1 9 4 1 N UAL R E.. R T O F 
WESTERN AIR LINES,INC. 
  OFFICERS 
DIRECTORS 
REGISTRAR 
STOCK TRANSFER AGENT 
AUDITORS 
GENERAL OFFICES 
William A. Coulter, President 
L. H. Dwerlkotte, First Vice-President, Treasurer 
Charlie N. James, Vice-President, Operations 
Thos. Wolfe, Vice-President, Traffic 
Paul E. Sullivan, Secretary 
E. H. Brown, Asst. Secretary 
William A. Coulter 
L. H. Dwerlkotte 
Harold P. Fabian 
Alfred Frank 
Stanley W Guthrie 
Citizens National Trust & Savings Bank, L9s Angeles, California 
Security-First National Bank of Los Angeles, Califo,rnia 
Peat, Marwick, Mitchell & Co. 
Lockheed Air Terminal, Burbank, California 
 ~ 
* On April 17, 1926, a tiny Western Air Express plane left Los Angeles for Salt Lake City on Southern Cali- 
fornia's first air mail flight. One month later, on May 23rd, this same plane carried America's first scheduled air 
passenger, marking the true beginning of the air transport era. 
* From that day to this, Western Air Lines has 
been a leader in the development of air transportation. Over half of today's air route mileage we t of Kansa 
City was pioneered by vVestern Air Lines. Looking toward the future, applications have been filed for 4880 
miles of additional route which would give the company an integrated system, stretching from the tip of Alaska 
to the Mexican border. 
* Thus W cstcrn Air Lines, only airline owned west of the Rockies, demonstrates that 
it is till the pioneer of western air transport and, more than ever, deserves its title, "Born in the West-Owned 
in the West- Serving the West." 
 TO THE 
s,oc  KHOLDERS OF 
FEBRUARY 28, 1942 
* There is submitted 
herewith Profit and Loss Statement of your com- 
pany for the calendar year 1941, together with the 
Balance Sheet of the company as at December 31, 
1941, to which is appended the report of Messrs. 
Peat, Marwick, M,itchell & Company, accountants 
and auditors. 
Operations of the company for the year 1941 re- 
sulted in a net profit of $5,980.64 after all taxes and 
charges, including provision of $197,780-43 for de- 
preciation. In comparison, the year 1940 resulted in 
a net profit of $139,585.26, after a provision of 
$141,745.81 for depreciation, and $35,000 for Fed- 
eral Income Taxes. 
REVENUES* Passenger revenue amounted to 
$1,055,821.10 increasing 40% over the total for 
1940 of $752,140.24 and for the first time in the 
16-year history of the company exceeded mail rev- 
enue thereby becoming the largest single source of 
revenue. In 1941 passenger revenue accounted for 
52 % of operating revenues as compared with 45.6% 
in 1940 and 36% in 1939. This increase in passenger 
revenue required added flying schedules for which 
authorizations for the carrying of mail had not been 
granted. During the year 1941, these added sched- 
ules accounted for 877,300 of the miles flown by the 
company, 27.9% of its total revenue miles from 
which no mail revenue was received. Applications 
have been filed for authorization to carry mail on 
these schedules. 
Mail revenue for the yea~ 1941 amounted to 
$848,654.64 which is 5.0% higher tl~an the 1940 
total of $808,487.99. The 1941 total includes an 
estimate of $23,025.6o in mail revenue earned for 
the period June 12, 1941 to December 31, 1941 
over the company's route between Great Falls, 
Montana, and Lethbridge, Canada. The Company 
 \000,000 
1500,000 
EXPENSE 
0, 
,.., 
a, 
1--------6::-----. TRAFFIC 
(EXCL. SAL ARJES) 
INSURANCE 
began carrying mail on this route June 12, 1941 and 
a petition for a determination of the mail rate there- 
for is now pending before the Civil Aeronautics 
Board. 
Revenues from the transportation of air express 
for the year 1941 amounted to $69,022.32, as com- 
pared with $50,835.89 for the year 1940, or an in- 
crease of 35.7%. 
OPERATING EXPENSES* Substantial increases 
in operating costs more than offset the gains in 
operating revenues. While the revenue miles flown 
by the company increased 30%, operating expenses 
increased 36%. This increase resulted primarily 
from increases in personnel, wage levels, costs of 
materials and supplies, and the additional mile- 
age flown. Operating expenses per revenue mile 
amounted to $.6454 in 1941 as compared with 
$.foo8 in 1940. The experience of Western Air 
Lines in this respect is similar to that of the major- 
ity of other airlines. 
FINANCIAL POSITION* The attached balance 
sheet of the company as at December 31, 1941, 
shows current assets of $518,913-46, including cash 
of $102,729.89, as against current liabilities of 
$291,043.89. As at December 31, 1940, current as- 
sets amounted to $505,992.89, including cash of 
$260,469.21 as against current liabilities of 
$179,024.30. 
EQUIPMENT* An adequate inventory of parts 
and supplies required to maintain equipment at the 
highest of standards is being carried. Inventory of 
Parts and Supplies at the encl of 1941 amounted to 
approximately $144,000 as compared with approxi- 
mately $67,000 at the encl of 1940. The Federal 
Government has recognized the essential part that 
the commercial airlines are playing in the War 
Program and has issued priorities to permit the pur- 
chase of ample parts and supplies. Property and 
equipment purchased and delivered during the year 
amounted to approximately $592,000.00 including 
three Douglas DC-3 twenty-one passenger airplanes 
which cost $395,884.09 and were ordered during 
1940. 
NEW ROUTES* On June 1, 1941 your Company 
began operations over the route from Great Falls, 
Montana, to Lethbriclge, Canada. 
Applications are now pending before the Civil 
' Aeronautics Board for the following additional 
routes: 
(a) Between Los Angeles and San Francisco, 
California. 
Between Los Angeles and Sacramento-San 
Francisco, California, via the intermediate 
points Bakersfield, Visalia, Merced, and 
Stockton, California. 
Between Los Angeles and El Centro, Cali- 
fornia, via Palm Springs, California. 
(b) Between San Diego, California, and Phoenix, 
Arizona, via El Centro, California, and Yuma, 
Arizona. 
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( c) Between Los Angeles, California, and Den- 
ver, Colorado, via Las Vegas, Nevada, and 
Grand Junction, Colorado. 
( d) Between Lethbridge, Canada, and Nome, 
Alaska, via Calgary, Edmonton, and Grand 
Prairie, Canada, and Juneau, Anchorage, and 
McGrath, Alaska, with shuttle service be- 
tween Anchorage and Fairbanks, Alaska. 
The applications listed as (a) and (b ) have been 
heard but decisions have not been reached by the 
Board. Hearings have not been set on the other 
applications. 
On December 12, 1941 the Board suspended all 
further proceedings in pending applications for new 
routes and intermediate stops on existing routes. It 
is not known what future disposition will be made 
by the Board with respect to pending applications, 
but it is believed that no new routes will be awarded 
for the duration unless deemed necessary to the war 
program. 
THE ORGANIZATION* The pressure of rising 
industrial employment has caused an increased 
turnover in personnel. However, an adequate staff 
of experienced employees is being maintained in all 
MAIL POUNDS EXPRESS POUNDS 
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departments and arrangements are being made to 
train replacement personnel for those positions 
now occupied by employees who n'lay be called to 
active service. The fine spirit of cooperation and 
loyalty displayed by the personnel of the organiza- 
tion throughout the year 1941 has been a source of 
deep satisfaction to your officers and directors, and 
they now desire to express their sincere appreciation. 
OUTLOOK FOR 1942 
* The nation is at war, 
and the future is unpredictable. The impact of the 
war is bound to cause some dislocations with the 
airlines as with all other businesses. It is not be- 
lieved, however, that these dislocations will seri- 
ously affect either the statu or the service of the 
airlines, and assurance may be given to you that the 
safety of commercial flights will not be impaired. 
Your company welcomes the part that it is able to 
play in the war program ahd pledges itself to aid 
the war effort whenever and wherever possible. 
t/l'~t:<~ 
' 
PR ES ID E T 
 Current Assets: 
Cash in Banks and on Hanel 
Accounts Receivable: 
ASSETS 
United States Post Office Department . 
Interline and Agents' Traffic Balances . 
Customers' Accounts Receivable. . . 
Sundry ( including $2,316.57 due from Officers and Employees) 
Less Reserve for Doubtful Accounts . . . . . . . . . . 
Inventory of Parts and Supplies, at the lower of Cost or Replace- 
ment Market . . . . . 
Total Current Assets . 
Prepaid Insurance, Rent, Taxes, etc. 
Investments: 
Securities of Other Corporations. . . . . . . . . . 
Property Not Used in Operations, At Cost-less Reserve for 
Depreciation of $7,883.05 . . . . . . . . . . . 
Properties and Equipment: 
Land and Land Improvements . . . . . . . . . . . . 
Buildings and Leasehold Improvements . . . . . . . . . 
Airplanes, Propellers, Engines and Flying Equipment ( See Note) 
Radio Stations, Furniture and Fixtures, Shop and Other Equipment 
Less Reserve for Depreciation 
Deferred Charges: 
Development of Air Routes 
Total . . . . . 
$ 
BALANCE SHEET AS AT DECEMBER 31, 1941 
$ 102,729.89 
133,379.65 
44,631.67 
74,485.30 
24,721.00 
277,217.62 
5,098.17 272,119.45 
144,064.12 
518,913.46 
62,419.51 
1,724.34 
7,031.02 8,755.36 
26,690.07 
102,145.80 
1,368,305.17 
196,334.70 
1,693,475.74 
734,711.65 958,764.09 
6,820.89 
$1,555,673.31 
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LIABILITIES 
Current Liabilities: 
3% Equipment Notes Payable, portion due in 1942 ( See 
Accounts Payable-Trade . . . . . . . 
Interline and Agents' Traffic Balances Payable 
Accrued Liabilities: 
Salaries and Wages 
Taxes, including Social Security Taxes . 
Insurance 
Other . 
Total Current Liabilities . 
Reserves for Overhaul of Equipment rented to Others 
Unused Portion of Tickets Sold . . . . . . . 
3% Equipment Notes Payable, due 1943 to 1946 (See ote) . 
Capital Stock and Surplus: 
Capital Stock: 
Authorized, 500,000 Shares of $1.00 each 
Outstanding, 409,954 Shares 
Capital Surplus 
Operating Deficit from December 1, 1934 
Contingent Liabilities: 
Sundry Claims and Law uits aggregating $25,000.00 
Total . . . . . . . . . . . . . . 
ote) 
17,247.41 
14,428.59 
9,653.48 
1,725.25 
409,954.00 
648,214.12 
1,058,168.12 
55,871.20 
$ 60,000.00 
180,935.65 
7,053.51 
43,054.73 
291,043.89 
27,884.67 
31,447.83 
203,000.00 
1,002,296.92 
$1,555,673.31 
NOTE: During 1941 the Company received delivery of three Douglas DC-3 airplanes which, complete with engines, propellers and accessoric, cost $395,884.09. To finance the purchase of these airplanes, the Company borrowed $273,000.00. Title to thee 
airplanes is vested in the lending Bank as collateral security for the indebtedness. This financing arrangement require semi-annual payment of $30,000.00. 
 PROFIT AND LOSS ACCOUNT FOR THE YEAR ENDED DECEMBER 31, 1941 
Opera ting Revenue: 
Passenger 
Mail. 
Express, Freight and Excess Baggage 
Other Transportation . . . 
Incidental Services (Net) .. 
Net Operating Revenue 
Operating and General Expenses 
Depreciation . . . . 
Operating Loss . . 
Miscellaneous Income: 
Interest and Discounts Received . 
Gain on Disposal of Equipment . 
Income from Property not used in Operations-Net . 
Sundry . . . . . . . . . . . . . . . . 
Less Miscellaneous Charges- Interest . 
Miscellaneous Income (Net) . 
Net Income . . . . . . . 
$1,826,920.33 
197,780.43 
2,730.96 
3,883.53 
8,490.53 
794.57 
15,899.59 
4,463.28 
$ 1,055,821.10 
848,654.64 
83,701.79 
6,441.66 
24,625.90 
2,019,245.09 
2,024,700.76 
5,455.67 
11,436.31 
$ 5,980.64 
NOTE: Deductions allowable for Federal Income Tax purposes exceed the Taxable Income for the 
year and no provision for such Tax has been made. 
SURPLUS (DEFICIT) ACCOUNTS 
Balance as of December 31, 1940 . . . . . . . . 
Net Income for Year ended December 31, 1941 . . . 
Excess Provision for Federal Income Tax for Prior Year . 
Balance as of December 31, 1941 . . . . . . . . 
Capital 
Surplus 
$ 648,214.12 
$ 648,214.12 
Operating 
Deficit 
65,911.31 
5,980.64 
4,059.47 
55,871.20 
 ACCOUNTANTS' REPORT 
To the Board of Directors of 
WESTERN AIR LINES, INC. 
We have examined the Balance Sheet of W cstern Air Lines, Inc., ( formerly 
Western Air Express Corporation) as of December 31, 1941, and the statements 
of Profit and Loss and Surplus (Deficit) for the year then ended, have reviewed 
the system of internal control and the accounting procedures of the Company 
and, without making a detailed audit of the transactions, have examined or tested 
accounting records of the Company and other supporting evidence, by methods 
and to the extent we deemed appropriate. Our examination was made in accordance 
with generally accepted auditing standards applicable in the circumstances and 
included all procedures which we considered necessary. 
In our opinion, the accompanying Balance Sheet and related statements of 
Profit and Loss and Surplus (Deficit) present fairly the position of Western Air 
Lines Inc. at December 31 1941, and the results of its operations for the ear, 
in conformity with generally accepted accounting principles applied on a ba i 
consistent with that of the preceding year. 
Los Angeles, California 
February 27, 1942 
PEAT, IARWICK, IITCHELL & CO. 
. 
 TRAFFIC STATISTICS 
1938 1939 1940 
Revenue: 
Passenger . .................. ...... $ 451,157 $ 503,998 $ 752,140 
Mail ..... . .. ............ . .... .... 754,650 809,980 808,488 
Express, Freight and Excess Baggage .. 39,651 45,249 58,094 
Other ..... .. . ... ... .............. 34,145 28,020 29,786 
Total .. ........................ $1,279,603 $1,387,247 $1,648,508 
Revenue Miles Flown .................. 2,309,938 2,277,161 2,399,338 
Revenue Passengers .. .................. 28,738 30,075 47,407 
Average Passengers per Revenue Mile Flown 4.57 4.85 6.59 
Average Revenue per Passenger Mile .... .. .0428 .0457 .0476 
Passenger Seat Miles Flown ......... ... . 26,276,444 27,564,517 32,359,017 
Revenue Passenger Miles ........ . ..... . 10,551,761 11,035,541 15,803,768 
Load Factor . ........... ........ 40.16 40.04 48.84 
Mail Pounds Carried ... . 893,920 957,884 951,451 
Express Pounds Carried .. ...... ' . ' 
..... 312,209 361,017 566,427 
OPERATING STATISTICS 
1938 1939 1940 
Expense: 
1941 
$1,055,821 
848,655 
83,702 
31,067 
$2,019,245 
3,136,917 
69,791 
7.30 
.0461 
48,592,298 
22,892,281 
47.11 
1,289,505 
821,514 
1941 
Percent of 
Increase 
1 941 over 1 940 
40.4 
5.0 
44.1 
4.3 
22.5 
30.7 
47.2 
10.8 
( 3.2) 
50.2 
44.8 
( 3.5) 
35.5 
45.0 
Percent ot 
Increase 
1941 over 1940 
Depreciation ...................... $ 162,567 $ 142,844 $ 141,746 $ 197,781 39.5 
Other Operating and General Expenses 1,123,017 1,158,231 1,347,742 1,826,920 35.6 
Total Operating Expenses ........ $1,285,584 $1,301,075 $1,489,488 $2,024,701 35.9 
Operating Expenses per Revenue Mile .... .5565 .5714 
Percent of Scheduled Service Performed .. 95.66 95.65 
Number of Employees (Average) ... . . ... 173 194 
Brackets denote decrease 
.6208 
96.39 
241 
.6454 
96.85 
330 
4.0 
0.5 
36.9 
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WESTERN AIR LINES, INC. 
FEB RUA RY, 1942 
LEGEND 
- PRESENT EXISTING ROUTES OF WESTERN AIR LINES - 1,411 MILES 
-=--=-:> PROPOSED ROUTES OF WESTERN Al R LINES - 4,880 MILES 
PROPOSED 
EXISTING 
ALTERNATE ROUTE OF WESTERN AIR LINES 
ROUTES OF OTHER CARRIERS 
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