OFFICERS AND DIRECTORS 
REGISTRAR 
STOCK TRANSFER AGENT 
AUDITORS 
GENERAL OFFICES 
Terrell C. Drinkwater, President and Director 
Stanley R. Shatto, Vice President-Engineering 
and Maintenance and Director 
Marvin W. Landes, Vice President-Service 
and Director 
Arthur F. Kelly, Vice President-Sales 
Paul E. Sullivan, Vice President and Secretary 
D. P. Renda, Assistant Secretary 
J. J. Taylor, Treasurer 
Robert H. Purcell, Controller and Assistant Treasurer 
I. W. Burnham II, Director 
ew York City 
Hugh W. Darling, Director 
Los Angeles 
Hector C. Haight, Director 
Los Angeles 
L. Welch Pogue, Director 
Washington, D. C. 
John M. Wallace, Director 
Salt Lake City 
Alexander Warden, Director 
Great Falls, fontana 
Sidney F. Woodbury, Director 
Portland, Oregon 
Citizens National Trust & Savings Bank, 
Los Angeles 
Chase National Bank, ew York 
Security-First National Bank of Los Angeles 
New York Trust Company, New York 
Peat, Marwick, Mitchell & Co. 
W stern Air Lines Building 
6060 A vion Driv 
Los Ang les Int rnational Airport 
Los Ang 1 s 45, California 
 to the stockholders of WESTERN AIR LINES, its customers and employees 
For the calendar year 1949, the operations of the 
Company and its subsidiary, Inland Air Lines, Inc., 
resulted in a net profit of $432,053, or 82 per share 
after taxes and all other charges. This compares 
with a net profit for 1948 of $134,704, equivalent 
to 26 per share of capital stock outstanding. 
In 1949, total operating revenues of the Com- 
pany0 amounted to $11,534,131, an increase of 10.2% 
over the total operating revenues of $10,463,232 
realized the previous year. Total revenue miles 
flown by the Company increased 9.1% during the 
period. This increased mileage was operated with 
an addition of only $202,321, or 1.9%, in total oper- 
ating expenses, which totaled $10,564,296 in 1949, 
as compared with $10,361,975 in 1948. Those ex- 
penses directly related to the cost of flying the 
aircraft accounted for all of the increase in total 
operating costs, with indirect expenses reflecting 
a decrease of $436,335, or 7.3%. 
During the past year many new problems arose 
in the operation of the Company, some of these 
requiring sharp revisions in the planning of the 
management. Substantial progress has been made 
in meeting these problems. The beneficial results 
of the reorganization of the Company during the 
past three years have become manifest and, in 
the absence of totally unforeseen contingencies, it 
is expected that additional gains will be made 
0 Whenever the term "the Company" appears herein, it refers 
to Western Air Lines, Inc. and its subsidiary, Inland Air 
Lines, Inc. 
during 1950. The entire western region served by 
the Company is growing in population, commerce 
and industry. 
The Company is presently serving 39 stations 
located in 13 states and Canada. Each day 372 
Western Air Lines take-offs and landings are sched- 
uled-or one every 4 minutes. A fleet of 26 aircraft 
is operated, including 10 Convairs, 10 Douglas 
DC-3' s and 6 Douglas DC-4' s. The Company has 
certificated routes of 4,613 miles, over which 29,955 
airplane miles are scheduled each day. This is equal 
to a daily trip around the world with two round 
trips between Los Angeles and Seattle added. 
Each day the Company schedules 1,078,280 airplane 
seat miles. 
During 1949, the Company completed 97.72% of 
all airplane miles scheduled. An average of 1,157 
passengers was carried each day. The average pas- 
senger traveled 369 miles and paid $20.44 for his 
ticket, exclusive of the 15% Federal transportation 
tax. 
Working in concert with the industry and the 
governmental agencies concerned, much progress 
has been made by the Company during 1949 in 
improving the safety and dependability of its fly- 
ing operations. Considerable work was done in 
studying and installing new techniques, procedures 
and equipment for instrument flying, airway traffic 
control, and airport approach systems. This pro- 
gram is being continued and it is confidently 
expected that the Company will be able to report 
more advancement at the close of 1950, during 
 which year it is anticipated that still further im- 
proved radio, instrument landing, airport lighting, 
fog dispersal and other aids to navigation will be 
studied, refined and utilized. 
In the Company's headquarters at the Los 
Angeles International Airport, additions have been 
made to the maintenance and shop equipment to 
the end that these facilities now take care of vir- 
tually all of the overhaul and maintenance work 
required for all aircraft. These facilities are among 
the most complete, efficient and outstanding units 
of their kind. 
Stockholders: As of November 7, 1949, there were 
issued and outstanding 525,164 shares of the capi- 
tal stock of the Company, all of one class and held 
by 2,691 shq.reholders of record. Many are nominees 
who hold stock for the accounts of others, the num- 
ber of whom is unknown to the Company. It is 
estimated, however, that Western Air Lines, Inc., 
is owned by over 4,000 individual stockholders: 
residing in each of the forty-eight states. Since 
the sale in the spring of 1949 of the large block 
of stock formerly held by Mr. W. A. Coulter, 
most of which stock has since been redistributed, 
the number of shareholders of the Company has 
increased materially, particularly in the western 
states served by the Company, thus providing a 
broadened market for the stock. 
Approximately 17% of the employes and all of 
the officers own stock in the Company. 
Employes: At the close of the year, the Com- 
pany's payroll listed 1,226 employes, 74.7% men 
and 25.3% women. These employes were divided 
between divisions of the Company as follows: 
Service Division, including station and reserva- 
tions personnel, radio operators and stewardesses, 
473; Maintenance and Engineering Division, 318; 
Flight Division, including pilots, dispatchers and 
instructors, 198; Treasury Division, including 
budget, accounting, purchasing and stores person- 
nel, 97; Sales Division, including city ticket office 
staffs, 92; General Administration Division, includ- 
ing corporate, legal, clerical and insurance depart- 
ments, 48. 
The average length of service with the Company 
for ~.11 employes was 5J~ years. The average length 
of service of pilot captains was 11 years. There 
has been a marked reduction in the turnover of 
employes during the year. This, coupled with 
revised training programs and departmental reor- 
ganization, has aided in increasing efficiency and 
reducing costs. 
Approximately 85% of the Company's employes 
are represented by six labor unions. The Com- 
pany has contracts with these unions under which 
harmonious relationships have been maintained 
throughout the year. 
The employes' Westernaire Federal Credit Union 
has had a successful year during which 863 loans 
totaling $130,230 were made to employes. A divi- 
dend of 6% was paid on savings accounts to employe 
members. No losses have been experienced in con- 
nection with loans made. Membership is open to 
all Company employes, of whom 54% are now 
members. 
The Employes' Suggestion System has been 
continued, with awards of tnany cash prizes for 
individual suggestions which have been accepted 
and put into effect to improve the efficiency of 
the organization. 
($000.00 omitted) 
For the Calendar Year 
1949 1948 1947 
Operating revenues: 
Passenger ............ $ 8,024. $ 7,813. $10,114. 
Mai1 ................ 2,504. 2,136. 1,570. 
Other ............... $ 1,006. 514. 692. 
Total operating 
revenues ......... $11,534. $10,463. $12,376. 
Operating expenses: 
Depreciation ......... $ 1,335. $ 1,164. $ 1,845. 
. Other ............... $9,229. 9,198. 11,196. 
Total operating 
expenses ......... $10,564. $10,362. $13,041. 
Operating profit ( or loss) .. 
Non-operating income and 
 970. 101. (665.) 
expense (net) ......... (249.) ( 180.) ( 192.) 
Federal income taxes or 
credits ............... (280.) 220. (88.) 
Minority inter tin profit 
ofsubsidiary .......... (9.) (6.) 
Net proftt ( or loss) . .. $ 432. $ 135. $ (945.) 
 Flnanclal Position-The comparative financial status of 
your Company as of the close of the last three calendar 
years is shown in the following condensed statement: 
As of December 31, 1949 ($000.00 omitted) 
ASSETS 
( What we own) 
1949 1948 1947 
Current Assets: 
Cash ............... . $ 1,401. $ 1,462. $ 2,187. 
Accounts receivable .... 1,021. 2,307. 1,168. 
Inventories ........... 210. 246. 229. 
Total current assets . . 2,632. 4,015. 3,534. 
Properties and equipment: 
Airplanes, engines, land, 
buildings, equipment, 
spare parts, etc .. .... . .. 12,598. 12,311. 9,823. 
Less reserve for 
depreciation .......... (5,427.) (4,217.) (3,531.) 
Sundry securities ........ 11. 12. 11. 
Deposits on equipment 
purchase contracts ..... 484. 
Insurance, rent, interest, 
etc., paid in advance . ... 637. 678. 269. 
Routes, contracts 
and leases ............ 127. 147. 166. 
Total Assets ........ $10,578. $12,946. $10,756. 
--- 
The Employes' club in Los Angeles maintains 
close working arrangements and sponsorships with 
such organizations as the Red Cross, Boy Scouts, 
and the National Polio Foundation. 
For a number of years the Company has pro- 
vided a voluntary employes' Group Insurance 
Program under which life, accident and sickness, 
and accidental death and dismemberment insur- 
ance is made available for employes, and hospitali- 
zation insurance with medical and surgical benefits 
is made available for employes and for members 
of their families. All employes are eligible to par- 
ticipate in this insurance, which cost is borne 
jointly by the employes and the Company. Benefits 
under all coverages have been broadened from 
time to time, and the program is now one of the 
finest available. Approximately 75% of the employes 
LIABILITIES 
( What we owe) 
1949 1948 1947 
Current Liabilities: 
Notes payable ........ $ 773. $ 2,394. $ 
Accounts payable ..... . 522. 1,087. 532. 
Air Travel Plan deposits . 206. 229. 244. 
Accrued salaries, wages, 
taxes, insurance, etc ..... 887. 620. 1,348. 
--- 
Total current liabilities 2,388. 4,330. 2,124. 
Unused portion of 
tickets sold ........... 174. 321. 239. 
Notes payable-long term 3,113. 3,551. 3,800. 
Operating reserves ...... 272. 260. 
Minority stockholders' 
inter~t in subsidiary . ... 23. 24. 20. 
Capital stock 
(525,164 shares) ... . ... 525. 525. 525. 
Capital surplus . ......... 2,768. 2,768. 2,768. 
Earned surplus ........ . . 1,587. 1,155. 1,020. 
Total Liabilities ..... $10,578. $12,946. $10,756. 
--- - - - 
Stockholders' equity 
per share ............. $9.29' $8.47 $8.21 
carry the group life insurance, while about 90% 
have availed themselves of the accident and sick- 
ness and hospitalization coverages. 
The management and directors wish to thank each 
individual employe for his or her contribution to 
the progress made by the Company during 1949. 
Debt: The Company's loan from the Reconstruc- 
tion Finance Corporation, which represents total 
borrowings in 1947. and 1948 of $6,421,606, had 
been reduced at the year end to $3,886,098. As 
of March 15, 1950, this balance has been further 
reduced to $3,544,036, which represents a repay- 
ment of 45% of the original loans. 
During 1949 a'trangements were made with the 
Reconstruction Finance Corporation for the re- 
scheduling of-the principal payments of the unpaid 
balance of these loans. Under the revised terms, 
 the Company will be required to pay the unpaid 
balance over a three-year period ending December 
31, 1952. The annual principal payments required 
will approximate $840,000 per year, with any un- 
paid balance due on December 31st, 1952. The 
interest rate of the loans is 4% per annum, but the 
Company is permitted to make prepayments on 
the loans whenever working capital will permit 
in order to reduce the interest charges. As of March 
15, 1950, the principal payments were prepaid to 
July 1, 1950. 
In addition to the regular principal payments, 
amounts which the Company receives from rentals 
and sales of surplus property from time to time 
are also applied in reduction of the loans. The 
loans are secured by a first lien on practically all 
of the Company's property. The annual principal 
payments required are less than the Company's 
current annual depreciation charges. 
Air Coach Service: It has become quite appar- 
ent to the Company's management during the 
past year that there exists a definite market for 
two types of air transportation between large cen- 
ters of population sufficiently far apart to enable 
the airplane to produce a real saving in time over 
surface carriers. On the system of Western Air 
Lines, it is believed that these factors presently 
exist on the coastal route between Seattle-Tacoma 
and Portland and San Francisco-Oakland and Los 
Angeles-Burbank and, to a limited degree, between 
Los Angeles-Burbank and Las Vegas, Nevada. 
In addition to its first-class services operated on 
the Coastal Division with Convair aircraft, the 
Company, on October 15, 1949, inaugurated night- 
time air coach service between Los Angeles-Burbank 
and Seattle-Tacoma via San Francisco-Oakland and 
Portland, using DC-4 aircraft with added seating 
capacity. The fare for this service is approximately 
one-third less than the regular first-class fare charged 
on the Convair coastal flights. No meals or other 
refinements of passenger service are furnished on the 
coach flights. Due to r strictions imposed by the 
Civil Aeronautics Board, up to the present time 
regular air coach sch dules must be flown only 
at night, with departures being restricted to times 
subsequent to 10:00 PM from both t rminal points. 
Because of the unusual nature of the traffic flow 
between Los Angeles -Burbank and Las Vegas, 
Nevada, the Company, with the same type DC-4 
aircraft, inaugurated, on January 12, 1950, a round- 
trip excursion coach type service between these 
points. 
As set forth in the annual report for 1948, por- 
tions of the Company's system have been subjected 
to improper competition by so-called irregular or 
non-scheduled air carriers. No action was taken 
by either the Federal or State Government to 
regulate such competition, which began to have 
a particularly serious effect on Western Air Lines 
behveen San Francisco-Oakland and Los Angeles- 
Burbank The Company made application to the 
Civil Aeronautics Board for permission to operate 
coach service between these cities at any time day 
or night at the four-cent-a-mile coach rate which 
has been the minimum fare permitted by that 
regulatory body. The application was not approved 
by the CAB. 
During the first half of 1949 there were six 
intrastate coach-type operators carrying passengers 
between these points, practically without economic 
regulation by either the State or Federal Govern- 
ments. The one-way fare most of such carriers 
were charging was $9.95, which amounts to 3.04 
per mile. In the fall of 1949, the Company _ 
entered 
into an arrangement with an independent Califor- 
nia corporation, Western Air Lines of California, 
Inc., whereby the Company charters high seat- 
density DC-4s to Western Air Lines of California, 
Inc. The latter has been furnishing coach service 
at $9,95 between San Francisco-Oakland and Los 
Angeles (Burbank) under intrastate tariffs led 
with the California Public Utilities Commission. 
Between September 1 and December 31, 1949, 
Western Air Lines of California, Inc. carried more 
than 50,000 passengers in this intrastate coach serv- 
ice. The charter revenues received by the Company 
from this arrangement continue to represent an 
important source of income. 
Although General Counsel for the Company has 
advised that th arrang m nt is 1 gal und r the 
provisions of th Civil Aeronautics Act of 1938 
and th regulations of th Civil A ronautics Board 
 thereunder, the CAB has instituted an investiga- 
tion of the arrangement, coupled with an investi- 
gation of all intrastate operations within the State 
of California. The duration or the outcome of such 
investigation cannot be forecast. However, the man- 
agement of the Company is firmly convinced that 
the low fare service has been demonstrated to be 
in the public interest and profitable to the Com- 
pany, and should be offered between these Cali- 
fornia metropolitan centers, notwithstanding the 
CAB aircoach policy more applicable in other sec- 
tions of the country. Figures recently released by 
the California Public Utilities Commission show 
that of the total number of passengers carried by 
rail, bus and air between the San Francisco-Oakland 
and Los Angeles metropolitan areas in 1949, 43.1% 
went by air, 32.7% by rail, and 24.2% by bus. It is 
doubtful if this ratie exists between any other pair 
of cities in the United States. 
Governmental Regulation: By far the greatest 
imponderable in the scheduled air transport busi- 
ness today is the regulatory relationship of the 
Federal Government to the industry. Being faced 
with constant and minute regulation by the Civil 
($000.00 omitted) 
1949 
We Received: 
Passenger revenue ............... $ 8,024. 
Mail revenue . . . . . . . . . . . . . . . . . . . 3,555. 0 
Express, freight, charter, etc. . . . . . . 1,006. 
RFC loan ..................... . 
Sale of other assets . . . . . . . . . . . . . . . 494. 
$13,079. 
We Spent: 
Salaries and wages .............. $ 4,856. 
Gasoline and oil . . . . . . . . . . . . . . . . . 1,279. 
Insurance . . . . . . . . . . . . . . . . . . . . . . 542. 
Taxes.......................... 385. 
Passenger food and supplies . . . . . . 116. 
Materials and outside services . . . . . 1,670. 
Other expenses . . . . . . . . . . . . . . . . . . 394. 
Interest . . . . . . . . . . . . . . . . . . . . . . . . 197. 
Payment of loans. . . . . . . . . . . . . . . . . 2,059. 
Purchase of equipment, spare parts, 
etc ....................... . 
Reduction of other debts and misc. 
( ) $1,051 arned in 1948. 
910. 
671. 
$13,079. 
1948 
$ 7,813. 
1,085. 
514. 
2,266. 
176. 
$11,854. 
$ 4,974. 
1,118. 
312. 
368. 
301. 
1,694. 
404. 
184. 
121. 
2,270. 
108. 
$11,854. 
Aeronautics Board, the Post Office Department and 
the Civil Aeronautics Administration as well as 
other Federal agencies, scheduled air transporta- 
tion is probably the most completely regulated 
industry in the nation. 
A large part of such regulation stems from the 
provisions of the Civil Aeronautics Act of 1938 as 
administered by the executive branch of the gov- 
ernment. During the twelve years since its passage, 
this has proven to be a good basic law. There now 
are attempts being made in Congress to change it 
by those who are motivated by a desire to stifle the 
steady growth of domestic air transportation. The 
Company's management, in common with most of 
the other scheduled air carriers, has taken the posi- 
tion that this law should not now be changed in 
any major respect. But the administration of this 
law should be considerably simplified, clarified, 
and expedited. 
In addition to the investigation of the California 
intrastate air coach service, the Company, like all 
other members of the air transport industry, has 
many proceedings pending before the Civil Aero- 
nautics Board. 
Although the matter has been pending for sev- 
eral years, no final decision has yet been rendered 
on the Company's request for a determination of 
mail compensation for the period prior to January 
1, 1949. Because of disagreements between the 
Civil Aeronautics Board and the Post Office Depart- 
ment, additional lengthy hearings on the case have 
just been concluded and it is hoped that a final 
determination will be made by the CAB during 
1950. The rate of mail compensation for the period 
subsequent to January 1, 1949, has been determined 
and is not in issue. 
No formal action has been taken by the Civil 
Aeronautics Board in connection with any of the 
several investigations announced by it in a state- 
ment of policy issued February 25, 1949. One of 
these had specific reference to Western Air Lines, 
as set forth in the Company's Annual Report for 
1948. The management of the Company is of the 
opinion that if there ever were any valid reasons 
for this investigation, they uo longer exist. 
On Dec mber 19, 1949, the CAB issu d "show 
 cause orders" directing the Company to demon- 
strate why it should not stop service presently 
rendered to San Bernardino (Ontario), Palm Springs 
and El Centro, California, and Yuma, Arizona, in 
order that service could be provided to these points 
on Western's system by a so-called "feederline" 
operator which is now doing everything possible 
to become a permanently certified trunk line car- 
rier competitive with the Company's coastal route. 
No date has yet been set for the hearings on this 
matter, but at the time of those hearings the Com- 
pany feels it can defend its position with respect 
to service to these four cities, and prove that the 
substitution of a feederline for Western Air Lines 
would be a costly duplication of service and a 
waste of taxpayers' money. 
The Company has refiled its CAB application 
to extend its Imperial Valley flights from Yuma 
to Phoenix in order to make a sensible route out 
of this portion of its system, it being impractical 
to carry out its previously announced plan to solve 
the problem. 
During 1949, the U. S. Senate Committee on 
Interstate and Foreign Commerce started an inquiry 
into the financial condition of the air transport 
industry. This investigation ~s still going on. 
One of the main projects being considered by 
this Committee is the necessity or desirability of 
separating moneys received by air carriers for 
transporting United States mail into payments solely 
for the carriage of that mail and payments in the 
nature of subsidy to permit continued operation of 
essential but uneconomical segments of the air 
transport system, much the same as subsidy pay- 
ments are made to provide free delivery mail 
service to rural districts of the United States. 
The rate of mail compensation received by the 
Company falls neither in the highest nor lowest 
categories paid to the various classes of airlines. 
United States air carriers operating international 
and overseas routes, as well as temporary feeder- 
line operators and some of the smaller domestic 
trunk line air carriers, receive mail compensation 
at a considerably higher rate than that received 
by the Company. On the other hand, several of 
the domestic air carriers larger than Western Air 
Lines receive mail compensation at a rate lower 
than that paid to the Company. 
The management of the Company has taken no 
position in opposition to the separation of mail 
compensation into two components, provided such 
separation is done on a fair and non-political basis 
by persons competent to make such separation, after 
thorough and impartial study and analysis has 
been completed. 
Many attacks during the past year have been 
leveled at scheduled interstate air transportation, 
inspired in most instances by surface carriers and 
other interests whose purpose is to retard the devel- 
opment of air transport. Much has been spoken and 
written about what has been loosely referred to as 
"airline subsidy." However, many informed persons 
have suggested that the airlines as such are not 
subsidized but rather, if there is any element of 
subsidy involved, it is the users of the airline 
services who are subsidized. 
The Postmaster General of the United States has 
recently expressed an opinion that the subsidy 
required for airmail costs the Post Office Depart- 
ment about $50,000,000 a year, while Government 
franked mail costs a little over $75,000,000. The 
Postmaster General has further stated that second- 
class mail requires a subsidy of about $200,000,000 
annually, third-class $130,000,000 annually, and 
postal cards $55,000,000. In other words, the air- 
mail subsidy is the smallest subsidy the Post Office 
Department pays. 
In any event, and regardless of the outcome of 
the current debate, it is clear that the combined 
route systems of Western Air Lines and its sub- 
sidiary are sound and essential and must continue to 
be operated in the public interest to provide needed 
service for the fast growing commercial interests 
in the areas served, to meet the postal needs and 
the increasing needs of the national defense. 
During 1949 the Company has been privileged 
to work closely with the Military Air Transport 
Service of the United States Department of the 
Air Force, in sponsoring and providing headquar- 
ters for the organization and development of a 
 military reserve air transport organization in South- 
ern California. Several of the Company's key per- 
sonnel have provided the original stimulus for this 
reserve unit, which is the first and only one of its 
kind in the nation. The unit includes former mem- 
bers of the Naval Air Transport Service, the Air 
Transport Command, the Army Ground Forces, 
Marine Corps flying personnel, and civilians 
engaged in the aviation industry in Southern Cali- 
fornia. The Company will continue to cooperate 
with the Military Air Transport Service in this 
project in order to meet its obligation under the 
national defense aspect of the Civil Aeronautics Act. 
During 1949, the Company inaugurated opera- 
tions to the Ontario International Airport, which is 
in the center of a heavily populated area adjacent 
to Los Angeles County. It is expected that new 
sources of business will be developed from this point. 
The Company expects to receive permission from 
the Canadian Government to extend its service 
north from Lethbridge to Edmonton in the Province 
of Alberta in the late spring or early summer of 
1950. This extension will enable the Company to 
tap additional long-haul traffic to and from this 
fast-growing Province of Canada which may well 
become one of the greatest oil-producing areas in 
the world. 
The governments of the United States and Mexico 
have as yet been unable to come to an under- 
standing with respect to the terms of a bilateral 
agreement for the further exchange of air routes 
between the two countries. As a result of this con- 
tinuing disagreement the Company has no present 
plans for service over its route authorized by our 
Government between Los Angeles and Mexico City 
via La Paz, Baja California. 
In furtherance of the policy of strengthening 
the Company in the western region it serves, the 
Board of Directors has been enlarged. The mem- 
bers of the present Board are listed at the beginning 
of this report. 
On November 1, 1949, Mr. Arthur F. Kelly was. 
elected Vice President-Sales to direct the Com- 
pany's advertising, sales, traffic and promotional 
programs. 
Respectfully submitted, 
PRESIDENT 
March 15, 1950 
Western Air Lines Building 
6060 A vion Drive 
Los Angeles International Airport 
Los Angeles 45, California 
On the next two pages is a reproduction 
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signed for easy reading and immediate 
understanding, this timetable has drawn 
nationwide attention as a passenger serv- 
ice. It represents another important step 
forward in WestemAir Lines' long history 
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245 
 Indicates CON VAi R De Luxe pressurized aircraft. 
 Indicates Douglas DC-4 COACH MASTER aircraft. 
T Indicates Douglas DC-3 aircraft. 
I 
I 
I 
I 
I 
I 
MINN. 
FLIGHT NUMBERS: -301- 
FOOD SERVICE: 
NOTES: 
B-Breakfast L-Lunch D-Dinner S-Snacks, complimentary meals served aloft. 
 -Complimentary meals served at airport cafe for through passengers only. 
CD-Twenty miles from San Bernardino. 
-One fuel stop may occasionally be made enroute. 
-Operates daily except Saturday. 
@-Operates Friday and Sunday only. 
All times are local Standard Time. A.M.- Light Fh:urrs. P.M .~Dark figures. 
OLDEST AIRLINE 
MA IL EXPRESS F R E, I G H T 
 Consolidated Balance Sheet as of De~ember 31, 1949 
ASSETS 
Current Assets: 
Cash in banks and on hand 
Deposit with Reconstruction Finance Corporation 
for payment of certain state and local taxes ..... . 
Accounts receivable: 
United States Post Office Department .......... . 
Other United States and State Government Depts. 
Interline and agents' traffic balances ......... . 
Customers' accounts receivable ................ . 
Other ( including $15,464.30 due from officers and 
employes) .............................. . 
Less allowance for doubtful accounts ........... . 
Inventory of parts and supplies at the 
lower of cost or replacement market 
( substantially all pledged) ( Note 1) ........... . 
Sundry securities .................................... . 
Properties and equipment, at cost ( substantially all 
pledged) ( Note 1): 
Land ........................................... . 
Buildings on and improvements to leased property .. . 
Airplanes, engines, propellers and flying equipment .. . 
Radio stations, furniture, fixtures, 
shop and other equipment ................... . 
Property not used in operat10ns .................... . 
Construction work in process ..................... . 
Less allowance for depreciation ................... . 
Routes, contracts and leases, less amortizatior.t $55,212.00 .. 
Deferred charges: 
Prepaid insurance . . . . .......................... . 
Unamortized pre-operational expense 
of new type aircraft ......................... . 
Other .......................................... . 
$ 262,204.62 
127,575.26 
273,885.70 
144,366.49 
114,861.99 
922,894.06 
8,660.73 
1,348.35 
2,969,172.26 
8,159,672.60 
1,101,377.42 
339,633.00 
27,210.91 
12,598,414.54 
5,427,024.20 
397,978.17 
93,368.02 
145,941.84 
$ 1,401,260.11 
106,281.17 
914,233.33 
209,636.14 
2,631,410.75 
11,186.71 
7,171,390.34 
127,241.60 
637,288.03 
$10,578,517.43 
LIABILITIES 
Current Liabilities: 
Notes payable-Reconstruction Finance Corporation 
( amount due within 12 months) ( Note 1) ..... . 
Accounts payable-trade . . ....... . ................ . 
Accounts payable-taxes collected from others ....... . 
Interline and agents' traffic balances ............... . 
Air Travel Plan deposits ................ . ........ . 
Accrued salaries, ~ages, taxes, insurance and other ... . 
Provision for Federal taxes on income 
( subject to review by United States 
Treasury Department) (Note 2) ............... . 
Deferred income ( unused portion of tickets sold) ....... . 
Long term debt: 
Notes payable-Reconstruction 
Finance Corporation (Nate 1 ) ................ . 
Less amount due within 12 months ................ . 
Minority stockholders' interest in subsidiary ............. . 
Capital stock-$1.00 par value per share (Note 1) 
Authorized 2,000,000 shares (25,000 shares 
reserved for option to officer) 
Issued 525,164 shares ............................ . 
Surplus: 
Capital surplus ( no change during year) ........... . 
Earned surplus from December 31, 1934 ........... . 
Contingent liabilities ( Note 3) ........................ . 
Long term lease commitments (Nate 4) ................. . 
$ 3,886,097.80 
772,916.63 
2,768,247.10 
1,587,022.90 
$ 772,916.63 
358,436.04 
135,506.22 
28,146.47 
206,125.00 
325,580.51 
561,424.22 
2,388,135.09 
173,680.80 
3,113,181.17 
23,086.37 
525,164.00 
4,355,270.00 
$10,578,517.43 
 Consolidated Profit and Loss Statement for the Year Ended December 31, 1949 
Operating Revenue: 
Passenger .............................................. . 
Mail (Note 2) .......................................... . 
Non-Scheduled transport services ........................ . 
Express and freight ..................................... . 
Excess baggage and other ............................... . 
Incidental revenue-net .................................. . 
Tot:il Operating Revenue ............................ . 
Operating Expenses: 
Flying operations ....................................... . 
Ground operations ...................................... . 
Direct maintenance-flight equipment ..................... . 
Ground and indirect maintenance ......................... . 
Passenger service ....................................... . 
Traffic and sales ........................................ . 
Advertising and publicity ................................. . 
General and administrative .............................. . 
Depreciation ........................................... . 
Operating Profit ..................................... . 
Non-operating Income: 
Discounts received ...................................... . 
Other ................................................. . 
Non-operating Charges: 
Interest ................................................ . 
Amortization of routes, contracts and leases ................ . 
Amortization of pre-operational expense ................... . 
Other ................................................. . 
Profit before Federal Taxes on Income ................ . 
Provision for Federal Taxes on Income ........................ . 
Less Minority interest in subsidiary ............................ . 
Net Profit .......................................... . 
Amount at December 31, 1948 ............................... . 
Add-Net profit for the year .................................. . 
Amount at December 31, 1949 ................................ . 
$ 3,080,370.59 
1,746,574.41 
821,782.38 
721,815.10 
561,538.03 
1,062,326.00 
299,805.87 
934,911.64 
1,335,171.98 
6,866.05 
9,182.10 
196,798.26 
18,408.00 
25,464.00 
24,379.60 
$ 8,024,175.98 
2,504,172.33 
604,026.12 
252,182.17 
63,231.73 
11,447,788.33 
86,342.25 
11,534,130.58 
10,564,296.00 
969,834.58 
16,048.15 
985,882.73 
265,049.86 
720,832.87 
280,000.00 
440,832.87 
8,780.21 
$ 432,052.66 
--- 
$ 1,154,970.24 
432,052.66 
$ 1,587,022.90 
 Notes to Financial Statements 
1. NOTES PAYABLE-RECONSTRUCTION FINANCE CORPORATION. 
The amount due to Reconstruction Finance Corporation, 
$3,886,097.80 ($2,446,850.33 on 1947 loan and 
$1,439,247.47 on 1948 loan), is secured by inventories, 
property and equipment, and the capital stock of Inland 
Air Lines, Inc., a 97% owned subsidiary. Under the terms of 
the credit agreements, as amended, the indebtedness as of 
December 31, 1949, is payable in specific amounts with 
interest at 4% per annum as follows: 
1947 Loan - Period March 1, 1950, to June 1, 1952, 
$28,000.00 monthly May through October, and $8,000.00 
monthly November through April; Period July 1, 1952, 
to December 1, 1952, $100,000.00 monthly July through 
October, and $55,000.00 monthly during November and 
December. The unpaid balance, if any, is due on or 
before December 31, 1952. 
1948 Loan- $52,083.33 monthly commencing February 
1950. The unpaid balance, if any, is due on or before 
December 31, 1952. 
Additional principal payments are to be made annually 
within the first two months after the close of each calendar 
year in amounts equal'to the excess of 50% of the Company's 
annual net profit for the preceding year ( before provision 
for depreciation) over the total of the specified monthly 
payments on principal made during the preceding year. No 
additional payment is due under this provision during the 
year 1950. 
The credit agreements provide, among other things, that 
no dividends on the capital stock of the Company are to be 
paid without the approval of the Reconstruction Finance 
Corporation. 
2. MAIL REVENUE AND FEDERAL INCOME TAXES. On March 3, 
1949, the Civil Aeronautics Board awarded the Company 
"Temporary Rates of Mail Compensation" which as to the 
period subsequent to January 1, 1949, were made permanent 
by an order issued on May 6, 1949. For the period prior to 
January 1, 1949, the temporary rates so established resulted 
in additional retroactive mail revenue in amount of 
$975,461.20, which was recorded as income for the year 
1948 and set forth as being includable in the 1949 
income tax return of the Company. Accordingly provision 
was made as of December 31, 1948, in the amount of 
$272,000.00 for the Federal income tax deemed to be pay- 
able for the year ended December 31, 1949, on the increased 
mail revenue of $975,461.20. The amount ($272,000.00) 
so provided together with the provision for Federal income 
taxes based upon the net profit for the year ended December 
31, 1949, is reflected on the balance sheet as a current 
liability. 
A protest against the additional retroactive mail revenue 
awarded the Company has been filed by the United States 
Post Office Department and appropriate proceedings are 
b fore the Civil Aeronautics Board for final determination. 
In the opinion of the management such final determination 
will not materially r due the amount of the award made 
although the y ar or y ars in which the additional r v nue 
is taxabl may be altered. 
3. CONTINGENT LIABILITIES. As of D c mber 31, 1949, the 
Company and its subsidiary w re conting ntly liable for 
damage claims and lawsuits in which they are or may be 
defendants. The amounts claimed by the plaintiffs in such 
damage claims and lawsuits are substantial but the manage- 
ment and its counsel believe the ultimate liability, if any, 
that may result therefrom will not be material in amount. 
4. LONG TERM LEASE COMMITMENTS. The minimum annual 
rental liability on real property leased to the Company and 
its subsidiary for terms expiring more than three years from 
December 31, 1949, is approximately $ll7,000.00; the 
numb ~ of leases is 25. A summary by periods of expiration 
is as follows : 
1953-1957 
1958-1967 
1968-1973 
Leases 
22 
1 
2 
Amount 
$81,000.00 
1,000:00 
29,000.00 
5. CHANGES IN ACCOUNTING PRINCIPLES. For the year 1948 
the Company and its subsidiary discontinued the practice 
of making monthly reserve provisions for aircraft and 
engine overhaul costs in order to conform its accounting 
practices with a majority of the Air Transport Industry and 
to reflect agreements reached after extensive conferences 
with the Rates and Analyses Division of the Civil Aero- 
nautics Board. In 1949, as a furtherance of this fundamental 
change, aircraft overhaul costs are being amortized over a 
SO-month period. Likewise that part of the cost of new 
aircraft which is deemed to be "built-in overhaul" is being 
amortized over a 30-month period rather than over the 
eximcted life of the aircraft. As a result of the change in 
1949, the net profit for the year 1949 is approximately 
$45,000.00 less than it would have been if such changes had 
not been made. 
To the Board of Directors, 
WESTERN AIR LI ES, I C.: 
We have examined the Consolidated Balance Sheet of Western 
Air Lines, Inc., and Subsidiary as of December 31, 1949, and 
the related statements of Consolidated Profit and Loss and 
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 neces- 
sary in the circumstances; it was not practicable to confirm 
receivables from United States and State Government depart- 
ments but we satisfied ourselves by other means as to these 
items. 
In our opinion, the accompanying Consolidated Balance Sheet 
and statements of Consolidated Profit and Loss and Surplus 
present fairly the financial position of Western Air Lines, 
Inc., and Subsidiary, at Dec mber 31, 1949, and the results 
of their operations for the year then ended, in conformity with 
gen rally accepted accounting principles applied on a basis 
consistent with that. of the preceding year, except for the 
changes, which w approve, set forth in ote 5. 
PEAT, MARWICK, MITCHELL & CO, 
Los Angeles, California 
March 10, 1950 
 A museum pi e today, this M-2 biplane was 
the last word n  aviation back in 1926 when it 
made the nat n's first scheduled commercial 
airline flights for Western Air between Los 
Angeles and S It Lake City. 
this is p ogress 
Western Air Lines' 300-mph Convair-Liner represents commercial 
aviation's latest and finest in speed, comfort and safety. The 
sleek plane carries 40 passengers and crew of three in an air- 
conditioned, pressurized cabin which gives ground-level comfort 
while cruising at above-the-weather altitudes. 
 passengers 
mail 
maintenance 
facilities 
In 1926 Western Air Lines, America's oldest 
airline, carried the nation's first commercial 
airline feminine passenger between Salt Lake 
City and Los Angeles-in 6 hours, 30 minutes. 
Maude Campbell paid $90 for her ticket and 
rode in the windblown front open cockpit. 
Totaling less than 200 pounds, this airmail load 
was a capacity haul for Western Air's M-2 
biplane in 1926 when the company flew the 
nation's first commercial airmail between Los 
Angeles and Salt Lake City. 
In 1926 when Western Air mechanics did repair 
work on the 425-hp Liberty engine of the M 
-2 
biplane they placed stepladders alongside the 
ship, climbed up, lifted the engine hood fnd 
began tinkering. 
In 1949 nearly one-half million passengers flew 
Western Air Lines. Many thousands, new to 
air travel, used and liked Western's reduced 
fare DC-4 Coachmasters between major cities 
on the Pacific Coast. 
Just in from Seattle-Tacoma on a Western Air 
Lines Convair-Liner, this ton of airmail being 
processed at the Los Angeles International 
Airport field postoffice represents a typical mail 
load carried in WAL aircraft. 
A typical scene in Western Air Lines' modern 
engine overhaul shop at Los Angeles Inter- 
national Airport, with mechanics in left back- 
ground working on a 2400-hp Pratt & Whitney 
Convair-Liner engine, while mechanic in fore- 
ground gives finishing tune-up touches to 
~~~~-------~ ____ 
1200-hp Pratt & Whitney DC-3 en~ 
gi_ 
ne 
_ 
. ___ __, 
Taken 24 years a10, this picture shows one of 
Western Air's ori1inal fleet of six M-2 biplanes 
soarin1 over the company's ori&inal han1ar at 
old Vall Field near Montebello, California. 
The old 1926 Western Air hangar could be 
tucked away in one corner of the company's 
modern headquarters buildin1 at Los Angeles 
International Airport, which houses WAL's 
administrative offices and complete mainte- 
nance, overhaul and enalneering facilities.