~ortheast Airlines
ANNUAL REPORT
1956
GEORGE E. GARDNER
PAUL F. COLLINS
A.A.LANE
D. W. H. MacKINNON
HAMILTON HEARD
R.H. KERR
OFFICERS
President, General Manager and Director
Chairman of the Board of Directors of the Company
and President of Fibremold, Inc., Medford, Mass.
Vice President - Operations
Vice President - Engineering and Maintenance
Treasurer
Vice President - Personnel
DIRECTORS
JACQUELINE COCHRAN President of Jacqueline Cochran, Inc., New York
JAMES F. FITZGERALD President of Fitzgerald Construction Company, Boston, Mass.
RADU IRIMESCU Assistant to the President, Atlas Corporation, New York
ALBERT C. McMENIMEN Financial Vice President, Boston Edison
EUGENE L. VIDAL
LAURENCE F. WHITTEMORE
Company, Boston, Mass.
Gene Vidal Designs and Processes, Darien, Conn.
Chairman of the Board of Directors
Brown Company, Berlin, New Hampshire
GERARD E. REED, Assistant Treasurer
HENRY E. FOLEY, Clerk of Corporation
H. E. BIXLER, Assistant to the President
PAUL V. McPEAKE, Director of Customer Service
EDWIN W. BREED, Director of Sales
CHARLES H. McKENNEY, Director of Traffic
Transfer Agent... ............................................................... OLD COLONY TRUST COMPANY
Registrar ............................................................ THE FIRST NATIONAL BANK OF BOSTON
Auditors ........................................................ LYBRAND, ROSS BROS. AND MO TGOMERY
General Counsel ............................................................................ FOLEY, HOAG A D ELIOT
Annual Meeting .............................................. Fourth Tuesday of March in Boston at 10 A.M.
Fiscal Year Close .................................................................................................. DECEMBER 31
~orfheast Airlines,
INC.
Boston 28, Mass.
HIGHLIGHTS OF 1956
Authorization to extend your company's routes southward to Florida has been granted by the Civil Aeronautics
Board for a period of five years and subject to renewal, thus enabling Northeast Airlines to serve the East Coast
from Maine to Florida. Initial service to Washington, D. C. was begun in November, 1956 and to Miami in January,
1957. Service to Jacksonville and Tampa, Florida will start within the next few months.
A successful public financing in December, 1956 has augmented our capital by approximately seven million
dollars, permitting us actively to pursue our previously announced plans for expansion of routes and services.
Negotiations were concluded for the purchase of additional four-engine aircraft to be delivered in 19_
57.
Delivery o.f ten Douglas DC-6B's will be completed by September, 1957 and delivery of five Bristol Britannias is
scheduled for October-November, 1957. The Britannia will be the first long-range turboprop aircraft to be used in
commercial service in the United States.
Upon receiving authority to extend our routes, plans for augmenting your company's personnel and operational
facilities were immediately put into effect. The extraordinary expense incurred as the result of this action, taken late
in the year, is reflected in the increase of operating expense for 1956. Operating revenues for 1956 were $10,300,000,
up some $200,000 from 1955. However, this increase was not sufficient to offset rising operating expenses and the
initial expense necessary to establish service to Florida stations.
1956 1955
Revenue Miles Flown . 6,626,106 6,590,634
Completion of Scheduled Miles 88.62% 92.53%
Passenger Revenue $8,138,375 $7,938,798
Revenue Passengers Carried 592,967 582,478
Revenue Passenger Miles . 119,252,967 116,450,932
System Load Factor 58.50% 59.22%
Passenger Revenue Per Revenue Mile Flown $1.2282 $1.2046
Passenger Revenue Per Passenger Mile $.0682 $.0682
Ratio of Current Assets to Current Liabilities 5.3 to 1 2.2 to 1
Number of Employees . 1167 964
Number of Shareholders 3061 1819
To Our Shareholders, Employees and Friends:
It is gratifying to report that 1956 was without doubt your company's greatest year of progress. Many events
took place, each of which forecast accelerated continuing growth for Northeast Airlines.
In July 1956, the hearings on your company's application for certification to serve Washington, D. C. and
Florida were concluded. In August, the Civil Aeronautics Board announced its decision to grant authorization to
Northeast Airlines to establish a new route to both of these areas for a five year period subject to renewal. Service
to Washington, D. C. was activated in late November, 1956 and to Miami in January, 1957. We will commence
serving Philadelphia, Baltimore, Jacksonville, Tampa and St. Petersburg-Clearwater during the coming months
as our new equipment becomes available.
The first delivery of your company's order for ten Douglas DC-6B's was received in January 1957, which
permitted the start of first class flights between Boston, New York and Miami on January 20. The remaining aircraft
will go into service as they are received in the coming months. In October, 1957 we expect to receive the first three
of our order for five Bristol Britannias. These will be the first long-range turboprop aircraft to be used by any
airline in the United States. By the end of November 1957, we expect delivery of the remaining Britannias and
early December should see the inauguration of three hour and fifteen minute flight service between New York and
Miami ... the fastest service over this route provided by any airline.
In an endeavor to get service started to Florida, your company leased a DC-6A from The Flying Tiger Line and
put this aircraft into air coach service between New York and Miami on January 9, 1957. This aircraft was lost in
the tragic accident on February 1, 1957 and broke our record of 24 years without a fatality to a passenger.
Our sincere sympathy goes to the injured and bereaved. While the financial losses are covered by insurance,
this in no way replaces the hurt caused by a tragedy of this kind.
The cause of the accident is as yet undetermined, but is being investigated by the Civil Aeronautics Board,
Civil Aeronautics Adminstration, civil authorities, the insurance companies, and your company's experts.
In December 1956, Carl M. Loeb, Rhoades & Company headed an underwriting group which placed 784,402
shares of common stock at $9.50 per share, with proceeds to the company amounting to approximately $7,000,000.
Some seventy-eight percent, or $5,500,000, will be applied toward the payment for ten DC-6B aircraft and related
equipment and the remaining funds are to he allocated to general corporate purposes. This underwriting has been
beneficial to your company in ways other than financial. The interest in Northeast Airlines engendered by the
underwriting group has augmented and broadened geographically our roster of shareholders who now number
3061 located in forty-two states, Hawaii, Puerto Rico and four foreign countries.
On February 7, 1957 the CAB requested Northeast Airlines to show cause as to why its air mail subsidy should
not be terminated. We recognized that, as our Florida operations expanded, our subsidy-need would be eliminated.
In view of the limited volume of our present Florida operations, however, we feel that the Board's action is pre-
mature, and our attorneys are protesting the action.
In anticipation of receiving authority to extend our routes to the South, plans were formulated for a general
expansion of operations to be put in motion as soon as our applications were approved. These operational expansion
plans, among other things, call for establishment of new management posts, some of which have already been
accomplished. Our plans for expansion will he actively pursued so as to assure the maximum in operational eff ec-
tiveness at the earliest possible date.
Our present IBM reservation system is being supplemented by the addition of an electronic Teleregister System,
which when completed will tie all of Northeast's major stations into a completely automatic reservation system.
Reservations can then be handled far more quickly and economically. We also have under consideration, among
other airport facility improvements, the acquisition of new and larger hangar and maintenance facilities at Boston,
New York and Miami.
The charts appearing on the enclosed sheet illustrate pictorially increases achieved by your company. As these
charts show, our progress continued its upward climb. Total operating revenues for 1956 amounted to $10,300,171,
up from 1955 by two percent. However, operating expenses also increased by seven percent to $10,728,571. The
difference in operating results was in most part attributable to three factors ... unusually adverse flying weather
conditions in the first half of 1956 ... a summer equipment shortage, resulting in less than normal volume summer
traffic ... the necessity for activating our plans for operational expansion some months before the expected benefits
of our new routes and expanded air fleet would become apparent.
On January 28, 1957 your Board of Directors accepted with regret the resignation of Robert L. Turner as Vice
President - Traffic and Sales, and expressed their appreciation of Mr. Turner's contribution to your company's
development.
The acquisition of additional flight equipment and the knowledge that our expansion plans are well underway
assure us that the coming years will see the most dramatic rise in operating results that we have ever enjoyed.
As in the past, our shareholders, our friends in the financial community and our customers have been most
helpful and their cooperation is sincerely appreciated. With their continued support, in conjunction with the efforts
of our loyal and experienced organization, we are confident that our progress in 1957 will be outstanding.
Respectfully Submitted
~ I~~
March 4, 1957
7
PRESIDENT
New Routes and Services
For some six years, the Civil Aeronautics Board had under consideration the granting of an additional cer-
tificate to be awarded a new carrier for the New York-Florida route. Your company's efforts to secure this greatly
desired new route met with success and on August 10, 1956 the Civil Aeronautics Board announced its decision to
award Northeast Airlines the New York-Florida certification. The Board order granting this route extension was
formally issued on September 28, 1956 and the certificate became effective on ovember 27, 1956, on which date
your company inaugurated its run to Washington, D. C.
The certificate extended Northeast Airlines' service southward to Philadelphia, Baltimore, W ashinglon, Jack-
sonville, Tampa, St. Petersburg-Clearwater and Miami for a five-year period. Northeast was granted unrestricted
rights from its present system into any of the new stations.
In making its decision the Board said, "The New York-Miami market is the foremost travel market in the
country ... generating about 33 percent more passenger miles than tihe next largest market, Los Angeles- ew York,
from almost three times the number of passengers." The CAB also stated, "We are also satisfied that ortheast's
operation will be a profitable one ... The Atlantic Coast route is expected to develop almost two billion passenger
miles and about three million passengers in 1956."
A word as to the time limitation of our new certification. The Civil Aeronautics Board, in some instances, when
granting authority to serve new routes, issues such certification for a stipulated period. Prior to the expiration of
this period, the certificate holder may petition the CAB for renewal of its authorization or for a permanent certifica-
tion, and the existing authorization then continues until the application is acted upon. We are fully confident that
we will obtain the beneficial operating results which the CAB has forecast for our operation of the new route, and
that our renewal application will, when filed, be favorably acted upon.
The long-haul route extension to Florida provides your company with a year-round, seasonally balanced travel
market of substantial traffic density, thus giving it access to increased revenues and at the same time enabling it to
use its equipment on a more economical year-round basis.
Operations to Florida were inaugurated with our tourist flight service to Miami on January 9 and followed on
January 20 by our initial first class flight service. Due to the unfortunate accident at La Guardia Airport on
February 1, tourist flights were suspended temporarily. First class flights to Miami are continuing on schedule and
tourist flights out of New York will be resumed on March 22.
Your company has filed for authority to extend its operations northward to Quebec City, Canada. As yet no
procedural dates have been set. We will advis~ you in future interim reports as to our progress for authority to
serve this new route.
Flight Equipment
Dependability, passenger comfort, range, cruising speeds and economy were among the deciding factors in our
selection of the new aircraft we are acquiring in the coming year.
The Douglas DC-6B is considered to be one of the finest aircraft being built today. These aircraft are designed
so that seating capacity can be varied from 60 persons on first class flights to 76 persons on tourist flights, all with
two-abreast seating. Cruising speed is approximately 325 miles per hour. The first of these aircraft was delivered
in mid-January and was used on our inaugural first cla s service to Miami on January 20. A total of three will be
in service by the end of March and the remaining even aircraft will be delivered at intervals, with final delivery
being made in September. Each DC-6B will go into scheduled flight service as oon as it is received.
With its Bristol Britannias, ortheast Airlines will be the first airline in the United States to use long-range
four-engine turboprop aircraft and, incidentally, will offer, at that Lime, three hour and fifteen minute ramp-Lo-ramp
schedules from ew York to Miami ... the fastest service available between ew York and Florida. The Brilannias
have a cruising speed of approximately 405 miles per hour and are being designed to seat 92 per ons on fir t cla s
flights and 133 persons on tourist flights. Our present plan call for the use of the e aircraft on fir t cla flights only,
and all five are e pected to be operating in scheduled flight ervice by the beginning of the Florida winter season.
We are purchasing e ten ive electronic equipment, such a Airborne Weather Radar y tern , S lection Calling Units
and Automatic Direction Finder , for in tallation on each of these aircraft, a well as the new Dougla DC-6B's.
With the addition of these fifteen new long-rane aircraft Lo our present fleet of twelve Dougla DC-3' , six
Convair and one Curtiss Commuter CW-20T, ortheasl Airlines will Lake its place among the leaders in passenger
air carriers.
Financing
In December 1956, Carl M. Loeb, Rhoades & Company headed a group of twenty-eight underwriters that
placed 784,402 shares of common stock at $9.50 per share, with proceeds to the company amounting to approx-
imately $7,000,000. Fifty percent was offered to the general public, 6% to Atlas Corporation, and approximately
44%, or 353,947 shares of the total number were offered to the other holders of record of common stock of the com-
pany. Shares were offered to stockholders on the basis of four shares for each five shares held.
Shareholders were required to exercise their right to purchase the shares to which they were entitled by
December 20, 1956. Atlas Corporation agreed to purchase at the public offering price, any shares (of the 353,947
shares offered to holders of common stock of the company) remaining unsold after December 20, such shares to be
purchased for investment.
Future financing for 1957 is currently under negotiation, and it is anticipated that this will be accomplished
by bank loans and some form of equity financing.
Advertising and Promotions
The opening of service to Washington in late November and the extension of the route to Miami in January
were announced through heavy advertising and promotional campaigns. Leading metropolitan newspapers in the
major cities that we now serve carried large-space advertising, which featured hard-hitting copy and an emphasis
on our newest deluxe equipment. To assure full coverage, radio and television spot commercials, outdoor boards and
direct mail were used to good advantage.
Plans have been formulated to intensify advertising and promotional act1v1tles so as to coincide with the
delivery of new flight equipment as it is received. This increased emphasis on coverage is expected to maximize the
number of revenue passengers carried.
Personnel
One of our first actions in preparation for the expansion of routes and services, and to cover the duties of Mr.
Turner, was the creation of five new management posts and the appointment of the following men to these positions :
R.H. Kerr, Vice President - Personnel
H. E. Bixler, Assistant to the President
P. V. McPeake, Director of Customer Service
E.W. Breed, Director of Sales
C.H. McKenney, Director of Traffic
Reflecting a record year of growth and expansion, your company's personnel roster at the close of 1956 carried
the names of 1167 employees, the largest in ortheast's history at year end. The coming year will see a continuing
increase in personnel as our new aircraft are received and our new stations are opened.
We are extremely proud to report that forty-four percent of our organization members have been with Northeast
for more than five years. Holders of ten-year pins now number 355 and Captains Milton Anderson and Stafford
Short, Miss Josephine O' eil and Mr. Frank Barker hold twenty-year pins.
A training program has been initiated to assure that both old as well as new management and supervisory
employees become fully versed in company policies, with particular empha is on our expanding operations.
The Employee Benefit Program has among its many features two of major significance ... group insurance
and the retirement program. The Group Insurance Plan in which company employees participate, and which is
considered to be the finest available, includes life insurance provi ion as well a health and accident provisions.
The Pension Plan, to which Lhe company is Lhe sole contributor, covers all employees afler Lhey have been employed
by ortheast for one year and have reached the age of 25 years. In addition Lo the ha ic pension plan for all em-
ployees, pilots have a supplemental contributory retirement plan which became effective May, 1955.
Balance Sheet as at December 31, 1956 and 1955
ASSETS
Current assets:
Cash . . .
Subscriptions to common stock (payment received January 2, 1957)
Receivables:
U. S. Government .
Airline traffic . . . . . . . . . . . .
Estimated receivable under loss carry-back provisions of Internal Revenue Code
Other . . . . . . .
Prepaid insurance and other expenses
Miscellaneous supplies ( at average cost)
Total current assets .
Property and equipment, at cost:
Flight equipment and related spare parts ( note B)
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
Property and equipment less allowances . .
Advance payments, interest and other costs on purchase of flight equipment
(note C) .
Investments in airline service organizations .
Special funds for uninsured losses ( workmen's compensation) and other deposits
Receivable under stock purchase contract ( note D)
Deferred charges:
Route extension and development
Other
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 on preferred stock
Total current liabilities
LIABILITIES
4% notes payable under bank credit agreement (note B)
Reserve for uninsured losses (workmen's compensation)
Reserve for aircraft overhaul . . .
Stock purchase contract (see contra) .
CAPITAL
Convertible preferred stock of no par value, 20,369 hare ,
converted or redeemed in 1956 .
Common tock, par value $1 per share:
Authoriz d 2,000,000 shares (note D)
Issued and outstanding - fully paid:
1956, 1,773,689 share including 392,201 hares i ued January 2, 1957;
1955, 905,804 share .
I ued und r Lock purchase contract - part paid;
10,000 har at 50 c nt p r hare paid thereon ( unpaid balance und r
contract, $26,875 hown abov ) .
Capital urplu , p r a companying Lalement .
Earn d urplu , per ac ompanyinO' Lal m nl (not B)
Total capital .
1956
- -
$ 4,590,338
3,520,00i
501,650
626,370
193,082
201,249
131,730
166,495
9,930,918
5,398,658
702,963
783,359
184,063
83,657
392,093
7,544,793
4,849,016
2,695,777
3,370,580
37,315
66,069
26,875
214,612
113,750
$16,455,896
$ 764,346
319,611
166,846
315,968
24,287
61,900
200,869
1,853,827
2,470,000
68,163
147,782
26,875
1,773,689
5,000
9,279,659
830,901
11,889,249
$16,455,896
Th accompanying note are an int gral part of the above balanc h et.
1955
$1,238,789
557,968
553,946
126,452
151,319
81,013
2,709,487
5,298,532
702,963
677,100
168,263
83,657
41,840
6,972,355
4,323,375
2,648,980
1,227,358
29,930
66,352
26,875
139,774
22,851
$6,871,607
$ 212,735
256,967
149,523
238,682
128,500
26,625
38,600
183,326
5,092
1,240,050
300,000
65,876
148,121
26,875
407,380
905,804
5,000
2,642,060
1,130,441
5,090,685
$6,871,607
STATEMENT OF PROFIT AND LOSS
For the Years Ended December 31, 1956 and 1955
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 .
Provision for depreciation and amortization
Traffic, sales and advertising .
General and administrative .
Taxes other than income taxes
Total operating expenses
Operating profit (loss)
Nonoperating income:
Gain on sale of aircraft .
Miscellaneous charges, net
Profit (loss) before federal income tax
Provision for federal income tax ( in 1956,
refund under loss carry-back provisions)
Net profit (loss) for year
1956
- -
$ 8,138,375
1,724,466
341,778
95,552
10,300,171
5,240,149
2,175,247
639,469
1,466,739
902,169
304,798
10,728,571
(428,400)
(19,170)
(447,570)
(148,030)
($ 299,540)
The accompanying notes are an integral part of the above statement of profit and loss.
1955
- -
$ 7,938,798
1,703,761
373,664
104,077
10,120,300
4,719,511
1,969,622
784,534
1,437,913
763,943
296,390
9,971,913
148,387
377,217
(20,774)
504,830
124,893
$ 379,937
STATEMENT OF EARNED SURPLUS for the Year Ended December 31, 1956
Balance at beginning of year .
Net loss for year .
Balance at end of year (note B)
$1,130,441
299,540
$ 830,901
STATEMENT OF CAPITAL SURPLUS for the Year Ended December 31, 1956
Balance at beginning of year .
Excess of amount paid in on 20,343 shares of convertible preferred stock surrendered for conversion
over par value of 58,4823/4 shares of common stock issued in exchange therefor . . . .
Excess of amount paid in over par value of 25,000 shares of common stock issued to key employees
under stock option plan (note D) . . . . . . . . . . . . . . .
Excess of amount paid in or subscribed over par value of 784,402 share of common stock sold, less
expenses of issue
Other charges
Balance at end of year
$2,642,060
348,366
65,313
6,223,977
(57)
$9,279,659
The accompanying notes are an integral part of the above tatement of earned surplus and of capital surplus.
NOTES TO FINANCIAL STATEMENTS
Note 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 the Civil Aeronautics Board.
Note B -Bank Credit Agreement:
Notes payable to banks under a credit agreement dated September 30, 1955 are secured by a mortgage on the
company's flight equipment and related spare parts. Under terms of this agreement $8,130,000 additional credit
was available to the company at December 31, 1956, subject to certain conditions, with commitment fee of of
1 % per annum payable on unused balances. Loans bear 4% interest and are payable in quarterly instalments
beginning March 31, 1958 and ending not later than December 31, 1962. Proceeds of loans can be used only for
the purchase of the Douglas aircraft, related equipment and spare parts referred to in note C. Interest and com-
mitment fee of $133,725 less estimated federal income tax benefit of $45,694 have been capitalized to December
31, 1956 as additional cost of the equipment. Such charges will continue to be capitalized until the new equipment
is placed in service. This treatment does not accord with the provisions of the Uniform System of Accounts for
Air Carriers, but the company has applied for. approval thereof by the Civil Aeronautics Board.
Among other provisions the credit agreement restricts the amount of cash dividends which may be paid on the
company's common stock to a portion of the net income accrued subsequent to December 31, 1954. Under that re-
striction none of the earned surplus at December 31, 1956 was available for the payment of such common dividends.
Note C - Commitments for Purchase of Flight Equipment:
The company is purchasing ten Douglas Model DC-6B aircraft, related equipment and spare parts and ground
equipment at a cost of approximately $16,500,000. At December 31, 1956 advance payments, interest and other
costs aggregated $3,259,517. Based on the estimated delivery schedule the remaining payments for the aircraft
and substantially all of the equipment and spare parts are due in 1957.
The company has also agreed, subject to certain conditions, to purchase for delivery in 1957 five Bristol Britannia
Model 305 aircraft at a cost, together with related equipment and spare parts, of approximately $18,500,000. At
December 31, 1956 advance payments and other costs aggregated $111,063; $220,000 is payable early in 1957,
and the balance due on each aircraft is payable upon its acceptance by the company.
Note D-Employee Stock Option and Stock Purchase Plans:
In 1954, the company established a stock option plan for key employees under which 75,000 shares of authorized
and unissued common stock are still reserved at December 31, 1956 for granting of options at a price per share
not less than 85% of the fair market value on the dates such options are granted, but no such options were
outstanding at that date. Options for 25,000 shares of common stock at a price of $3.6125 per share were exer-
cised in 1956.
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 installments, not less than fair market value thereof at
the date of purchase contract. As at December 31, 1956, no such sales had been made other than 10,000 share
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 was due May 24, 1957, but extended in 1957 to May 24, 1960.
Note E - Retirement Plans:
Payments to trustees under the company's retirement plans for employees aggregating $227,427 for 1956 have
been charged to general and administrative expen e. The amount unf uncled under the plans as of December 31,
1956 was approximately $350,000.
Note F - 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 hare 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 ublease for a portion of the space in th building.
The Civil Aeronautics Board ha instituted action which may lead to reduction or elimination of mail sub idy
payment a of February 7, 1957. Such payments received by the company for the year 1956 totaled $1,611,000.
LYBRAND, Ross BROS. &. MONTGOMERY
ACCOUNTANTS ANO AUDITORS
Northeast Airlines, Inc.
Boston, Massachusetts
OtTfltOIT
PHILADE.Li,IHIA CLEVE LANO DALLAS
CHICAOO HOUSTON
iOSTOH "OCKP'ORO
BALTIWq, .. ~ ST. LOUIS SAN ,-AANCl5CO
WASHINGTON LOUISVILLr: f-05 AN.OE.LES
PITT$DUfltOH SEATTLE
COOPERS e., LYBRAND
IN AAEAS OP' THE WORLD
0UT$1O1t THE UNIT.ED STATE&
We have examined the balance sheet of Northeast
Airlines, Inc. as at December 31, 1956 and the related state-
ments 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, 1956 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 pre-
ceding year.
Boston, Massachusetts
February 20, 1957
RECORD OF PROGRESS
1956 1955 1954 1953 1952 1951 1950 1949 1948 1947
Revenue Miles Flown 6,626,106 6,590,634 6,316,944 5,689,854 4,729,487 4,743,281 4,235,126 4,021,226 3,386,881 3,947,030
Completion of Scheduled Miles 88.62% 92.53 90.86 90.28 91.46 92.94% 92.58 93.54% 87.86 83.81
Passenger Revenue $8,138,375 $7,938,798 $7,118,264 $6,227,406 $5,570,124 $5,535,763 $4,440,034 $3,992,450 $3,241,912 $3,468,913
Revenue Passengers Carried 592,967 582,478 523,489 463,712 427,685 454,738 372,497 324,963 272,292 325,172
Revenue Passenger Miles 119,252,967 116,450,932 104,226,881 91,398,933 83,675,411 87,507,199 70,468,046 61,957,458 52,091, 1'60 62,143,281
System Load Factor 58.50% 59.22 55.91 55.32 58.04 60.91 51.82 48.36 48.02 51.24
Passenger Revenue $1.2282 $1.2046 $1.1269 $1.0945 $1.1777 $1.1671 $1.0484 $ .9928 $ .9572 $ .8789
Per Revenue Mile Flown
Passenger Revenue $ .0682 $ .0682 $ .0683 $ .0681 $ .0666 $ .0633 $ .0630 $ .0644 $ .0622 $ .0558
P-er Passenger Mile