Southern Airways Interim Annual Report 1979

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Southern
Southern Airways, Inc.
1979 Interim Report
Three Months Ended March 31
Balance Sheets
As of March 31
(in thousands)
Assets
Current Assets
Cash and temporary investments .. ....... .. ..... $
Accounts receivable - net ..................... .
Inventories - net .......... ................. . .
Prepayments ............................... .
Total Current Assets ....................... .
Property and Equipment - less
allowances for depreciation and maintenance ..... .
Deferred Charges and Other Assets . ............. .
Liabilities and Stockholders' Equity
Current Liabilities
$
Accounts and notes payable ........ ........ .... $
Air traffic liability .......................... .
Accrued expenses and other I iabil ities ........... .
Total Current Liabilities ................ ... ... .
Long-Term Debt ............................ .
Deferred Credits ............ .. ....... ..... .. .
Stockholders' Equity
Series A Convertible Preferred Stock - $1 .00 par value
Shares issued and outstanding -
163,196shares (1978) ...................... .
Common Stock - $2.00 par value
Shares issued and outstanding - 1,908,056 shares
(1979) and 1,581,465 shares (1978) . .... ....... .
Other paid-in capital ......................... .
Retained earnings ........................... .
Total stockholders' equity .................... .
$
1979
11,709
18,482
8,630
507
39,328
78,855
2,361
120,544
14,709
9,961
15,798
40,468
56,105
I
691
3,816
6,053
13,411
23,280
120,544
$
$
$
$
1978
3,557
18,378
7,839
665
30,439
80,953
2,389
113,781
16,573
8,929
12,348
37,850
57,200
338
163
3,163
5,123
9,944
18,393
113,781
NOTE: A more detailed presentation of quarterly results (Form 10-0 filed with the Securities and
Exchange Commission) is available to stockholders upon request.
Statements of Operations
Three Months Ended March 31
(in thousands except per share amounts)
Operating Revenues
Passenger ........................... .
Charter ........................... . ....... .
Freight and other ........................... .
Pub I ic service ..... ...... . ...... .......... .. .
Total Operating Revenues
Operating Expenses
Flying operations .... .... .. . ... .... . ... ... . . .
Maintenance ...... ..... .................... .
Aircraft, traffic and passenger servicing ......... . _
General and administrative .................... .
Depreciation and amortization .... . ... ......... .
Promotion, sales and other . .. .......... . ...... .
Total Operating Expenses ..................... .
Operating Income (Loss) .. . .............. . . . . .
Interest and Other Non-Operating Expenses - Net
Loss before Income Taxes . . . . . . . . . . . . . . . . ..
Income Ta x Credit .... . .. ......... . .. . .. .... .
$
Net Loss .......... .. .. ... ......... .. .. . .... $
Net Loss Per Average Common Share Outstanding . .. $
Operating Statistics
Revenue plane miles (000)* ...... . ....... ... .. .
Seat miles flown (000) * ...................... .
Passengers carried* .......................... .
Passenger miles flown (000) * .................. .
Passenger load factor* ..... .... .............. .
Yield per passenger mile* ..................... .
Operating cost per seat mi le .... .. .. ........ .. . .
Book value per share of common stock ........ . .. $
* Scheduled Service
1979
42,847
248
4,173
825
48,093
16,208
6,177
14,320
2,358
3,399
4,931
47,393
700
1,548
(848)
(358)
(490)
(.26)
8,361
652,963
1,016,195
338,131
51.8%
12.67t
7.19i:
12.20
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Southern
$
$
$
$
1978
34,846
2,456
3,550
1,304
42,156
14,679
6,069
12,865
2,267
2,949
4,963
43,792
(1,636)
1,260
(2,896)
(1,304)
(1 ,592)
(1 .02)
7,080
535,295
889,836
275,217
51.4%
12.66i:
7.31 t
11 .01
Chairman's Report
At a public meeting on April 26, the Civil Aeronautics
Board announced its unanimous approval of the
Southern-North Central merger. A final written order is
expected by May 10, to be submitted to the President of
the United States for approval. Consummation of the
merger and the formation of Republic Airlines could take
place in June.
The establishment of Republic Airlines will be a happy
event for the stockholders, employees and customers of
both companies. With routes extending from New England
to Southern California and from Canada to the Caribbean,
Republic's customers wi 11 have faster and more frequent
schedules. The stockholders and employees wi 11 share the
benefits of a new and enlarged business.
Despite poor operating conditions occasioned by severe
weather, the first quarter's anticipated loss was reduced
substantially compared with last year. The quarter
produced a $490,000 loss instead of the $1,592,000 loss a
year earlier. Th is equates to a 23 cents per share loss instead
of a loss of $1 .02 per share a year ago .
Revenues reached $48.1 million in the first quarter, up 14.1
per cent from $42.2 million last year. The increase resurted
primarily from a 22.9 per cent increase in revenue passenger
miles.
Operating expenses totaled $47.4 million in the similar
quarter, an increase of 8.2 per cent compared with $43.8
million in 1978. More efficient scheduling concepts,
increased seating in some aircraft and generally tight cost
controls held down expense increases although total
available seat miles flown increased 10 per cent.
During the quarter, Southern took advantage of
administrative flexibi I ity granted by air! ine deregulation .
This permitted introduction of new service between Atlanta
and Washington's Dulles International Airport, as well as
service between Atlanta and New York's La Guardia
Airport, with the Dul !es stop en route. A new route was
. established between Me mph is and Detroit. Memphis has
gained its first Southern nonstop service to and from
Atlanta . In turn, service was suspended at four unprofitable
points: Columbus, Ga., Charleston and Columbia, S. C., and
Charlotte, N. C. Southern retains authority to reinstate this
service. As deregulation permits, the Company wi 11
continue to reallocate service from unproductive markets to
more profitable ones.
Respectfu I ly,
~
Frank W. Hulse
Chairman
May 1, 1979
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S<>uthern
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We've Got The
Right Connections
When an airline can get
your cargo to all 50 states
and practically anywhere
in the free world,
you know they've got
the right connections.
And Southern has.
Southern