Flying Tiger Cuts Pay, Trims Work Force
Flying Tiger Line said Tuesday that 2,600 of its non-union employees will take pay cuts of up to 15% to save money for the financially troubled Los Angeles air cargo carrier.
The company, a unit of Tiger International, also said about 80 middle managers, 8% of the management work force, were laid off Tuesday as the company moved to eliminate a total of 124 positions.
A spokesman for Flying Tiger declined to say how much the airline would save as a result of the salary and staff cuts in the administrative, clerical and executive ranks, which follow agreements by Flying Tiger’s unionized workers to accept sizable wage and benefit reductions.
Its 650 pilots have agreed to 25% wage cuts and its 2,000 machinists, a group that includes those who repair and load the cargo planes, are taking 15% wage reductions. The cuts announced Tuesday will range from 5% for lower-paid workers to 15% for the highest paid, including Stephen M. Wolf, chairman and chief executive of Flying Tiger.
Wolf called the wage reductions a “crucial first step” in returning the company to profitability. He said Flying Tiger will now concentrate on restructuring about $300 million of its $525-million long-term debt and on improving its service.
Wolf, who joined Flying Tiger in August after turning around money-losing Republic Airlines, said previously that Flying Tiger would be forced to close unless the massive wage and benefit concessions were obtained by the end of the year.
Bid to Trim Losses
The cost-saving measures are part of an effort to trim losses at Flying Tiger, which has lost an average of $74,600 a day since 1981.
Last year, it lost $44.2 million on revenue of $1.1 billion.
Tiger International’s stock closed Tuesday at $9.125 a share, down 12.5 cents in trading on the New York Stock Exchange.
Besides the salary cuts, Flying Tiger said it will no longer supply company cars for most management employees. Also, the length of non-union workers’ vacations is being reduced 20%.
At the same time, the company announced several management changes. It said James A. Cronin, senior vice president for domestic marketing, will now oversee the airline’s entire marketing effort. Edwin H. Wallace, senior vice president for sales and service in the Pacific market, will now supervise all the airline’s international sales and service programs, Flying Tiger said.
