Western Air Lines Annual Report 1945

W E S T E R N A I R LINES, INC.
Officers
William A. Coulter, President
Leo II. Dwerlkotte, Executive Vice-President
Charlie N. James, Vice-President, Operations
'Plios. Wolfe, Vice-President, Traffic
Paul E. Sullivan, Vice-President & Secretary
J. J. Taylor, Treasurer
Directors
William A. Coulter
Leo H. Dwerlkotte
Stanley W. Guthrie
Glenn C. Wharton
George Albert Smith
Registrar
Chase National Bank,
New York, New York
Citizens National Trust & Savings Bank,
Los Angeles, California
Stock Transfer Agent
New York Trust Company,
New York, New York
Security-First National Bank
of Los Angeles, California
Auditors
Peat, Marwick, Mitchell & Co.
General Offices
6331 Hollywood Boulevard,
Los Angeles 28, California
New Wings over the West
FLASHING ACROSS THE SKIES, come the first of Western's postwar fleet, fulfilling the promise
of a new era in air transportation. Already in operation is the war-tested DC-4, whose four
mighty engines speed its 44 passengers through the air at 230 miles per hour. Now in pro
duction is the still swifter and more luxurious DC-6 with its pressurized cabin, full-size sleeper
berths and 300-mile-per-hour speed. Also on order is the sensational new Consolidated 240 which,
sometime in 1947, will replace the faithful DC-3. This remarkable twin-engine transport will
set new standards of speed, luxury and economy, bringing the benefits of air travel within reach
of all. By late 1947, this entire fleet, totaling 43 airplanes and representing an investment of
$17,350,000.00 will be in operation, serving the needs of travelers and shippers over the farflung
airways of Western America.
[2]
March 23, 1946 There is submitted here
with Consolidated Profit and Loss Statement
of your Company for the calendar year 1945,
including the operations of Inland Air Lines,
Inc., a subsidiary, together with the Consoli
dated Balance Sheet of the Company as of De
cember 31, 1945, to which is appended the re
port of Messrs. Peat, Marwick, Mitchell & Co.,
accountants and auditors.
Operations of the Company for the year
1945, including the operations of Inland Air
Lines, Inc., resulted in a net profit of $208,-
102.24 after all taxes and charges including
provision of $554,724.00 for depreciation and
$150,900.00 for estimated Federal taxes on
income for the year 1945. In comparison, the
year of 1944 including seven months opera
tion of Inland Air Lines, Inc., resulted in a net
profit of $135,827.54 after provision of $321,-
321.53 for depreciation and $165,876.48 for
Federal taxes on income.
Phe improvement in net income is largelv
the result of 79% more revenue miles being
flown in 1945, made possible by placing into
operation additional airplanes leased or pur
chased from the U. S. Government.
Revenues 7,279,009 revenue miles were
flown in 1945 as compared to 4,057,495 in
1944, an increase of 79%. Passenger load fac
tors continued at a high level during 1945,
being 84.34% as compared to 86.28% in
[3]
RELATION OF REVENUE TO EXPENSES
(IN MILLIONS OF DOLLARS)
0 12345678
1944. The combination of increased miles
flown and a high passenger load factor re
sulted in an increase in passenger revenue of
$2,485,001.57 or 78.42%. This increase was
obtained in spite of a 7.68% reduction in
passenger fares on July 1, 1945. The passenger
revenue total of $5,653,829.86 represents
79% of all operating revenue.
Mail revenue amounted to $1,239,396.60,
as compared to $836,556.04, an increase of
48%. Express freight, and excess baggage reve
nue amounted to $205,980.94 as compared to
$ 154,990.69, an increase of 3 3 %.
Operating Expenses Although operating
expenses per revenue mile flown dropped from
$.9915 in 1944 to $.9414 in 1945 as a result of
the 79% increase in revenue miles flown, basic
costs such as wages and materials have con-
sistentlv followed a rising trend. Personnel
training and turnover have been factors in in
creasing costs. The expansion of services and
facilities and the necessity of preparing for
anticipated further expansion of services in
1946 has substantially increased the operating
costs of your Company.
Financial Position The attached consoli
dated Balance Sheet of your Company as of
INC< >ME
DOLI LAR
PASSENGER REVENUE $ .79
EXPRESS, FREIGHT,
AND EXCESS BAGGAGE .03
MAIL REVENUE .17
OTHER .01
$ 1.00 1.00
EXPENSE
DOILAR
0.44 WAGES AND SALARIES
.07 DEPRECIATION
.06 TAXES
.11 EQUIPMENT MAINTENANCE
.07 GASOLINE AND OIL
.04 INSURANCE
.18 OTHER
.03 TRANSFER TO SURPLUS
December 31, 1945 shows current assets of
$2,534,865.61 including cash of $1,407,813.89
as against current liabilities of $1,770,717.66.
As of December 31, 1944 current assets
amounted to $1,827,911.31, including cash of
$398,762.81 as against current liabilities of
$1,145,823.09.
planes, representing a combined total of 312
passenger scats, arc all owned except five
Douglas DC-3's which are leased from the
United States Government.
O11 December 12, 1944, a contract was en
tered into with the Douglas Aircraft Company
for the purchase of five Douglas DC-4 and
100,000,000
80,000,000 60,000,000
To improve the working capital position of
your Company and provide funds for the ex
pansion of facilities and equipment, 102,488
shares of capital stock were offered to share
holders on December 21, 1945, at $20.00 per
share on the basis of one new share for each
four held. The offering was not underwritten
but 98.4% of the stock was subscribed for, re
sulting in $2,017,280.00 proceeds to your
Company. Of this amount, $961,060. was re
ceived on or before December 31, 1945.
Equipment and Facilities As of Decem
ber 31,1945 your Company, and its subsidiary,
Inland Air Lines, Inc., operated fourteen
Douglas DC-3 twenty-one passenger airplanes,
including one undergoing conversion, two
Lockheed Lodestar 14-passcnger airplanes,
two Douglas C-47 cargo airplanes and one
Stinson single engine airplane. These air-
five DC-6 airplanes involving a total cost of
$5,025,000. On November 30, 1945, this con
tract was amended to include five additional
DC-6 airplanes at a cost of $2,975,000.
Six Douglas DC-4 airplanes were received
from the United States Government during
1945 and two additional DC-4's had been ar
ranged for and subsequently received. These
airplanes will either be purchased or leased
and approximately six months will be required
to accomplish the necessary conversion and
overhaul of each of them.
Your management has also placed an order
for twenty Consolidated Model 240 twin-
engine airplanes. These airplanes arc designed
to carry 40 passengers at 300 miles per hour
and will involve a total cost of approximately
$4,500,000.00. The latter airplanes arc in
tended to replace the Douglas DC-3's. These
new twin-engined airplanes and the Douglas
[5]
DC-6's will be delivered to your Company in
1947, while all of the DC-4's will he delivered
and in operation during 1946.
In connection with the proposed transfer
of the airline terminal in Los Angeles, a con
tract was entered into on October 25, 1945,
for the erection of a new hangar, shop and of
fice building at the Los Angeles Airport. It is
estimated this building which will cost approx
imately $1,500,000.00, will be ready for occu
pancy about November 1, 1946.
Considerable expansion and improvement
in ticket offices has been undertaken by your
Company during 1945 and further work of
this nature will occur in the coming year.
Generally, it appears that the expansion pro
gram of equipment and facilities which was
started during 1945 will continue for the next
two years.
New Routes Applications are pending be
fore the Civil Aeronautics Board for the fol
lowing additional routes:
(a)Between
Los Angeles, California and Rio
de Janeiro, Brazil and Buenos Aires, Ar
gentina via La Paz and Mexico City,
Mexico; Guatemala City, Guatemala;
San Jose, Costa Rica; Balboa, Canal
Zone; Bogota, Colombia; Iquitos, Peru;
Cobija and Santa Cruz, Bolivia; Asun
cion, Paraguay; Curitiba, Sao Paulo and
Porto Alegre, Brazil; and Montevideo,
Uruguay.
(b) Between Salt Lake City, U&dTTnTcLAIbin"
querque, New Mexico, (via Provo and
Price, Utah; Grand Iuncti^H^funtfeso-
and Durango, Colorado.
(c) Between Sheridan, Wyoming and Rapid
City, South Dakota.
(d) Between Cheyenne, Wyoming and Den
ver, Colorado.
(e) Between Los Angeles, California and
Honolulu, T. H. and between San Fran
cisco, California and Llonolulu, T. II.
(f) Between San Francisco, California and
Seattle, Washington via Sacramento and
Chico, California; Klamath Falls, Bend,
The Dalles and Portland, Oregon; As
toria, Aberdeen-Hoquiam and Olympia,
Washington. Also, between San Fran
y
0
1926 1927 1928 1929 1930 1931 1932 1933 1934 1935 1936 1937 1938 1939 1940 1941 1942 1943 1944 1945
1942
1943
1944
?AS
1942
1943
1944
1945
1942
1943
1944
1945
cisco, California and Seattle, Washing
ton via Oakland, Santa Rosa and Eureka,
California; North Bend, Marshfield, Al
bany, Corvallis and Portland, Oregon.
(g)Between
Seattle, Washington and Great
Falls, Montana via Spokane, Washing
ton, Coeur D' Alene, Idaho and Kalispell,
Montana.
(h)Between
San Francisco, California and
Butte, Montana via Oakland and Sacra
mento, California; Reno, Nevada and
Boise, Idaho.
(i) Between Las Vegas, Nevada and San
Francisco, California.
(j) Between Los Angeles, California and San
Francisco, California via Ventura, Santa
Barbara, Santa Maria, San Luis Obispo,
Paso Robles, Coalinga, King City, Mon
terey, Santa Cruz, San Jose and Palo Alto,
California.
(k) Between Lethbridge, Canada and Nome,
Alaska via Calgary, Edmonton and
Grand Prairie, Canada; and Juneau, An
chorage and McGrath, Alaska, with sup
plementary service between Anchorage
and Fairbanks, Alaska.
(l) Between Seattle, Washington and Nome,
Alaska via Ketchikan, Juneau, Anchorage
and McGrath, Alaska with supplemen
tary service between Anchorage and Fair
banks, Alaska.
(m) Between Denver, Colorado and Minne-
apolis-St. Paul, Minnesota via Ft.
Morgan, and Sterling, Colorado; North
Platte and Norfolk, Nebraska; Sioux City,
Iowa and Mankato, Minnesota.
(n) Between Huron, South Dakota and Chi
cago, Illinois via Mitchell and Yankton,
South Dakota; Sioux City, Ft. Dodge,
Waterloo and Dubuque, Iowa and Rock
ford, Illinois.
(o) Between El Centro, California and Dal
las, Texas via various intermediate cities.
(p) Between Salt Lake City, Utah and Dallas,
Texas via various intermediate cities.
(q) Between Reno, Nevada and El Paso,
[8]
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ASSETS
Current Assets:
Cash in banks and on hand
Accounts receivable:
United States Post Office Department . .
$ 167,034.39
United States Army Air Forces (Note 1 ) 253,974.63
Interline and agents' traffic balances 188,393.80
Customers' accounts receivable 148,375.92
Sundry (including $18,106.11 due from employees) ....
70,254.22
Inventory of parts and supplies at the lower of cost (first-in,
first-out) or replacement market
Subscriptions to capital stock (7,320 shares @ $16.50 and 49,833
shares @ $20.00) (Note 2) 1,117,440.00
Less payments received 1,113,560.00
Investments:
Sundry securities 4,337.34
Propcrtv not used in operations at cost--less reserve for deprecia
tion of $2,108.81 16,877.82
Properties and Equipment, at cost:
Land 8,921.40
Buildings and leasehold improvements 174,328.25
Airplanes, propellers, engines and flying equipment (Note 3) .
2,1 50,541.54
Radio stations, furniture, fixtures, shop and other equipment . .
876,106.68
3,209,897.87
Less reserve for depreciation 1,579,354.99
Deposits on equipment purchase contracts (Note 4)
Routes, Contracts and Leases:
As recorded on books of subsidiary company 108,557.06
Represented bv excess of cost of stock of subsidiary over net assets
thereof 44,993.51
Prepaid rent on airplanes leased from the United States Government .
Prepaid insurance, rent, taxes, etc
$1,407,813.89
828,032.98
299,018.74
2,534,865.61
3,880.00
21,215.16
1,630,542.88
586,404.00
1 53,550.57
264,174.51
179,640.22
$5,374,272.95
AS OF DECEMBER 3 1
,
19 4 5
LIABILITIES
Current Liabilities:
Notes payable to bank
3% equipment notes payable to bank, portion due in 1946
(Note 3)
Accounts payable--trade
Interline and agents' traffic balances payable
Accrued salaries, wages, taxes, insurance, etc
Provision for Federal taxes on income
Unused portion of tickets sold
3% equipment notes payable to bank, due after 1946 (Note 3) . . .
Reserve for aircraft and engine overhaul
Minority stockholders interest in subsidiary company
Capital stock subscribed ( 57,153 shares) (Note 2)
Capital stock of $1.00 par value per share. Authorized 1,000,000 shares;
issued and outstanding 409,954 shares
$ 300,000.00
142,000.00
696,328.15
4,506.91
484,766.92
143,115.68
1,770,717.66
129,671.80
170,000.00
147,492.11
30,127.88
1,117,440.00
409,954.00
Surplus:
Capital surplus $ 628,249.68
Earned surplus 970,619.82 1,598,869.50
Contingent Liabilities:
Damage claims, if any, in excess of insurance coverage which is
carried in substantial amounts
$5,374,272.95
NOTES TO FINANCIAL STATEMENTS
1. The Accounts receivable from the United States Army Air Forces is stated after adjustments for renegotiation of charges to Army contracts for the years 1942 to 1945 inclusive and adjustments of charges to terminated contracts as agreed upon with the Termination Con
tracting Officer. Such adjustments aggregated approximately $175,000.00 and the reserve for contingencies previously provided therefor together with the reduction in Federal taxes on income resulting from disallowed charges to Army contracts were adequate to meet the
amount of the adjustments agreed upon.
2. On December 28, 1945 the Company offered its shareholders the right to purchase at $20.00 per share, 102,488'/2 shares of its capital stock of $1.00 par value on the basis of one share for each four shares owned. In addition an offering of options to purchase 25,436 2/3
shares of the Company's capital stock of $1.00 par value at a price of $16.50 per share at any time from December 1, 1945 to December 1. 1947 was made to certain of its officers and employees and the officers and employees who exercise their options will be offered the
right to purchase at $20.00 per share, not to exceed 6,359 1/6 shares, on the basis of one share for each four shares purchased under such options. It is contemplated that the Company will offer 63,591 2/3 additional shares of its capital stock of $1.00 par value at future dates
under and in compliance with the provisions of the Employees' Stock Purchase Plan and the Management Stock Purchase Plan approved by the shareholders on January 3, 1945. At December 31, 1945 options were exercised and subscriptions received for 57,153 shares.
3. Title to two Douglas DC-3 airplanes is registered in the name of a bank as security for a loan covering a portion of the purchase price of said airplanes. As of December 31, 1945 a balance of $22,000.00 remains unpaid. Five other Douglas DC-3 airplanes are subject to
chattel mortgages in favor of a bank as security for a promissory note dated May 15, 1945, on which $290,000.00 remains unpaid on December 31, 1945.
4. In December 1944 and November 1945 Western Air Lines, Inc. entered into contracts with Douglas Aircraft Company for the purchase of fifteen airplanes at a cost of $8,000,000.00. In accordance with the terms of these contracts, deposit payments of $50,000.00 and $25,000.00
were made in January 1945 and January 1946, respectively. Progress payments totaling $512,500.00 were made in September and November 1945. A final payment of $302,500.00 was made on January 18. 1946 upon delivery of one airplane and it is contemplated that further
payments totaling $1,210,000.00 will be made in March and April 1946 upon delivery of four airplanes. A progress payment of $743,750.00 will be payable on or before January 1, 1947 and it is contemplated that payments totaling $5,156,250.00 will be made during 1947
upon delivery of the other airplanes. On September 24, 1945 the Company purchased 16 engines at a total cost of $239,040.00 and a deposit payment of $23,904.00 was made on December 31, 1945.
FOR THE YEAR ENDED DECEMBER 31, 1945
Operating Revenue:
Passenger
Mail
Commercial express, freight and excess baggage
Equipment rentals and incidental services . .
Operating expenses $5,624,543.58
General and administrative expenses 673,346.39
Depreciation 5 54,724.00
Other Income:
Profit from fixed fee United States Army Air Forces contract . . . .
Net income from concession operations:
Operating revenue $317,442.85
Less operating expenses 259,831.20
Income from property not used in operations (net)
Interest and discounts received
Sundry
Operating Profit
Other Charges:
Interest paid 13,196.69
Loss on disposition of property 665.12
Sundry 12,656.48
Profit before Taxes on Income
. . .
Provision for Federal normal income and surtax
15,781.00
57,611.65
780.07
5,834.70
1,220.69
Minority stockholders' interest in net income of subsidiary .
Net Income
STATEMENT OF CONSOLIDATED SURPLUS
Consolidated Capital Surplus:
Amount at December 31, 1944
Expenses re offering of Capital Stock (Note 2)
Amount at December 31, 1945
Consolidated Earned Surplus:
Amount at December 31, 1944 . . . . .
Net income for the year
Amount at December 31, 1945
$5,653,829.86
1,239,396.60
205,980.94
58,721.42
7,157,928.82
6,852,613.97
305,314.85
81,228.11
386,542.96
26,518.29
360,024.67
150,900.00
209,124.67
1,022.43
$"208,102.24
$ 648,214.12
19,964.44
$ 628,249.68
$ 762,517.58
208,102.24
$ 970,619.82
[ 12 }
Texas via various intermediate cities.
(r) Between Albuquerque, New Mexico and
El Paso, Texas via various intermediate
cities.
(s) A number of secondary routes and addi
tional cities as intermediate stops on ex
isting routes.
Legal proceedings on all of the applications,
excepting items (m) to (r) inclusive have
been completed and a final decision from the
Civil Aeronautics Board is expected in the
near future. No prediction can be made as to
what such decisions may be.
Your Company expects to inaugurate service
over the Los Angelcs-Dcnver route about April
1, 1946. Service to Palm Springs was started
on November 16,1945, which was extended to
El Centro and from El Centro to San Diego
on January 13, 1946.
Operations to Alaska for the Air Transport
Command were terminated on September 1,
1945. During three years a total of 7,721,059
miles were flown without injury to person or
damage to aircraft and at the same time setting
a record for economy of operation and utiliza
tion of aircraft.
The Organization At the close of a year in
which the pressure of work has been particu
larly heavy, our gratitude and commendation
are due each of the 1,674 employees of the
Company for their continued loyalty and co
operation. We are fortunate in having the
services of so fine a group of men and women.
On January 3,1945, the corporation's share
holders approved and adopted an Employees'
Stock Purchase Plan and a Management Stock
Purchase Plan and allocated 33,010 shares and
43,300 shares, respectively, of the corpora-
tion's unissued capital stock to the two plans.
The purchase price was fixed at $16.50 per
share, the market price of the stock on the dav
the plans were approved.
Outlook for the Future A substantial ex
pansion in mileage to be flown and gross rev
enues to be derived may be reasonably antici
pated during the year 1946. A11 increase in
number of airplanes in service will make it
possible for your Company to be of service to
the many persons whose travel desires have
been denied during the postwar period and to
improve its service to the thirty cities on your
Company's system.
However, several clouds loom to dim the
otherwise bright prospects for the future, in
cluding
(a)The
rising trend in wages and materials.
(b) Large capital expenditures for new equip
ment, buildings and facilities.
(c) Lower passenger load factors as all air
lines expand their schedules and services.
(d) The trend toward lower passenger and
cargo rates in spite of increasing costs.
(e) Heavy training costs arising from in
creased personnel and rapid turnover.
(f) The possibility of increased taxation and
regulation by the various states.
On April 17, 1946 your Company will cele
brate the 20th anniversary of its inauguration
of service. We feel that the pioneering spirit
which has enabled it to withstand the shocks
of the past twenty years will insure its con
tinued growth and progress.
PRESIDENT
Sectional view of Western Air Lines new DC-6. Carries 52 passengers by day, 26 in full size berths at night.
1926 1926 1926 1926 1926 1926 1926 1926 1926 1926 1926 1926 1926 1926 1926
1926 First flight between Salt Lake
City, Las Vegas and Los Angeles,
April 17, 1926. Western is sole sur
vivor of early air mail contractors.
First airline to carry passengers on
scheduled air mail flights, May 23,
1926.
1927 Cheyenne -
Denver -
Pueblo air
mail contract awarded. Service
started December 10, 1927.
1928 Established "Model Airway" be
tween Los Angeles and San Fran
cisco under grant from Guggenheim
Foundation, May 26, 1928. This
was the nation's first deluxe multi-
engine transport service, featuring
such innovations as free meals to pas
sengers in flight, limousine service
to and from airports, weather fore
casting system and flight logs to pas
sengers.
Acquired Pacific Marine Airways, op
erating amphibious run from Los
Angeles to Santa Catalina Island,
June, 1928.
1929 West Coast Air Transport, San
Francisco to Seattle, acquired as af
filiated company--January, 1929.
Night mail flights to Salt Lake City
--May, 1929,
Los Angeles to Kansas City via Albu
querque in operation--June, 1929.
Also Standard Air Lines began oper
ation, Los Angeles-El Paso; legal
formalities for acquisition completed
May, 1930.
1930 First airline to use four-motored
passenger transports; Fokkcr F-32's
make debut.
First two-way radios installed under
direction of Herbert Hoover, Jr.
Million dollar Alhambra Airport
dedicated, April 17, 1930. Forced by
Post Office Department to merge
some of its operations with Trans
continental Air Transport to form
Transcontinental and Western Air,
Inc., (TWA); service over central
coast-to-coast mail route inaugu
rated, October 1, 1930.
1931 General Motors Corp. acquires
WAE control--March 3, 1931.
Western takes over Mid-Continent
Air Express--October 1, 1931. (Pu
eblo to Amarillo; Pueblo to El Paso).
1932 Irving Krick joins Western; air
mass analysis system of weather fore
casting tested and proved; since has
been universally adopted.
1933 Despite depression and general
uncertainty of air transport business,
Western showed net profit of $ 186,-
250.48 for the year.
1934 Air Mail Cancellations--April.
Merger with TWA broken by new
Government ruling, leaving Western
with only its route between San
Diego-Los Angeles-Las Vegas, Salt
Lake City after new bids were
awarded.
1935 On March 11, 1935 second mail
flight daily granted by Post Office
for Los Angeles-Salt Lake City.
1936 Fifty thousand dollars spent to
survey direct air route, Los Angeles
to Denver via Las Vegas and Grand
Junction, Colorado.
Awarded safety plaque as first airline
to operate continuously for 10 years
without passenger fatality--April,
1936-
1937 Western Air purchased National
Parks Airways extending service from
Salt Lake City to Great Falls, Mon
tana, via Pocatello, Idaho Falls,
Butte and Helena.
1938 Applied to newly created gov
ernment body for airline regulations
(Civil Aeronautics Authority), for
an extension of Salt Lake-Great Falls
route to Lethbridge, Canada--No
vember 18, 1938.
1939 Year nets profit of $74,555.90,
largely due to intensive passenger
selling and promotion of all-expense
vacation tours.
1940 William A. Coulter, owner of
largest block of Western stock, be
comes President--March 11, 1940.
Lethbridge extension granted and
interchange of equipment inaugu-
ated with United Air Lines.
1941 Name changed from Western
Air Express to Western Air Lines.
1942 Western Air Lines in midst of
war assignment; 2,000 mile route
for Air Transport Command from
Great Falls to Fairbanks and Nome,
Alaska; established perfect safety
record in nearly 50,500 hours of fly
ing for A.T.C. ending August, 1945.
1943 Awarded route from Los An
geles through San Bernardino, Palm
Springs, and El Centro; service be
gan in 1945, bringing rich resort and
agricultural area into Western Air
network.
Inland Air Lines purchased, adding
1,200 route miles in Montana,
South Dakota, Wyoming and Ne
braska.
1944 Granted right to fly direct from
Los Angeles to Denver, establishing
shortest coast-to-coast route; service
to start in April, 1946.
Returned to San Francisco with
award of Los Angeles San Francisco
route by CAB; service inaugurated
May, 1944.
1945 Western Air Lines now is oper
ating 4,016 miles of air routes, an
increase of 460 per cent since 1936.
Western's blueprint for the future
encompasses a tremendous expansion
with requests before the Civil Aero
nautics Board for 24,385 additional
miles of routes in the United States,
Alaska, Hawaii, Mexico, Central and
South America.
1946 1946 1946 1946 1946 1946 1946 1946 1946 1946 1946 1946 1946 1946 1946
Plane preview
for 1946-1947
The tremendous technological developments of the war
years are reflected in the vastly improved performance
of the new transport planes now coming on the market.
Greater speed and range and lower operating costs have
hastened the obsolescence of prewar equipment to the
point where it is no longer economical to operate. Keep
ing pace with the industry, Western Air Lines has
signed contracts for a complete new fleet of transport
planes totaling $17,350,000. Carefully selected to meet
the varied operating conditions along Western's net
work of air routes, these planes will be delivered during
1946 and 1947, gradually replacing the faithful DC-3's
which have served so well.
DOUGLAS DC-4
As the C 54 Army Transport, this 42-
ton plane made history on the world's
hattlefronts, setting standards for sc
ice and dependability that have never
been surpassed. Western Air Lines has
purchased 13 of these giant craft, all of
which will be in service by September,
1946.
STATISTICS
Passengers 44-54
Length overall 93 ft. 11 in.
Wingspan 117 ft. 6 in.
Horsepower (4 engines) 5800 lip.
Fuel Capacity. 2877 ga^s-
Cruising Speed 239 m.p.h.
Absolute range 4680 miles
Cost $450,000
DOUGLAS DC-6
Postwar successor to the DC-4 *s ^1C
DC-6, now in volume production at
the Douglas Aircraft Company. Larger
and faster than the model it replaces,
the DC-6 incorporates all the latest sci
entific improvements and conveniences,
such as pressurized cabin, full-sized
sleeper berths, luxury interiors and many
others. Western has ordered 10 of these
long-range luxury planes which will be
delivered sometime in 1947.
STATISTICS
Passengers 52 day plane WEWP
26 sleeper plane
1 .ength overall . . .
100 ft. 7 in.
Wingspan . . .
117 ft. 6 in.
Horsepower (4 engines)
Fuel Capacity ...
.25-7 gals.
Top cruising speed. . . .
....315 m.p.h.
Absolute Range . . .
.4100 miles
Cost $650,000
CONSOLIDATED 240
This sensational design is the first high
speed twin-engine transport with pres
surized cabin to be offered for airline
use. Featuring utmost luxury, combined
with low operating cost, this model
offers the advantage of jet power re
covery from the engine exhaust, giving
added speed and greater reserve powc
Western has contracted for 20 Cc
idated 240's for delivery in 1947, plus
an option for an additional 30 if needed.
STATISTICS
Passengers 40
Length overall 73 ft. 4 in.
Wingspan 91ft. 9 in.
Horsepower (2 engines) 4800 lip.
Fuel Capacity 1000 gals.
Cruising Speed 302 m.p.h.
Absolute Range 800 miles
Cost $250,000
Revenue: 1942 1943 1944 1945
Increase
1945
over 1944
Percent of
Increase
1945
over 1944
Passenger $ 1,242,541 $ 1,709,402 $ 3,168,828 $ 5,653,830 $ 2,485,002 78.42%
Mail 760,573 260,906 836,556 1,239,397 402,841 48.15%
Express, Freight and Excess
Baggage 191,051 148,473 154,991 205,981 50,990 32.25%
Other 180,892 42,672 97,280 58,721 (38,559) (39.64%)
Total $ 2,375,057 $ 2,161,453 $ 4,257,655 $ 7,157,929 $ 2,900,274 68.12%
Revenue Miles Flown 2,318,305 2,057,028 4,057,495 7,279,009 3,221,514 79.40%
Revenue Passengers
Average No. Passengers per
77,801 80,907 147,854 303,931 156,077 105.56%
Revenue Mile
Average Revenue per Passenger
10.52 15.84 15.54 16.09 .55 3.54%
Mile .0509 .0525 .0502 .0483 (.0019) (3.78%)
Passenger Seat Miles Flown.... 39,348,869 38,498,693 73,101,222 138,852,497 65,751,275 89.95%
Revenue Passenger Miles 24,393,816 32,589,240 63,073,101 117,105,887 54,032,786 85.67%
Load Factor 61.99 84.65 86.28 84.34 (1.94) (2.25%)
Mail Pounds Carried
Express and Freight Pounds
1,547,984 1,914,391 4,534,732 6,694,856 2,160,124 47.64%
Carried
( ) Denotes Decrease
1,258,368 957,291 943,415 1,508,847 565,432 59.93%
1945 1945
Expense:
Depreciation
Other Operating &
General Expense
Operating Expenses per
Revenue Mile
Percent of Scheduled Service
Performed
No. of Employees (Average).
( ) Denotes Decrease
1942 1943 1944 1945 over 1944 over 1944
$ 215,707 $ 203,886 $ 321,322 $ 554,724 $ 233,402 72.64%
1,582,160 1,850,699 3,701,527 6,297,890 2,596,363 70.14%
1,797,867 $ 2,054,585 $ 4,022,849 $ 6,852,614 $ 2,829,762 70.34%
.7755
96.17
485
.9988
94.44
807
[18]
.9915
95.43
1,120
.9414
98.41
1,641
(6.52) (6.58%)
2.98
521
3.12%
46.51%
ACCOUNTANTS' REPORT
lb the Board of Directors,
WESTERN AIR LINES, INC.
We have examined the Consolidated Balance Sheet of Western Air Lines, Inc.,
and its subsidiary Inland Air Lines, Inc., as of December 31, 1945, and the
statements of Consolidated Profit and Loss and Surplus for the year then
ended, have reviewed the system of internal control and the accounting
procedures of the Companies and, without making a detailed audit of the
transactions, have examined or tested accounting records of the Companies and
other supporting evidence, by methods and to the extent we deemed appropriate.
Except that it was not practicable to confirm the accounts receivable from United
States Government departments and agencies, as to which we have satisfied
ourselves by means of other auditing procedures, 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 Consolidated Balance Sheet and related
statements of Consolidated Profit and Loss and Surplus present fairly the
consolidated position of Western Air Lines, Inc., and subsidiary at December 31,
1945, and the results of their operations for the year, in conformity with generally
accepted accounting principles applied on a basis consistent with that of the
preceding year.
PEAT, MARWICK, MITCHELL & CO.
Los Angeles, California,
March 19, 1946.
[ 19 ]
Printed in U.S.A.