281 52,091,160 61,957,458 70,468,046 87,507,199 83,675,411 91,398,933 104,226,881 
System Load Factor 65.76% 51.24% 48.02% 48.36% 51.82% 60.91% 58.04% 55.32% 55.91% 
Passenger Revenue Per 
Revenue Mile Flown $1.0189 $.8789 $.9572 $.9928 $1.0484 $1.1671 $1.1777 $1.0945 $1.1269 
Revenue Per Passenger 
Mile $ .0507 $.0558 $.0622 $.0644 $ .0630 $ .0633 $ .0666 $ .0681 $ .0683 
  Printed in U.S.A.