High Flier

Polar Air Cargo, built by refugees from the now-defunct Flying Tiger cargo line, this week became the third U.S. all-cargo carrier to fly the lucrative U.S.-Japan route when it launched regular service from New York to Osaka.

The Long Beach-based cargo carrier is the beneficiary of a contentious standoff between the United States and Japan over a decades-old aviation treaty. Last year, the two sides agreed to expand transpacific cargo service for carriers from both countries and to add one new U.S. carrier.

The lucrative route was previously monopolized by Federal Express--which acquired the Japan route when it purchased Flying Tiger--and United Parcel Service.

Polar Air, which does not offer the door-to-door service of FedEx or UPS, was launched in 1993. Since its start-up, the carrier’s Boeing 747 fleet has expanded from two to 16.

Ned Wallace, Polar’s chief executive and a 25-year veteran of Flying Tiger, said Japan is key to his carrier’s plans to expand in Asia, the world’s fastest-growing aviation market. In addition to New York, Polar will provide service to Los Angeles, San Francisco, Chicago and Atlanta from Osaka’s new Kansai International Airport.

Polar already added service this year to Bangkok, Thailand; New Delhi; Manila and Dubai, United Arab Emirates. The airline now serves 19 countries.

“Now with the addition of Japan, we have fairly comprehensive worldwide service, so a person in Hong Kong can ship goods anywhere in the U.S., South America, Europe, Asia and the Middle East without having to go to three or four different airlines,” Wallace said.

This summer, Polar plans to expand to six weekly flights to Japan, doubling the 1.5 million pounds of cargo it now moves through Los Angeles. At the same time, it expects to become the first to offer around-the-world cargo service, which will circle the globe in about 43 hours.

Ted Scherck, president of the Colography Group, a Georgia-based consulting firm, said that Polar and other all-cargo airlines have a competitive edge over passenger airlines in their ability to move cargo in the middle of the night.

“Aunt Mabel does not want to fly at 2 a.m.,” he said. “Passenger airlines always have a problem reconciling between the needs of their passenger constituency and cargo constituency.”

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Wallace said his company is organized to offer personalized service to freight forwarders and agents intent on getting their goods to their final destination quickly and hassle-free. Of the company’s 486 employees, nearly 200 are pilots or mechanics.

Polar’s clients include Burlington Air Express Inc., Airborne Freight Corp. and Expeditors International.

The major impediments to Polar’s expansion are airport curfews and slot restrictions, which are particularly acute in Japan, the world’s largest air freight market. Another bottleneck is Hong Kong, one of several Asian cities expanding their airports or building new ones. Hong Kong’s new airport is slated to open in the spring of 1998.

There is a downside to this Asian construction boom. Osaka’s Kansai airport, the latest major airport to be built, charges airlines a $9,000 landing fee. That compares with $1,710 a pop for Los Angeles International Airport.

Now that Wallace enjoys a position of privilege in one of the world’s most lucrative markets, he admits to having mixed emotions about U.S. efforts to pry open the U.S.-Japan aviation market to further competition.

“We’ve got something of a franchise,” he said.

Evelyn Iritani can be reached at evelyn.iritani@latimes.com or by fax at (213) 237-7837.