Biggest Checks for $10,288 : Flying Tiger Line Follows Pay Cuts With Profit Sharing

Flying Tiger Line employees, who took sizable wage cuts a year ago to save the struggling air cargo carrier, received large profit-sharing checks Friday.

The Los Angeles-based airline distributed more than $16 million to employees in amounts ranging from $1,734 for lower-paid clerical workers to $10,228 for the highest-paid pilots. On average, the airline’s 5,187 full-time employees received $3,097.

The profit-sharing checks were the first distributed under a program created in November, 1986, when unionized workers agreed to substantial wage and benefit cuts to save the airline about $55 million a year.

At the time, Flying Tiger had been losing an average of $76,400 a day since 1981. In 1987, the airline reported a pretax profit of $106.6 million, largely the result of the employees’ concessions.

The airline’s pilots took the largest wage cuts, giving up one-quarter of their pay. On Friday, the head of Flying Tiger’s pilots’ union was unenthusiastic about the profit-sharing checks.

“I took a $60,000 pay cut and got $6,000 in profit sharing. That’s 10 cents on the dollar,” pilot Frank Maguire said.

He added that morale among pilots remains poor. “We’ve joked about pooling our profit sharing into a legal defense fund,” he said.

Elsewhere at the company, employees appeared to welcome the profit-sharing checks. A hand-painted poster in the lobby of the company’s headquarters said, “I love you, profit sharing.”

Since employees who earned less than $20,000 did not take wage cuts, their checks represented a sort of bonus. And in most cases, the profit-sharing checks were large enough to restore the money lost through wage cuts for workers who earned less than $30,000.

The checks were distributed along with thank-you letters from James Cronin, Flying Tiger president. “This pay-back is tangible evidence that the dedication and hard work of our employees has paid off,” Cronin said.

Besides the profit-sharing checks, workers also received warrants allowing them collectively to buy 3% of Flying Tiger’s shares, most of which is held by the airline’s parent company, Tiger International. Three years from now, the warrants can be converted into stock for $1 a share.

Cronin became the airline’s president last December, succeeding Stephen M. Wolf, who left to head Allegis Corp., parent of United Airlines. Wolf, who was also Tiger’s chairman and chief executive, negotiated the pay cuts and put the profit-sharing plan in place.

When he left, the company’s board formed a committee, headed by its largest shareholder, investor Saul P. Steinberg, to select a new chairman and chief executive for Flying Tiger and its parent company. On Friday, a spokesman for Steinberg said the search is continuing.

The spokesman declined to comment on Wall Street speculation that Steinberg is looking for a buyer for his nearly 20% stake in Tiger International.