Western 
Air Lines Inc. 
1969 
Annual 
Report 
  Highlights of 1969 
Operating 1969* 
Seat miles produced ................ . .. . 8,509,441,000 
Seat miles sold ....................... . 4,021,296,000 
Passengers carried ........... . ........ . 5,752,072 
Passenger load factor - actual % ........ . 47.3 
-breakeven point% .. 53.1 
Financial 
Operating revenues ................... . $240,351,788 
Operating income (loss) ....... .. .. . .. .. . $ (12,400,902) 
Net earnings (loss) .................... . $ (12,198,860) 
Cash dividends paid ......... . ......... . $ 2,451,634 
Common stock outstanding .... . ......... . 4,903,879 
Earnings (loss) per share . ... . . .. .. . .. .. . $ (2.49) 
Cash dividends per share ............... . $ 0.50t 
Shareholders' equity ................... . $ 79,309,461 
Shareholders' equity per share ........... . $ 16.17 
Cash and short-term securities ........... . $ 28,454,327 
Working capital ....................... . $ 20,447,092 
Property and equipment at cost ....... . . . . $429,107,512 
Long-term debt ....................... . $197,149,588 
Number of employees at year end ........ . 9,225 
Wages and salaries paid ................ . $ 87,495,153 
operations were suspended from July 29 to August 16, 1969 because of a strike. 
t$0.25 per share paid on March 3 and on May 26, 1969. 
1968 
7,096,229,000 
3,841,864,000 
5,692,947 
54.1 
50.7 
$221,952,867 
$ 19,681,421 
$ 8,435,770 
$ 4,893,544 
4,901,734 
$ 1.72 
$ 1.00 
$ 93,862,286 
$ 19.15 
$ 27,870,420 
$ 25,763,975 
$404,674,981 
$183,718,216 
8,919 
$ 71,884,941 
 To Our Stockholders 
As detailed in the following pages of this report, 1969 
was a difficult year for Western as the company experi- 
enced a loss of $12.2 million, ending a record of 20 
consecutive years of profit. 
Any regulated industry has problems during an infla- 
tionary period when it is unable to increase prices as 
rapidly as costs are increasing. Air transportation is no 
exception. During 1969, however, Western was faced 
with additional problems that contributed to the com- 
pany's losses, some of which are behind us, others which 
remain as a challenge in 1970. These were: 
Costs associated with repeated postponements in the 
effective date of Hawaii routes; 
loss of revenue because of an 18-day strike during the 
peak travel season; 
industrywide increases in wages, salaries, interest 
costs, jet fuel, materials, landing tees and rentals; 
a general slowdown in the growth of air travel that 
resulted in a traffic increase of only five percent at a time 
when the company's fleet modernization and expansion 
program was producing a 20 percent increase in seat- 
mile production; 
new and increased competition on the company's key 
domestic routes. 
Western started service to Hawaii under the most 
adverse circumstances. After being awarded a number 
of Hawaii routes on January 4 for an effective date of 
March 5, the company began preparations for the inaugu- 
ration of service. The effective date was then postponed 
five times by the Civil Aeronautics Board before being 
made final on July 22. On July 25, Western inaugurated 
its service, which was further interrupted four days later 
by an unexpected strike by the company's mechanics. 
The Hawaiian market is one in which reservations by 
individuals and tour groups are normally made months 
in advance. The uncertainty of when Western would be 
permitted to inaugurate its service and the ensuing work 
stoppage made it impossible to build up advance reser- 
vations prior to the establishment of service. 
The growth of traffic on new routes normally requires 
a period of development, particularly where competition 
is well entrenched or where, as in the case of Hawaii, ex- 
cessive competition is authorized. A total of eight certifi- 
cated U.S. flag airlines are now authorized to fly to Hawaii 
from the Mainland, compared to only three prior to West- 
em's entry into the market. In addition, nine supplemental 
 airlines operated charter flights to Hawaii in 1969. 
Because of the excessively low fare structure between 
the Mainland and Hawaii, the breakeven load factor for 
these routes is higher than is normal for routes of this 
length. Already one of the lowest per-mile fares in the 
U.S., the basic fare was reduced an additional 15 percent 
in 1969 for economy and coach travel during the middle 
of the week and was not included in the October domes- 
tic fare increases. In addition, the yield for Mainland 
carriers is further reduced by a common fare arrange- 
ment, required by the Civil Aeronautics Board, wherein 
the Mainland carrier underwrites the major portion of the 
fare reductions that are available for connecting flights 
on inter-island carriers between the islands of Hawaii. 
Included in Western's operating authority for Hawaii 
was a condition which requires that all Hawaii-Los 
Angeles flights originate or terminate at a point east of 
California. Although this does not prevent us from carry- 
ing local traffic in the Los Angeles-Hawaii market, it does 
force us to extend more Hawaii flights to inland points 
than the market justifies and prevents us from originating 
or terminating Hawaii flights at Los Angeles, the location 
of our main maintenance base. This requirement results 
in reduced utilization for overwater-equipped aircraft and 
limits scheduling flexibility for Hawaii service. 
As a result of other Civil Aeronautics Board decisions, 
Western now has competition on every major route it 
serves. On the California-Twin Cities nonstop routes, for 
example, the addition of competitive trunkline service in 
October 1969 has doubled the number of daily flights on 
the routes and , while Western has been able to maintain 
a good share of the market, the additional service and 
slowdown in the economy have resulted in low load 
factors and unprofitable operations. 
Western is continuing to make improvements in the 
quality of its service. On our Hawaii flights, for example, 
we have added movies and stereo sound, increased leg- 
room for coach and economy passengers and are provid- 
ing other new in-flight features. On commuter and other 
short-haul routes, we have increased the legroom on all 
of our 737 twinjets to the same spacing as first class. We 
are redoubling our efforts to improve our on-time per- 
formance and have launched other programs internally- 
a new employees' suggestion system, a product develop- 
ment team and a corporate design study - to enhance 
the company's image and increase its load factors. 
At the same time, we have carefully pruned schedules 
to eliminate those flights that have the least potential for 
profit; have reduced the number of employees by nine 
percent from our 1969 high; have launched a program 
that will permit us to retire our remaining Electras; are 
seeking Civil Aeronautics Board approval of an agree- 
ment with an Alaska local service carrier to substitute its 
service for Western 's on the short-haul segments west 
of Anchorage that do not integrate economically with 
Western's route system and fleet; and have introduced 
strict cost-reduction programs in every department of 
the company. 
Another factor which makes the outlook for 1970 
unclear is the question of how much traffic the Boeing 
747 wide-bodied jet will divert from conventional jets. 
These new aircraft will make their appearance on Cali- 
fornia-Hawaii routes this spring and may be introduced 
in competition with Western on other routes in the near 
future. 
Your management recognizes that its most important 
task is to return the company to profitable operations as 
soon as possible and gratefully acknowledges the excel- 
lent support that is being given by our employees toward 
the accomplishment of this goal. We also appreciate the 
continuing support of our shareholders. We hope you will 
fly Western whenever possible and will urge your friends 
and associates to do likewise. 
\.A,, .1 IQ. c. 
~ 
Chairman of the Board President 
March 5, 1970 
 Financial Results Western incurred a net loss of 
$12,198,860, or $2.49 a share, in 1969, compared to earnings 
of $8,435,770, or $1.72 a share, in 1968. Per-share results are 
based on 4,903,879 shares for 1969 and 4,901,734 shares for 
1968, the number of shares outstanding as of December 31 
each year. 
The loss from operations totaled $12,400,902, compared 
to an operating profit of $19,681,421 in 1968. The application 
of other expense-primarily interest-increased the loss 
before tax credits to $27,273,860, compared to earnings of 
$13,160,770 before taxes in 1968. 
The reduction of the loss by reason of tax credits totaling 
$15,075,000 represents essentially two factors: 
1) The net credit of $12,925,000 generated by the claim for 
refund of taxes paid in 1966 and 1967, and 
2) The benefit flowing to earnings from the $2,150,000 
amortization of investment credits over essentially the 
useful life of the related purchased equipment. 
(See Note #1 of Notes to Financial Statements.) 
Revenues Total operating revenues for 1969 were 
$240,351,788, an 8.3 percent increase over the previous year. 
Fare increases discussed more fully in a later section 
added approximately $7,500 ,000 to 1969 passenger 
revenues. Had these increases been in effect for the full year 
of 1969 they would have produced in the area of $17 million. 
Seattle-Alaska and U. S.-Mexico fare increases for 1970 
also should have a favorable influence on yield and revenues. 
Revenues from the company's new routes to Hawaii, 
although slow to develop, continue to improve. However, 
revenues from the California-Twin Cities nonstop flights were 
substantially decreased effective October 4 when new 
schedule-for-schedule competition was introduced by a 
newly certificated major trunkline. 
Of Western's revenue dollar, 91 .6 percent was derived 
from passenger traffic (80 percent coach and 11 .6 percent 
from deluxe) . Express, freight and excess baggage accounted 
for five percent" mail, 1.9 percent; other sources 1.5 percent. 
Because of the strike and a slowdown in the growth of air 
travel, the number of passengers carried in 1969 increased 
only one percent. However, because the average trip length 
of Western's passengers increased from 675 miles in 1968 
to 696 miles in 1969, seat miles sold increased 4.7 percent. 
The length-of-haul increase is attributable to the addition of 
the long-haul Hawaii routes. 
Excluding July and August, which were strike-affected 
Review of the Year 
months in 1969, the number of passengers carried was 8.2 
percent greater and operating revenues 16.3 percent higher 
than for the comparable 1 O months of 1968. 
The use of discount fares, while still representing 41 .7 per- 
cent of all seat miles sold, declined below the volume sold 
in 1968, when 43.7 percent were sold at a discount. However, 
the latest figures before the strike period showed that the 
company's volume of discount travel , on a percentage basis, 
was slightly higher than the industry average. 
Fare Changes Despite industry fare increases of 3.8 per- 
cent on February 20 and 6.3 percent on October 1, Western's 
average revenue per seat mile sold increased only 2.6 per- 
cent in 1969-to 5.51 cents from 5.37 cents for 1968. 
The February increase did not apply to Alaska, Mexico or 
intra-California routes. Accordingly, it represented only a 3.1 
percent increase over 1968 revenues for Western 's system. 
(Although smaller than authorized by the CAB, increases in 
California commuter fares became effective on August 2.) 
The October 1 increase again did not include Alaska, 
Hawaii, Mexico or intra-Californ ia routes and, as a result, 
represented only a 3.7 percent increase for Western, in con- 
trast to 6. 3 percent for the domestic industry. 
An increase in certain Alaska fares became effective on 
November 15 and a second increase in California commuter 
fares was introduced on December 3. Approved for 1970 
implementation were additional increases in Alaska fares, 
effective January 1, and a 10 percent increase on all fares 
between the U.S. and Mexico, effective March 15. 
Inhibiting the growth of the average revenue per seat mile 
sold was the lower yield from the Hawaii routes. 
An additional development in the domestic fare picture 
was introduced early in 1970. Although the October 1 fare 
increases were originally approved by the CAB through Janu- 
ary 31, 1970, their extension beyond that date was subject to 
the negotiation of an agreement between the carriers, modify- 
ing the division of interline revenues and introducing lower 
interline fares in markets where they did not exist. 
Late in January, after a series of meetings in which the 
Civil Aeronautics Board threatened to roll back fares to their 
September 30 level, Western and other trunklines reluctantly 
agreed to a plan which will cause a greater share of revenues 
to be paid to the short-haul carriers in interline travel. 
As a result, the October 1 fare increases were extended 
through April 30, 1970. Prior to that date, the CAB expects 
to further consider the interline fare arrangements. 
 The impact of the new prorate and additional interline fares 
on Western's revenues is not significant for 1970, but any 
substantial increase in the company's length of haul in the 
future would bring about a dilution of Western's interline 
revenues. 
Expenses Total operating expenses for 1969 amounted to 
$252,752,690, a 25 percent increase over 1968. 
Operating expenses per seat mile produced increased 
from 2.85 cents in 1968 to 2.97 cents for 1969. Adding to 
the 1969 unit costs were those expenses incurred during the 
strike without corresponding revenue benefit. Excluding the 
two strike-affected months, the operating expense per seat 
mile produced for the non-strike months of 1969 was 2.89 
cents, compared to 2.87 cents for the same months of 1968. 
Major factors in the increased expense levels included 
the delivery of 19 new jet aircraft during the year, a 20 per- 
cent increase in seat miles produced and continuation of the 
inflationary trend that is escalating industry costs for wages 
and salaries, materials, services, landing fees and rentals. 
Wages, salaries and employee benefits costs increased 
23.7 percent to a total of $97,156,082, reflecting both addi- 
tional employees and material increases in wage rates. 
Depreciation and amortization were up 39 percent, reflecting 
a full year's charges for the 22 jet aircraft that went into service 
in 1968 and the addition of 13 jets in the first half of 1969. 
Interest charges increased from $6.5 million in 1968 to 
$14.7 million in 1969. 
As a result of the increases in both operating and non- 
operating expenses, the breakeven load factor increased 
from 50.7 percent in 1968 to 53.1 percent for 1969. 
Because of the high costs associated with the introduction 
of the 30 new Boeing 737s during 1968 and 1969, Western is 
amortizing certain of these costs over the first three produc- 
tive years of the aircraft. At December 31, 1969, $1,196,176 
had been deferred, compared to $1,000,460 at the end of 
1968. In a similar manner, $484,274 in Boeing 727 preopera- 
ting costs were deferred at the end of 1969. 
Finances The company's financial position is sound but 
the losses in 1969 (a pattern which commenced in October 
1968) have eroded the strength of previous years. An earnings 
pattern must be resumed to assure against further slippage. 
At this time the outlook is at best cautious. 
The ratio of current assets to current liabilities was $1.37 
to $1.00, down from $1.73 to $1.00 at the close of 1968. This 
position resulted from the year's losses and, in addition, the 
planned increases in current maturities of long-term debt 
which totaled $16,195,627 at December 31, 1969. The level of 
maturities will increase to $22,965,227 at the end of 1970 and 
will remain essentially at that level through 197 4. 
To improve the working capital position, the company 
continued to take advantage of accelerated tax deprecia- 
tion which, coupled with the loss for 1969, permitted the filing 
early in January 1970 of an application for tentative refund 
from loss carryback. This action underlies the account receiv- 
able for Federal Income Taxes of $12,285,989, which was 
collected in January 1970. 
The unamortized investment credit as of the close of 1969 
of $16,060,000 represents $2,066,000 remaining from invest- 
ment credits utilized by reduction of taxes paid and 
$13,994,000 remaining from investment credits applied 
against Deferred Federal Taxes on Income. (For further details 
see Note #1 of Notes to Financial Statements.) 
The Statement of Source and Application of Funds shows 
significant elements of such activity. Notwithstanding the loss 
for 1969, operations provided $23,967,645 essentially 
because depreciation and maintenance reserve provision of 
$37,692,055 did not require a cash outlay. The funds pro- 
vided were further increased by the return of deposits totaling 
$4,625,993 on the Boeing 727-200 aircraft (which were 
eventually leased by the company), the drawdown of the 
remaining $25 million available under credit agreements with 
insurance companies and a $4,706,000 net increase in the 
bank revolving fund. 
Funds applied were consumed essentially by the purchase 
of airplanes, property and equipment totaling $46,196,539 
and by providing for the 1970 payments of long term debt 
amounting to $16,195,627. 
At the beginning of 1969 the company had on order six 
Boeing 727-200 trijets. The losses of the year 1969, the result- 
ant erosion of working capital, and the fundamental shortage 
of funds available on an unsecured basis dictated that those 
aircraft be acquired on other than the basis of outright pur- 
chase. Further motivation was provided by the desire to 
achieve utilization of the investment credit. Hence, a 15-year 
lease was arranged through facilities of the Bank of America 
on a basis deemed satisfactory to the company. 
The lease arrangement resulted in a modification of the 
bank revolving fund, which was reduced to $110,006,000 and 
converted to a term note on December 31, 1969. (See Note 
#2 of Notes to Financial Statements.) 
 Brief Statement of Earnings 
1969* 
Western's revenues came from: 
Passengers 
Coach ...................... $192,659,374 
Deluxe . . . . . . . . . . . . . . . . . . . . . . 27,870,293 
220,529,667 
Express, freight and baggage . . . 11,969,392 
Mail . . . . . . . . . . . . . . . . . . . . . . . . 4,502,928 
Other income................. 3,705,414 
240,707,401 
Western's expenses were: 
Wages and salaries . . . . . . . . . . . . 87,495,153 
Social security, group 
insurance and retirement 
plans . . . . . . . . . . . . . . . . . . . . . 9,660,929 
Property, fuel and 
other taxes . . . . . . . . . . . . . . . . . 4,985,938 
Aircraft fuels ................ . 
Depreciation and amortization .. . 
Materials and repairs ......... . 
Utilities and services ... . ... .. . 
Service to passengers ........ . 
Rentals of ground facilities .... . 
Landing fees ................ . 
Advertising and publicity ...... . 
Insurance .................. . 
32,857,173 
34,820,805 
21,442,561 
20,399,425 
11,926,473 
5,029,186 
4,360,150 
8,210,484 
5,148,098 
Interest . . . . . . . . . . . . . . . . . . . . . 14,747,559 
Other costs . . . . . . . . . . . . . . . . . . 6,897,327 
267,981,261 
Earnings {loss) before 
taxes on income . . . . . . . . . . . . (27,273,860) 
Taxes on income (tax credits) . . . {15,075,000) 
Net earnings (loss) .. . . .. ...... $(12,198,860) 
1968 
$174,924,828 
30,828,463 
205,753,291 
9,331,361 
4,127,583 
3,083,569 
222,295,804 
71,884,941 
6,650,184 
3,915,863 
27,190,628 
25,050,993 
17,366,088 
16,062,717 
11,059,337 
4,397,077 
3,269,829 
5,784,646 
4,603,488 
6,535,940 
5,363,303 
209,135,034 
13,160,770 
4,725,000 
$ 8,435,770 
'Operations were suspended from July 29 to August 16, 1969 because 
of a strike. 
Brief Balance Sheet 
1969 
Western owns: 
Cash and short-term securities ... $ 28,454,327 
Receivables due from others . . . . 19,408,382 
Federal income taxes 
refundable . . . . . . . . . . . . . . . . . 12,285,989 
Maintenance and 
operating supplies 
Buildings and 
improvements, net 
Flight and other 
13,016,516 
14,007,513 
equipment, net ............. 271,616,045 
Deposits on new equipment . . . . . 133,087 
Prepaid expenses . . . . . . . . . . . . . 2,986,496 
Equipment not used in 
operations, net . . . . . . . . . . . . . 2,062,898 
Deferred charges and other . . . . . 3,616,859 
Western owes: 
Payables due to vendors 
and others ........ ..... .. . . 
Federal income taxes- 
deferred .................. . 
Unamortized investment credits .. 
Other deferred items . ........ . 
Tickets sold but not yet 
367,588,112 
34,582,902 
17,919,000 
16,060,000 
1,445,445 
used . . . . . . . . . . . . . . . . . . . . . . 4,926,089 
Notes payable-current 
and long term . . . . . . . . . . . . . . 213,345,215 
Excess of what is owned 
over what is owed, or 
288,278,651 
shareholders' equity ......... $ 79,309,461 
1968 
$ 27,870,420 
17,954,873 
3,426,967 
8,624,401 
11,424,108 
256,435,162 
16,927,291 
3,308,028 
256,000 
2,811,900 
349,039,150 
30,666,244 
20,344,000 
15,135,000 
558,934 
3,251,843 
185,220,843 
255,176,864 
$ 93,862,286 
 Dividend Action The company paid cash dividends of 25 
cents a share on March 3 and May 26, 1969. No dividends 
have been declared since that time. The conditions and 
requirements which restrict the payment of dividends are 
described in Note 2 of the Notes to Financial Statements. 
Annual Meeting The 1970 meeting of shareholders will be 
held at the Beverly Hilton Hotel, Beverly Hills, California, on 
April 23. On or about March 19, stockholders will receive 
formal notice of the meeting and proxy material 
Shareholders, Stock and Debentures At the close of 1969, 
there were 4,903,879 shares of Western Air Lines common 
stock issued and outstanding, compared to 4,901,734 shares 
at the end of 1968. 
At year's end 806,884 shares were reserved for conversion 
of the 5 percent convertible subordinated debentures sold 
early in 1968 and 186,200 shares reserved for stock options 
outstanding or available for grant under the company's quali- 
fied stock option plan. 
Holders of the company's convertible debentures, which 
have a conversion price of $36.75 a share, received interest 
at the rate of 5 percent per year on February 1 and August 
1, 1969. 
The company's stock was held by approximately 20,000 
shareholders. 
At the 1969 annual meeting of shareholders in Beverly Hills 
in April, 7 4.4 percent of all shares were voted in person or 
by proxy. 
Shareholders' equity in 1969 declined to $79,309,461, or 
$16.17 a share, from 1968 equity of $93,862,286, or $19.15 
a share. 
Aircraft Western took delivery of 19 new aircraft in 1969. 
Thirteen Boeing 737s were delivered in the first half of the 
year, bringing the company's fleet of the short-range twinjets 
to a total of 30. 
During the fourth quarter, six Boeing 727-200 trijets, which 
were ordered in January 1968, were delivered under a lease 
arrangement. 
Purchase arrangements announced in January 1969 for 
12 other aircraft-three Boeing 747s, five Boeing 707s and 
four 727-200s - were cancelled later in the year when :3atis- 
factory financing arrangements could not be made. 
Western has no other aircraft on order but is following the 
progress of all models of the new generation of wide-bodied 
aircraft for future needs. 
At year's end the company operated a fleet of 70 jet air- 
craft: Five 707s, 26 Boeing 720B's (one 720B was sold during 
1969), three Boeing 720s, 30 Boeing 737s and six 727s. 
In January 1970, the company made plans to retire its 
remaining Lockheed Electras. Service with the three all-cargo 
Electras was suspended on January 31. Five passeng er/ 
cargo versions, which were operated on Alaskan routes in 
1969, are scheduled to be withdrawn from service this spring. 
The eight aircraft, along with four all-passenger Electras that 
were previously withdrawn from service, are for sale. 
Management Changes Several changes in the company's 
management were made at the board and executive levels 
during the year. 
Early in 1969 a proxy contest developed, involving the 
extent to which Mr. Kirk Kerkorian, who had become 
Western's largest stockholder, should have representation on 
the board of directors. To achieve a harmonious solution, the 
board, at its morning meeting on April 24, increased the num- 
ber of directors to 21 . Three incumbent directors-Leonard 
K. Firestone, Edwin W. Pauley and Howard C. Westwood - 
then submitted their resignations and withdrew as nominees 
for election at the shareholders' meeting. The resulting nine 
vacancies on the 21-man board were filled by election of the 
nine members of Mr. Kerkorian 's slate of nominees. The new 
directors were: Fred Benninger, Lowell S. Dillingham, Leo 
H. Dwerlkotte, Sherwood H. Egbert, Peter M. Kennedy, Mr. 
Kerkorian, Walter M. Sharp, William Singleton and John S. 
Wiester. The full board of 21 was then elected by the share- 
holders at the annual meeting later the same morning. 
At the July meeting of the board, Edwin W. Pauley was 
elected to succeed Mr. Dillingham, who had resigned . At the 
October board meeting , James D. Alj ian was elected to fill 
the vacancy created by the death of Mr. Egbert. 
At its October meeting, the board elected J. Judson 
Taylor president and chief executive officer, Terrell C. Drink- 
water chairman of the board, and Mr. Benninger vice chair- 
man of the board. Mr. Taylor joined the company in 1942 and 
was serving as senior vice president and treasurer; Mr. Drink- 
water had served as Western's president since January 1947. 
Other re-assignments and promotions of officers and 
department directors included : Charles J. J. Cox, vice presi- 
dent-finance; Ernest T. Kaufmann , vice president-regulatory 
affairs; Lawrence H. Lee, vice president-industrial relations; 
Philip E. Peirce, vice president-administration; J. S. Neel, vice 
president-ground services; R. 0 . Hammond, treasurer and 
 assistant secretary; Roderick G. Leith, assistant treasurer and 
controller; H. S. Gray, assistant treasurer; David E. Holt, 
assistant vice president-agency and tour sales; Neil S. 
Stewart, assistant vice president-government and industry 
affairs and Dan A. Zaich, assistant vice president-labor rela- 
tions. 
The company suffered the loss of its vice president-cargo 
sales on August 9 when Harold A. Olsen died unexpectedly. 
At its first meeting of 1970, the board voted to reduce the 
number of directors from 21 to 20 after Otis Chandler, who 
had served as a director since 1964, resigned. Goodrich 
Lowry, who was elected a director in 1957 and became a 
director-emeritus in October 1967, also resigned. 
Sales and Service Despite the strike which halted all flights 
for 18 days during the peak travel period and resulted in less- 
than-usual traffic in the weeks that followed the shutdown, 
Western carried a record 5,752,072 passengers during 1969, 
compared to 5,692,947 in 1968. 
Passenger revenues increased 7.2 percent, from 
$205,753,291 in 1968 to $220,529,667 in 1969. 
Revenues from air cargo shipments (freight, express, excess 
baggage, air mail and regular first class mail) increased from 
$13,458,944 in 1968 to $16,472,320 in 1969. 
Although showing increases in se&t miles sold that were 
higher than the industry average before the strike, the com- 
pany was not able to sell a satisfactory proportion of the 
increases in seat mile production that were introduced dur- 
ing the year. As a result, Western's overall passenger load 
factor decreased from 54.1 percent in 1968 to 47.3 percent 
in 1969. 
Consuming a large share of the company's marketing effort 
during the year was the addition of Hawaii to the Western 
route system. Recognizing that the majority of Hawaii traffic 
is booked several months in advance of actual travel, the 
company began early in the year to identify Western with the 
Hawaii markets. 
Based on an "Islander" theme, a team of sales and service 
personnel developed and tested in-flight and ground features 
designed to create a Polynesian vacation atmosphere the 
moment a passenger checked-in for his flight to Hawaii. The 
"Islander" concept was constructed around dining and per- 
sonalized service that has since been described by many 
Hawaii travelers as "the finest ever provided to the islands." 
Despite months of preparation, the company found the 
highly competitive Hawaii market difficult to penetrate. 
Because of the repeated postponements in the effective date 
of the CAB's final decision, and the strike that halted all 
operations only four days after Los Angeles-Hawaii service 
was inaugurated, the company lost virtually all of its advance 
bookings for 1969. 
Western's initial pattern of service included 34 roundtrips 
a week to Honolulu from the West Coast gateway cities of 
Los Angeles, San Francisco, Oakland and San Diego, with 
through-plane service to Las Vegas, Phoenix, Salt Lake City, 
Denver and Minneapolis-St. Paul and the first direct service 
weekly between Alaska and Hawaii. 
Weekly Hilo-Los Angeles service was inaugurated on 
November 1 and Hilo-San Francisco service on December 
15 in order to participate in the group travel that begins a 
Hawaiian vacation at Honolulu and departs for the Mainland 
from Hilo at the end of the tour. 
Western 's inauguration of service to Hawaii was provided 
by the five Boeing 707s that were delivered in 1968. The addi- 
tion of a 720B to these new routes in December increased 
the company's Hawaii service to 48 roundtrips a week. 
The 13 Boeing 737 twinjets that were delivered in the first 
half of 1969 were used to increase frequency on existing 
commuter and short-haul routes and, following the inaugura- 
tion of service to Hawaii, to supplant service that had been 
provided by the 707s on domestic routes. 
Delivery of six new Boeing 727s late in the year permitted 
the company to withdraw five additional 720B's from service 
in order to convert them to overwater configuration. 
In an effort to attract new business travel to Western flights 
and stimulate increased vacation travel between the 49th and 
50th states, Western introduced an attractive and exclusive 
California-Hawaii-Alaska "triangle fare" on October 30. The 
fare permits travelers between Southern California and 
Anchorage to visit Hawaii on either leg of their trip at no extra 
cost. Savings in fare are available from any of the points on 
the triangle, with Western receiving the entire long-haul. In 
order to increase its applicability, a second weekly Anchor- 
age-Honolulu flight was added on December 15. 
Although slow to develop, Hawaii traffic has increased 
steadily and the all-important tour and group travel that was 
not available to the company in 1969 is being booked in 
volume for 1970. 
On January 15, 1970, Western introduced the first of two 
major steps to improve its competitive posture in the Hawaii 
markets. In an effort to increase its share of the coach and 
economy traffic, the company increased the legroom in each 
 of these sections to 38 inches, the same as first class. At the 
same time, each Hawaii aircraft was equipped with a com- 
pany-designed "Aloha table," a portable unit which resembles 
the armrest/table that is installed between first class seats. 
Whenever the middle seat is not occupied in the coach sec- 
tion, the armrests may be removed and the Aloha table 
installed to provide wider space and "two plus two" seating 
and convenience in the coach section. 
The second step in the program will be accomplished by 
March 6 when the installation of widescreen movie and stereo 
equipment will be completed on eleven aircraft to be used 
on Hawaii routes in 1970. Schedule frequency will be increased 
to 70 roundtrips a week on March 20. 
As it has in other vacation markets it serves, the company 
has developed an exclusive , low-cost " Magic Week in 
Hawaii " tour package that is being widely promoted . Western 
is working closely with ground, sea and other air transporta- 
tion companies and hotel and tour operators in the islands in 
the production of sports and other recreation tours that will per- 
mit the company to participate in every facet of Hawaii travel. 
Other major sales programs for Western during 1969 
involved its two major Mexico destinations, Acapulco and 
Mexico City; Alaska; the company's many Sun Break winter 
vacation areas; an annual Ski Country program that included 
16 major ski areas; and summer travel to WAL's North Country 
attractions -Yellowstone and the national parks of the 
Rockies, Minnesota, the Pacific Northwest, and the Canad ian 
provinces of British Columbia and Alberta. 
Travel agents, who participated in the sale of approximately 
40 percent of the company's passenger revenues, tour opera- 
tors, hotels and operators of other forms of transportation 
again played a major role in Western's marketing activities. 
Personnel The company began 1969 with 8,919 employees 
on its payroll. Stimulated by the delivery of additional aircraft 
and preparations for the inauguration of service to Hawaii, this 
number increased 12.4 percent to a record 10,026 employees 
at the end of July. 
In mid-August, a program to reduce costs was launched 
and resulted in a decrease to 9,011 employees by the end 
of February . 
Wages and salaries for the year amounted to $87,495,153, 
approximately 34.6 percent of operating expenses, compared 
to $71 ,884,941, or 35.6 percent of operating expenses, in the 
previous year. 
Labor contracts which will result in increased costs of 14 
percent per year in wages and benefits over the next three 
years were signed with the company's 2,000 mechanics and 
4,000 agents and clerical personnel. Negotiations with these 
two groups were concluded in August and September. An 
agreement which covers stewardesses is being negotiated 
at the present time and a contract covering pilots will be open 
for negotiation in September of this year. 
Route Development Most important development in 
Western's route program during 1969 was the final decision 
in the TransPacific case in which the company received routes 
to Hawaii it has sought for more than 10 years. 
The domestic decision in the case, which gave Western . 
routes to Honolulu/Hilo from 11 Mainland points, became 
effective on July 22 after several postponements. The decision 
was orig inally issued by the Civil Aeronautics Board on Janu- 
ary 4 with an effective date of March 5. Western selected 
April 27 as the date it would inaugurate service and began 
preparing personnel, equipment and facilities for that date. 
Because of the delays in the international phase of the 
case, however, the domestic decision went through a series 
of postponements that made it necessary for the company to 
repeatedly delay its service. Neither the five Boeing 707s that 
were to be used in Hawaii service or the employees who 
staffed the company's Hawaii facilities could be used effi- 
ciently during the costly three-month delay for Western. 
The company became the first of the new Hawaii carriers 
to inaugurate service on July 25 when it operated flights from 
Minneapolis-St. Paul and from Phoenix to Honolulu, both 
via Los Angeles. 
Introduction of Western's Hawaii service from San Diego, 
San Francisco, Oakland, Las Vegas, Denver and Anchorage 
was delayed until late August by the strike. 
Of equal importance in terms of immediate impact on com- 
pany earnings was the CAB decision which provided com- 
petitive service on the nonstop portions of Western 's most 
profitable market, California-Twin Cities. Competitive service 
from Los Angeles and San Francisco to the Twin Cities was 
inaugurated on October 4. The decision in that case also 
made Western 's temporary authority to operate nonstop 
service on these segments permanent. 
First competitive service also was authorized and inaugu- 
rated by other carriers on the company's Denver-Twin Cities, 
Denver-Casper, Denver-Billings routes and additional com- 
petition was placed on the Denver-Salt Lake City segment. 
New authority also was granted to intra-California carriers 
 KING 
SALMON 
ANCHORAGE 
VANCOUVER 
WESTERN'$ ROUTES 
PROPOSED ROUTES - - - - - -- - - - - - - 
CALGARY 
GREAT FALLS 
HELENA 
BUTTE 
W. YELLOWSTONE 
BILLINGS 
SHERIDAN 
CATELL CASPER 
GUADALAJARA 
PIERR 
RAPID Cl 
MEXICO CITY 
ACAPULCO 
 operating between Southern California and the San Fran- 
cisco/Oakland/San Jose and Sacramento areas. 
In an effort to offset the revenue losses suffered by Western 
through these and other increases in the level of competition 
that have been made by regulatory action in recent years, the 
company has intensified its efforts to obtain new routes that 
would give it access to the major traffic centers of Chicago 
and the East Coast. Applications for these areas are pending 
in four cases now awaiting CAB action: 
Twin Cities-Milwaukee Long Haul Investigation-A case 
to investigate the need for additional service from the Twin 
Cities and/or Milwaukee to Portland/Seattle and to Boston, 
New York, Philadelphia and Washington/Baltimore. Although 
not recommended by the Examiner in the case, Western is 
seeking to serve all markets in the case. A final decision is 
expected by this summer. 
Additional Service to San Diego Case-Western was 
recommended for San Diego-Denver, San Diego-New York 
and San Diego-Washington/Baltimore nonstop authority by 
the Examiner. It also seeks San Diego-Chicago authority. 
A final decision is expected soon. 
Service to Omaha and Des Moines-Western was recom- 
mended bythe Examiner for Seattle/Portland-Omaha, Denver- 
Omaha and Omaha-Chicago authority. It is also seeking Los 
Angeles- and San Francisco- and Twin Cities-Omaha/Des 
Moines authority and routes to New York and Washington/ 
Baltimore via these Midwest cities. A final decision is ex- 
pected by this summer. 
Service to Salt Lake City Investigation -a case involving 
service between Salt Lake City, Chicago, New York, Washing- 
ton/Baltimore and San Francisco. Although a carrier which 
already has transcontinental authority was recommended by 
the Examiner in the case, Western is seeking to extend its 
San Francisco-Salt Lake City authority to Chicago, New York 
and Washington/Baltimore. A final decision in the case is 
expected by this fall. 
In the Phoenix-Portland/Seattle Nonstop Case, in which 
Western is seeking authority to eliminate a mandatory stop 
at Los Angeles on existing flights, the Examiner has recom- 
mended that Western and one other trunkline provide com- 
petitive service on the route. The company does not believe 
a second nonstop carrier is required and is urging the CAB 
to reverse this portion of the Examiner's recommendation . 
Final board action is expected late this year. 
A route case designed to bring additional competition to 
the company's important Pacific Coast routes is the Pacific 
Northwest-California Service Investigation. The Examiner 
has recommended that three additional carriers be certifi- 
cated to provide competitive service in the Seattle and Port- 
land to San Francisco/Oakland/San Jose and Los Angeles/ 
Ontario/Long Beach markets. Western, which would be per- 
mitted to eliminate a stop on its San Diego-Portland/Seattle 
route, is contending that the Examiner's recommendations 
would result in excessive competition in these markets and 
has asked the CAB to reverse the decision. A final board 
decision is expected later this year. 
Awaiting an Examiner's decision is the Twin Cities/Milwau- 
kee-Southeast Points Case, in which Western has applied 
for routes to Atlanta, Tampa and Miami. 
Two cases in which hearings will begin shortly are the 
Las Vegas/Reno-Portland/Seattle Nonstop Service Investi- 
gation, in which Western is an applicant for nonstop service 
from Las Vegas and Reno to Portland and Seattle, as well as 
service between the two Nevada cities; and the Alaska 
Service Investigation, which will review intra-Alaska service 
and routes from Portland and Seattle to key cities in Alaska 
(but not Portland/Seattle-Anchorage, which is not an issue 
in the case). Pending final outcome of the case, Western 
obtained temporary authority from the CAB to suspend 
service at Yakutat and Cordova, effective September 11. 
Early in 1970, the company reached an agreement with 
Wien Consolidated Airlines, an Anchorage-based local 
service carrier, whereby service by Wien would be substi- 
tuted for that now being provided by Western on routes west 
of Anchorage. 
On February 2, Western and Wien filed a joint application 
with the CAB seeking authority for Western to suspend service 
on the Anchorage-Kenai-Homer-Koci iak and Anchorage- 
Homer-King Salmon routes and for exemption authority for 
Wien to provide the service in lieu of Western. 
Because of the local service nature of the routes-Anchor- 
age-Kenai, 61 miles; Kenai-Homer, 64 miles; Homer-Kodiak, 
137 miles; and Homer-King Salmon, 195 miles - Western 
believes these routes can best be served by a local service 
carrier based in Alaska. 
Western would continue to serve Alaska on Seattle- 
Anchorage, Seattle-Ketchikan-Juneau-Anchorage and Hono- 
lulu-Anchorage flights. 
 Financial 
Revenues:5 
Passenger ... .. . . . .... .. . ... .. ... ... .. . . .... .. . ..... . ... .... . .. .. . 
Express, freight and excess baggage .. . .... .. ... ... . . .. . ............ . . 
Mail ......... . .... .. . .. .......... .. .... . ........ . ......... .. .... . 
Other . . ....... . ..... .. .. ... . . . . .. ...... . .... . . ..... . ... . . . . ... . . . 
Total Revenues ... ... . . ... . ..... .. ........... . .. . ..... . ..... . ... . 
Operating Expenses:5 
Depreciation and amortization ..... . ....... . . . . . ... . ...... . .. .. . . ... . . 
Payroll ....... . . .. . .... . .... . ....... . .. . . . . ... .. . . .. .. . . . . .. .. .. . . 
Other ... .. . .. .... . . ... .. . .. . . . ......................... . . . ..... . . 
Total Operating Expenses .................. . ... . .. . .............. . 
Operating Incomes (Loss) .... . . .. . . .. .... . ..... . ....... . ...... . ...... . 
Interests .. ... ... . . ............... . ... .... .. . . . . . .... . .. . ... .. ..... . . 
Other Income and Expenses-Nets .. ... . . ... . . .... .. ... ... . . . .. . .. .... . . 
Earnings (Loss) before Taxes on Incomes .. ..... ... ......... . ... . .... . 
Taxes on Income (Tax Credits)s ............................. . ....... . .. . 
Net Earnings (Loss) from Operationss .......... .. . . . . . .. ...... . ... . . . 
Gain on Major Dispositions of Property (Less 
Applicable Income Taxes) 5 
                   
Net Earnings5 (Loss) .. ... .. .. ... . ... ... . . . . . .. . . . . . .. . .. ........ . . 
Shareholders 
Net earnings (loss) from operations per share2 
             
Gain on disposition of property per share2 
                
Total . .. . . ... . . .. . . .. . . . . . . ... .. . .... . . . .... . ....... . . . . . . . ... . 
Dividends paid per share: 
Cash3 
                         
Stock .. .. . ...... . . . ...... . . . . ...... . ... .. ... . .. . .. .. . . . . .. .... . . . 
Shares outstanding-actuals ... .. . .. ...... . ...... . .......... . ......... . 
- adjusted2 
 
5 
              
Shareholders' equity- total5 
                  
Shareholders' equity-a share2 
                 
Working capital5 
                
Long-term debts .. .. ..... ... .. . .... . ... ... . . ... . ... . . . . . ......... . .. . 
Property and equipment-nets .. .. ....... ... . ... .. .. . ..... . . .. .. ...... . 
Total assets5 
                         
Operations 
Route miles at end of year .. . . .. . . . . ... . .......... .. ... . . . .. . ..... ... . . 
Airplanes operated at end of year: 
Boeing 720-B . . . . .. .. .... ........ . ...... . .. ......... . . .. ... .. .... . 
Boeing 720 . . .. ..... ... ... ... ... .... . ........ . ... . .. .... . . . . .. . .. . 
Boeing 707-300C .. . .. .. .. .. ... . . .... . ....... .. . . ......... .. . . . . .. . 
Boeing 737 .. .. .. ..... ... . . . . . . . . .... . ...... . . . ...... . .. ... . . .... . 
Boeing 727 - leased . .. . . ...... . .... . ..... . . . . . ..... . ....... . ..... . 
Other aircraft . . .. . . ...... . ..... . .. . .... . .. .. ... . ...... . . . ..... . . . . . 
Airplane miles flown5 
                  
Ton miles produced5 
   .                  
Ton miles so Ids .. ..... . .... .. ... . . . ... . ............. . . . .. . .. . . . . . ... . 
Seat miles produceds . . . ... .. ..... . . . ....... . .... .. .. . .... . ..... . . . . . . 
Seat miles sold5 
                 
Express, freight and mail ton miles solds . . . ..... . ..... . ... . . .. ....... . ... . 
Passengers carried .. .. . .... . .. . . .... .. . . ..... .. . ............ .. ...... . 
Express, freight and mail tons carried . . . . . .... . ................. . ... .. .. . 
Passenger load factor-actual % .... . .. . ... . ... . ....... . . . . . .. . 
- breakeven point % ... . .. .. ....... . . ....... . . .... . 
Average length in miles per passenger trip ... . ..... .. .... . .... . .. . .... . .. . 
Operating expenses per seat mile produced . . .... . . . . . .. ...... . .. . .... . .. . 
Average revenue per seat mile sold ... . ....... . . . . . . ... ...... . .... . ..... . 
Employees at end of year . ..... ..... . . . .... . ... . .......... .. ..... .. ... . 
10 Years of Growth 
19694 
$220,530 
11,969 
4,503 
3,350 
240,352 
34,821 
87,495 
130,437 
252,753 
(12,401) 
(14,748) 
(125) 
(27,274) 
(15,075) 
(12,199) 
$ (12,199) 
$ (2.49) 
$ (2.49) 
$ 0.50 
4,904 
4,904 
$ 79,309 
16.17 
20,447 
197,150 
285,757 
367,588 
24,523 
26 
3 
5 
30 
6 
8 
72,650 
1,077,657 
448,420 
8,509,441 
4,021 ,296 
60,514 
5,752,072 
66,107 
47.3 
53.1 
696 
$ .0297 
$ .0551 
9,225 
1968 
205,753 
9,331 
4,128 
2,741 
221,953 
25,051 
71,885 
105,335 
202,271 
19,682 
(6,536) 
15 
13,161 
4,725 
8,436 
8,436 
1.72 
1.72 
1.00 
4,902 
4,902 
93,862 
19.15 
25,764 
183,718 
284,787 
349,039 
14,156 
27 
3 
5 
17 
12 
60,125 
891 ,001 
418,856 
7,096,229 
3,841 ,864 
47,446 
5,692,947 
58,129 
54.1 
50.7 
675 
.0285 
.0537 
8,919 
1967 
178,527 
7,581 
4,221 
2,153 
192,482 
20,085 
57,975 
89,082 
167,142 
25,340 
(3,011) 
17 
22,346 
10,125 
12,221 
12,221 
2.50 
2.50 
1.00 
4,893 
4,893 
90,016 
18.40 
19,585 
80,189 
183,106 
231,342 
14,156 
27 
3 
21 
51,692 
728,200 
360,791 
5,879,442 
3,327,160 
38,940 
5,107,672 
48,579 
56.6 
49.5 
651 
.0284 
.0537 
7,282 
All financ ial data in this report give effect, retroactively th roughout the periods prior to 1968, to the merger of Pacific Northern Airlines into Western on July 1, 
1967, which was accounted for as a pooling of interests. 
2Based on shares of the Company outstanding at the close of the respective periods. adjusted to give retroactive effect to stock dividends, the May 1964 three- 
for-one spl it, and the equivalent outstand ing shares of Pacific North ern Airlines, Inc. , merged into the Company on July 1, 1967. 
19664 1965 1964 1963 1962 19614 1960 
164,186 129,704 121,928 103,183 89,837 67,442 71,577 
6,848 5,991 5,897 5,055 4,747 3,833 3,775 
4,255 3,135 2,962 2,603 2,659 2,364 2,300 
1,895 1,768 2,095 3,472 2,878 2,935 3,022 
177,184 140,598 132,882 114,313 100,121 76,574 80,674 
15,779 14,676 12,980 12,373 14,605 12,033 11 ,040 
47,350 38,731 34,500 30,114 27,108 22,837 23,982 
77,708 62,391 57,650 50,969 47,997 38,848 38,740 
140,837 115,798 105,130 93,456 89,710 73,718 73,762 
36,347 24,800 27,752 20,857 10,411 2,856 6,912 
(3,239) (2,553) (2,491) (2,916) (2,725) (1 ,930) (1,428) 
775 253 783 621 472 (140) 439 
33,883 22,500 26,044 18,562 8,158 786 5,923 
15,558 10,337 12,493 9,252 4,130 443 3,365 
18,325 12,163 13,551 9,310 4,028 343 2,558 
883 191 889 807 86 
18,325 13,046 13,551 9,501 4,917 1,150 2,644 
3.79 2.52 2.81 1.93 0.83 Q,07 0.53 
0.18 0.04 0.19 0.17 0.02 
3.79 2.70 2.81 1.97 1.02 0.24 0.55 
1.00 0.80 0.65 0.37 0.33 0.33 0.33 
5% 
4,835 4,826 4,826 1,965 1,965 1,965 1,965 
4,835 4,826 4,826 4,826 4,826 4,826 4,826 
81,750 67,361 57,748 46,988 39,061 35 ,574 35,854 
16.91 13.96 11 .97 9.74 8.09 7.37 7.43 
18,047 11,522 8,274 5,031 12,315 5,369 16,757 
54,867 47,411 33 ,938 41 ,106 48,856 39,018 25,097 
145,771 124,096 99,928 93,284 80,052 69,865 46,833 
192,008 157,973 138,335 125,806 115,266 95,258 78,836 
13,075 13,075 12,991 12,991 13,086 12,368 12,368 
22 18 12 10 7 4 
3 2 2 2 2 
23 24 33 33 34 39 45 
42,830 36,554 36,746 33,388 29,551 25,239 30,410 
585,378 483,033 450,856 400,395 348,854 256,572 237,118 
314,137 244,588 231,303 191 ,229 159,658 121 ,850 127,609 
4,800,901 4,016,921 3,794,648 3,335,083 2,746,549 1,967,313 2,016,690 
2,898,088 2,243,695 2,124,582 1,753,037 1,435,992 1,080,189 1,150,785 
33,070 26,435 24,625 20,622 19,786 16,315 15,214 
4,700,839 3,807,706 3,717,189 2,970,909 2,270,455 1,659,323 1,841 ,863 
42,714 33,511 30,956 25,890 25,256 20,378 19,829 
60.4 55.9 56.0 52.5 52.3 54.9 57.0 
47.9 46.2 44.4 44.3 48.6 55.4 56.5 
616 589 572 590 633 651 625 
.0293 .0288 .0277 .0280 .0327 .0375 .0366 
.0567 .0578 .0574 .0589 .0626 .0624 .0622 
6,294 5,068 4,719 4,126 3,713 3,418 3,347 
i cash dividends per share for periods prior to January 1, 1967 are stated on the basis of the Company's shares (exclusive of equivalent Pacific Northern 
shares) outstandi ng at the date such dividends were declared as adjusted for stock dividends and the stock split. 
4Qperations were suspended from July 29 to Aug ust 16, 1969 and substantially curtailed from February 17 to June 1, 1961 because of strikes. Five other 
major carriers were struck from July 8 to August 19, 1966. 
iooos om itted . 
 ASSETS 
Current Assets: 
Cash ................................................. . 
Short-term securities (approximating market) ................. . 
Receivables ............................................ . 
Federal income taxes refundable (Note 1) . ................... . 
Maintenance and operating supplies ........................ . 
Prepaid expenses ....................................... . 
Total Current Assets . .................................. . 
Property and Equipment at Cost: 
Flight equipment ........................................ . 
Ground equipment ...................................... . 
Deposits on purchase contracts .. .. ........................ . 
Less allowance for depreciation and maintenance ............ . . 
Deferred Charges and Other Assets: 
Boeing 737 and 727 preoperating costs, net .................. . 
Equipment not used in operations, net ....................... . 
Other items ............................................ . 
See accompanying notes to financial statements 
1969 
$ 23,472,571 
4,981,756 
19,408,382 
12,285,989 
13,016,516 
2,986,496 
76,151,710 
370,020,328 
58,954,097 
133,087 
429,107,512 
143,350,867 
285,756,645 
1,680,450 
2,062,898 
1,936,409 
5,679,757 
$367,588,112 
1968 
$ 21 ,895,337 
5,975,083 
17,954,873 
3,426,967 
8,624,401 
3,308,028 
61,184,689 
331,460,810 
56,286,880 
16,927,291 
404,674,981 
119,888,420 
284,786,561 
1,000,460 
256,000 
1,811,440 
3,067,900 
$349,039,150 
 LIABILITIES 
Current Liabilities: 
Accounts payable ........ . . .. .... . ............ . ..... . ... . 
Accrued salaries and wages ....... . . . ... . . . ............ . . . 
Accrued liabilities ................ . .... . ....... . . . ....... . 
Unused transportation ........ . ........ . .......... . .... . . . . 
Current maturities of long-term debt .. ..................... . . 
Total Current Liabilities . ...... . . . ..... .. .. . . . ... ... .... . 
Long-Term Debt (Note 2) .. . .. . ..... . ......... . .... . .. . .. . 
Deferred Credits (Note 1 ): 
Deferred federal taxes on income ............ . ..... . . .. .... . 
Unamortized investment credits ........... . . . ..... . . . ...... . 
Other ................... . ........ .. ...... . .... . ... . ... . 
Shareholders' Equity (Notes 2 and 5): 
Common stock- $1 .00 par value per share 
Authorized 10,000,000 shares 
Issued 4,903,879 and 4,901,734 shares . . ..... . . .. ........... . 
Capital in excess of par value .... . . . ....... . ..... .. ..... . . . 
Retained earnings .... . .. . ......... . ........ . ..... . ..... . . 
Balance Sheet 
Western Air Lines Inc. 
December 31, 1969 with comparative figures for 1968 
$ 
1969 
18,227,504 
9,421,598 
6,933,800 
4,926,089 
16,195,627 
55,704,618 
197,149,588 
17,919,000 
16,060,000 
1,445,445 
35,424,445 
4,903,879 
19,235,433 
55,170,149 
79,309,461 
$367,588,112 
$ 
1968 
16,189,708 
7,971,475 
6,505,061 
3,251,843 
1,502,627 
35,420,714 
183,718,216 
20,344,000 
15,135,000 
558,934 
36,037,934 
4,901,734 
19,139,909 
69,820,643 
93,862,286 
$349,039,150 
 Statement of Earnings and Retained Earnings 
Western Air Lines Inc. 
For the year ended December 31, 1969 with comparative figures for 1968 
Operating Revenues: 
Passenger ............................................. . 
Express, freight and excess baggage ........................ . 
Mail .................................................. . 
Other ................................................. . 
Operating Expenses: 
Flying operations ........................................ . 
Maintenance ........................................... . 
Passenger service ....................................... . 
Aircraft and traffic servicing ............................... . 
Marketing and administrative .............................. . 
Depreciation and amortization (Note 6) ...................... . 
Operating Income (Loss) ................................ . 
Other Income (Expenses): 
Interest expense ........................................ . 
Interest income ......................................... . 
Other expense - net ..................................... . 
Earnings (Loss) before Taxes on Income ................... . 
Taxes on Income (tax credits) (Note 1) .................... . 
Net Earnings (Loss) 
$2.49 net loss per share in 1969 and $1.72 net earnings per 
share in 1968 based on shares outstanding at end of each 
year ($1.64 net earnings in 1968 assuming conversion 
of debentures) ........................................ . 
Retained Earnings at Beginning of Year .................... . 
Cash Dividends Paid ..................................... . 
Retained Earnings at End of Year (Note 2) .................. . 
operations were suspended from July 29 to August 16, 1969 becau se of a strike. 
See accompanying notes to financi al statements 
1969* 
$220,529,667 
11,969,392 
4,502,928 
3,349,801 
240,351,788 
62,799,486 
36,954,934 
24,918,332 
47,384,866 
45,874,267 
34,820,805 
252,752,690 
(12,400,902) 
(14,747,559) 
355,613 
(481,012) 
(27,273,860) 
(15,075,000) 
(12,198,860) 
69,820,643 
57,621,783 
2,451,634 
$ 55,170,149 
1968 
$205,753,291 
9,331,361 
4,127,583 
2,740,632 
221,952,867 
50,056,928 
30,114,796 
21,086,034 
36,943,382 
39,019,313 
25,050,993 
202,271,446 
19,681,421 
(6,535,940) 
342,937 
(327,648) 
13,160,770 
4,725,000 
8,435,770 
66,278,417 
74,714,187 
4,893,544 
$ 69,820,643 
 Statement of Source and Application of Funds 
Western Air Lines Inc. 
For the year ended December 31, 1969 with comparative figures for 1968 
Funds Provided: 
Net earnings (loss) . .. ........ . ........ . ....... . .... . ..... . 
Add back 
Depreciation, amortization and maintenance reserve provision 
Deferred income taxes . . ........ . ............. . ...... . 
Charge (credit) related to investment credits .. . .. . . ... . ... . 
Amortization of investment credits .. .. . . .. . .. .... .. .. .. . . 
Loss (gain) on dispositions of property ... . .............. . 
Total from operations . .......... . ... . . .. . ... . ...... . 
Sale of 5 % convertible subord inated debentures ........... . . 
Increase in other long-term debt . . . . ........ . . . . .... . ... . .. . 
Refunds of equipment purchase deposits ... . . . ...... .. .. .. .. . 
Proceeds from disposition of property ..... . . . ... . . . . ... . .. . . . 
Exercise of stock options ...... . . . .. .. . . ....... . .. . .. . .... . 
Total . . . .... .. . . ........... .. .. . . . ............... . 
Funds Applied: 
Purchase of airplanes, property and equipment ...... ... . . .... . 
Reduction of long-term debt . . ............ . .. . ............. . 
Payment of cash dividends ................. . ............ . . . 
Boeing 737 and 727 preoperating costs ... . ............. . .. . . . 
Other items ...... ... ... . .................. . ............ . 
Increase (decrease) in working capital . ..................... . 
Total ........... . ............. . .. . .. . .. . ... . ... . . . 
*Operations were suspended from July 29 to Augu st 16, 1969 because of a strike. 
1969* 
$ (12,198,860) 
37,692,055 
7,000,000 
(6,350,000) 
(2,150,000) 
(25,550) 
23,967,645 
29,706,000 
4,625,993 
2,909,046 
61 ,208,684 
46,196,539 
16,195,627 
2,451,634 
1,483,430 
198,337 
66,525,567 
(5,316,883) 
$ 61 ,208,684 
$ 
1968 
8,435,770 
26,239,220 
2,182,000 
1,705,000 
(2,173,000) 
73,462 
36,462,452 
30,000,000 
75,300,000 
452,796 
39,996 
142,255,244 
128,421 ,282 
1,502,627 
4,893,544 
1,000,460 
817,072 
136,634,985 
5,620,259 
$142,255,244 
 Notes to Financial Statements 
Note 1. Taxes on Income. The 1969 net income tax credit is summarized as 
follows: 
Income taxes refundable ................ . . .... .......... ... . $(13,575,000) 
Provision for deferred income taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . 7,000,000 
Credit equivalent to the reductions of investment credits 
previously applied to tax returns ... . ....... ................. ( 6,350,000) 
(12,925,000) 
Amortization of investment credits . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,150,000 
Net income tax credit ................................... $(15,075,000) 
Deferred income taxes arise from timing differences between financial and tax 
reporting. These differences are caused primarily by depreciation practices. 
Investment credits offset against the balance of deferred federal taxes on 
income at December 31, 1969 for application on future tax returns amounted to 
$17,921,000-$9,425,000 in 1969 and $8,496,000 in 1968. Of these credits, $907,000 
expires in 1972; $2,059,000, in 1973; $2,608,000, in 1974; $9,226,000 in 1975; and 
$3,121,000, in 1976. 
Of the $16,060,000 unamortized investment credit balance at December 31, 1969, 
$2,066,000 remains from investment credits utilized by reduction of taxes paid and 
$13,994,000 is related to investment credits not yet utilized for reduction of taxes 
paid. 
Federal income tax returns have been examined by the U.S. Treasury Depart- 
ment through 1967. 
Note 2. Long-term Debt {Unsecured). On December 31, 1969, long-term debt was 
as follows: 
Promissory note (authorized $110,006,000) due December 31, 
1975, with quarterly payments commencing on March 31, 1970. 
The interest rate (currently 8 %) is  % over the bank's 
prime commercial rate ..................................... $110,006,000 
5 % promissory notes (authorized $30,000,000) due September 
1, 1981 with annual payments of $1,000,000 starting September 
1, 1970 and increasing to $4,000,000 a year in 1976 . . . . . . . . . . . . 30,000,000 
65/e % promissory notes (authorized $40,000,000) due September 
1, 1984 with annual payments of $1,000,000 starting September 
1, 1970, increasing to $2,000,000 a year in 1975 and further 
increasing to $7,000,000 a year starting in 1982 .............. . 
5% to 6 % promissory notes due 1970 and 1972 .............. . 
Less current maturities ..................................... . 
5 % convertible subordinated debentures due February 1, 1993, 
with sinking fund payments of $1,500,000 a year starting 
40,000,000 
3,686,215 
183,692,215 
16,195,627 
167,496,588 
in 1979 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29,653,000 
$197,149,588 
The following schedule shows the amount of long-term debt maturing in each of 
the five years subsequent to December 31, 1969: 
1970 ............. .. ........ . .................. $16,195,627 
1971 . . .................. ... ... ...... .......... 22,965,227 
1972 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22,143,561 
1973 ... ... ........................ . ........... 21,462,600 
1974 .......................................... 21,462,600 
Reserved for the conversion of debentures are 806,884 shares of common stock 
at $36.75 per share (subject to adjustments in certain cases.) During 1969, $79,000 
principal amount of debentures were converted into 2,145 shares of common stock. 
The difference between the debentures surrendered and the par value of the com- 
mon stock issued, which net of unabsorbed costs amounted to $75,524, was 
credited to capital in excess of par value. 
The related agreements with the bank and the insurance companies provide 
among other things (including restrictions on additional borrowings) conditions 
and requirements which operate to restrict retained earnings from which cash 
dividend distributions can be made. The indenture for the debentures also con- 
tains a requirement which operates to restrict retained earnings from which cash 
dividend distribution can be made. At December 31, 1969, the indenture operated 
to prevent any use of retained earnings for cash dividend distribution. 
Note 3. Commitments and Contingent Llablllties. The estimated minimum annual 
rentals under long-term leases of real property, with expiration dates ranging to 
1998, were approximately $2,934,000 at December 31, 1969. 
Annual rentals under a lease agreement covering six Boeing 727 aircraft are 
approximately $2,992,000 in 1970, $3,843,000 in 1971 and $4,130,000 each year 
thereafter through 1984. 
At December 31, 1969, various legal actions were pending against the City of 
Los Angeles, the company and other airlines, alleging excessive aircraft noise in 
the vicinity of Los Angeles International Airport. The company's counsel in these 
actions, which also represents most of the other airlines, is of the opinion that 
the airlines have substantial defenses to the imposition of any liability. 
On February 5, 1970, an interlocutory judgment was entered in one of the cases 
against the City of Los Angeles awarding damages aggregating $740,000 to 620 
property owners. The City has indicated its intention to appeal. 
Note 4. Retirement Plans. The company has retirement plans covering all eligible 
employees. The cost of these plans charged to operating expense in 1969 totaled 
$3,651,228. The company's actuary is of the opinion that accrued vested benefits 
do not exceed the assets of the plans. 
Note 5. Stock Options. At December 31, 1969, options were outstanding for the 
purchase of 137,500 shares of common stock by officers at an average option 
price of $26.71 per share. An additional 48,700 shares were reserved for issuance 
of future options. 
Note 6. Depreciation and Amortization. Depreciation for book purposes is com- 
puted on the straight line basis. Depreciation for 1969 amounted to $33,144,561. 
Accountants' Report 
The Board of Directors 
Western Air Lines, Inc.: 
We have examined the balance sheet of Western Air Lines, Inc. as of 
December 31, 1969 and the related statement of earnings and retained 
earnings for the year then ended. Our examination was made in accord- 
ance with generally accepted auditing standards, and accordingly in- 
cluded such tests of the accounting records and such other auditing 
procedures as we considered necessary in the circumstances. We pre- 
viously made a similar examination of the financial statements for 1968. 
In our opinion, the accompanying balance sheet and statement of earn- 
ings and retained earnings present fairly the financial position of Western 
Air Lines, Inc. at December 31, 1969 and the results of its operations for 
the year then ended, in conformity with generally accepted accounting 
principles applied on a basis consistent with that of the preceding year. 
Also, in our opinion, the accompanying statement of source and appli- 
cation of funds for the year ended December 31, 1969 presents fairly the 
information shown therein. 
Los Angeles, Calif. 
February 25, 1970 
 Board of Di rectors 
James D. Aljian 
Secretary-Treasurer, Tracy Investment Company, Las Vegas , Nevada 
Fred Benninger 
President, Tracy Investment Company, Las Vegas , Nevada, and Vice Chairman of the Board, Western Air Lines, Inc. 
Hugh W. Darling 
Darling, Hall, Rae & Gute, Attorneys-at-law, Los Angeles, California 
Terrell C. Drinkwater 
Chairman of the Board, Western Air Lines, Inc., Los Angeles, Cal ifornia 
Leo H. Dwerlkotte 
Las Vegas , Nevada 
Judge James D. Garibaldi 
Attorney at Law, Garibaldi & Lane, Los Angeles, Californ ia 
Arthur F. Kelly 
Senior Vice President-Sales, Western Air Lines, Inc., Los Angeles, California 
Peter M. Kennedy 
Sen ior Vice President, Dominick & Dominick, New York, New York 
Kirk Kerkorian 
Chairman of the Board, Tracy Investment Company, Las Vegas, Nevada 
Arthur G. Linkletter 
Linkletter Enterprises, Inc., Los Angeles , Cal ifornia 
Edwin W. Pauley 
Chairman of the Board , Pauley Petroleum, Inc., Los Angeles 
Walter M. Sharp 
President, Commun ity Bank, Huntington Park, California 
Stanley R. Shatto 
Executive Vice President-Transportation, Western Air Lines, Inc., Los Angeles 
William Singleton 
Attorney at Law, International Leisure Corporation, Las Vegas, Nevada 
J. Judson Taylor 
President, Western Air Lines, Inc., Los Angeles, California 
Vernon 0. Underwood 
President, Young's Market Company, Los Angeles , California 
Harry J. Volk 
Chairman of the Board, Union Bank, Los Angeles, California 
John S. Wiester 
Los Angeles, Cal ifornia 
Arthur G. Woodley 
Vice President-Alaska, Western Air Lines, Inc., Seattle, Washington 
Richard W. Wright 
President, Mountain States Employers Council, Inc., Denver, Colorado 
DIRECTORS EMERITI 
Dr. Donald H. McLaughlin 
Chairman of the Board, Homestake Mining Company, San Francisco, California 
John M. Wallace 
Walker Bank & Trust Company, Salt Lake City, Utah 
Alexander Warden 
Great Falls, Montana 
Sidney F. Woodbury 
President, Pine Street Company, Portland, Oregon 
 Terrell C. Drinkwater, Chairman of the Board 
Fred Benninger, Vice Chairman 
J. Judson Taylor, President and Chief Executive Officer and Director 
Stanley R. Shatto, Executive Vice President-Transportation and Director 
Arthur F. Kelly, Senior Vice President-Sales and Director 
Arthur G. Woodley, Vice President-Alaska and Director 
Charles J. J. Cox, Vice President-Finance 
Ernest T. Kaufmann, Vice President-Regulatory Affairs 
Robert 0 . Kinsey, Vice President and Assistant to the President 
Philip E. Peirce, Vice President-Administration 
Jack M. Slichter, Vice President-Government and Industry Affairs 
Gordon Pearce, Corporate Secretary and Director of Law 
Richard B. Ault, Vice President-Engineering 
Willis R. Balfour, Vice President-Agency and Interline Sales 
Harold W. Caward, Vice President-Flight Operations 
Henry M. Debutts, Vice President-Washington 
Richard P. Ensign, Vice President-lnflight Services 
Anton B. Favero, Vice President-Maintenance 
Rick 0. Hammond, Treasurer and Assistant Secretary 
Lawrence H. Lee, Vice President-Industrial Relations 
Bert D. Lynn, Vice President-Advertising and Sales Promotion 
J. P. Maginnis, Vice President-Procurement 
J. S. Neel, Jr., Vice President- Ground Services 
Gerald P. O'Grady, Vice President-Properties and Facilities 
Eugene D. Olson, Vice President-Data Processing and Systems 
Luis Pasquel, Vice President-Mexico 
Ray Silvius, Vice President-Public Relations 
Harry L. White, Vice President-Sales Administration 
Peter P. Wolf, Vice President- Communications 
Charles S. Fisher, Assistant Vice President-Flight Schedules 
Joseph M. Fogarty, Assistant Vice President-Maintenance and Overhaul 
H. S. Gray, Assistant Treasurer and Budget Director 
David E. Holt, Assistant Vice President-Agency and Tour Sales 
Roderick G. Leith, Assistant Treasurer and Controller 
S. J. Rogers, Assistant Vice President-Tariffs 
Corporate Officers 
Neil S. Stewart, Assistant Vice President-Government and Industry Affairs 
Dan A. Zaich, Assistant Vice President-Labor Relations 
 General Offices 
Western Air Lines Building, 6060 Avian Drive 
Los Angeles International Airport 
Los Angeles, California 90009 
Stock Registrars 
Bank of America National Trust & Savings Assn. 
111 West Seventh Street, Los Angeles, California 90014 
The Chase Manhattan Bank 
1 Chase Manhattan Plaza, New York, New York 10015 
Stock Transfer Agents 
Security Pacific National Bank 
124 West Fourth Street, Los Angeles, California 90014 
Chemical Bank 
20 Pine Street, New York, New York 10015 
Debenture Trustee 
The Chase Manhattan Bank 
1 Chase Manhattan Plaza, New York, New York 10015 
Stock Listings 
Listed and traded on 
New York Stock Exchange 
Pacific Coast Stock Exchange 
General Counsel 
Hugh W. Darling 
Darling , Hall, Rae & Gute 
523 West Sixth Street, Los Angel es, California 90014 
Independent Accountants 
Peat, Marwick, Mitchell & Co. 
629 South Spring Street, Los Ang eles, California 90014 
Annual Meeting 
Fourth Thursday in April