Flying Tiger Line, which recently fired 8% of its managers to reduce costs, said Monday it is adding six cargo planes to its fleet and hiring 150 pilots in a move to expand its service.
Flying Tiger, a subsidiary of Los Angeles-based Tiger International, said it will lease six used DC-8 cargo jets from Guinness Peat Aviation, an airline broker based in Shannon, Ireland. The air cargo carrier said it is recalling 85 pilots who had been furloughed and is hiring 65 more pilots as a result of the fleet expansion.
Lawrence Nagin, Flying Tiger's general counsel, said the planes are being leased for five years and that Flying Tiger has an option to purchase them when the lease expires. He declined to say how much Flying Tiger is paying for the jets under the lease.
Michael Cuppola, vice chairman of Flying Tiger's pilots union, said the pilots are pleased that the air cargo carrier is hiring so many pilots, since only 90 are needed to staff the new cargo jets. "We've had a pilot shortage here and they seem to be taking steps to solve the problem," said Cuppola, who added that pilots were asked to fly longer hours during the last six months of 1986 to handle an increase in cargo business.
Flying Tiger's employees recently agreed to wage and benefit concessions worth more than $50 million a year to stem losses that have averaged $74,600 a day since 1981. Stephen M. Wolf, chairman of Flying Tiger, said the concessions are part of a plan to revitalize the air cargo carrier. He said previously that the plan includes refinancing $300 million of the airline's $525-million long-term debt and expanding its service.
Flying Tiger was known to be interested in the six four-engine DC-8s, which were formerly owned by San Francisco-based Transamerica Airlines. Transamerica discontinued its air cargo operations last September to concentrate on its insurance business.
Wolf, who became Flying Tiger chairman in August, said the addition of the mid-sized DC-8s will "provide a better match-up of market demand and capacity."
The addition of the DC-8s represents a strategic reversal for Flying Tiger, which disposed of its fleet of 19 DC-8s several years ago and acquired shorter-range 727 tri-jets for use on its domestic routes. Flying Tiger uses 747 jumbo jets on its international routes.
Analysts who follow Flying Tiger say the mid-size DC-8s fill an important gap in the carrier's fleet. Flying Tiger was not able to compete for some overseas business because it did not have a plane that could efficiently carry medium-sized loads over long distances, analysts said.
"They've come full circle," said John V. Pincavage, an air cargo analyst with the Paine Webber investment firm in New York. He said he expects Flying Tiger to use the DC-8s on "the thinner international routes where they can't quite fill a 747." Flying Tiger was unable to substitute 727s on those routes because they cannot fly overseas without refueling.
Flying Tiger said it would also use the DC-8, which has a capacity of 100,000 pounds--about three times that of the 727--on its heavier-load domestic routes.
Flying Tiger said it would receive the first DC-8 on Jan. 20 and the rest before the end of March. The airline said that until its pilots complete 11 months of training to fly the DC-8s, the airline will hire substitute pilots.