New Tiger at the Top

The airline industry has soared far past the railroads in the passenger business, but so far it has been low and slow on freight. Of all cargo transported in the U.S., 43% is still carried on the rails, only 1% in the air (trucking gets 23%, shipping 15% and pipelines 18%). So it was a neat move last week when the Flying Tiger Line, the nation's biggest all-cargo airline, reached into railroading's highest corporate ranks to name Wayne M. Hoffman, 44, the No. 2 man at New York Central, as its new board chairman. In making the switch, Hoffman happily characterized Flying Tiger as a company that is "just beginning to grow."

Some beginning. Last year Flying Tiger increased its revenues by 53% to $86 million, while multiplying its profits nearly threefold to $12.1 million. What makes the record all the more impressive is the fact that the airline was founded in 1945 on an investment of $180,000 and a rickety fleet of eight Budd Conestogas. Briefly called the National Skyway Freight Corp., it took its subsequent name--and many of its top personnel--from the legendary Flying Tigers, volunteer American pilots who flew for China early in World War II. Disbanded as a unit 25 years ago last week, most of the Tigers began ferrying supplies for the China National Aviation Corp., an enterprise that inspired one of them, Robert W. Prescott, to found his own U.S. cargo line.

Elsie & Trigger. It was a good idea, but it also occurred to some 2,700 other postwar entrepreneurs--mostly returning servicemen who shared Prescott's ambition to start an airline. Undaunted by all the competition, most of which was soon to wither, Prescott sent his pilots barnstorming for business. The company hauled grapes from the West Coast to Georgia, took Elsie, the Borden Cow, from the East to a California county fair, even toted Roy Rogers' horse Trigger around the rodeo circuit. All the while, the hustling Prescott ("We would wash cars on Sunday morning if we had to") was buying up airplanes and "gambling that somehow we'd find a use for them." Not until 1949 did the company fly into the black --and it suffered losses a couple of times even after that.

With Prescott, now 54, still its president, Flying Tiger expects this year's revenue to reach a record $100 million. Nonetheless, the company's fortunes remain creased with uncertainty. For one thing, the fact that air cargo is much higher-priced than surface freight leaves it vulnerable to more severe effects of economic slowdowns. Making the business even more unpredictable is the heavy dependence on Government contracts. Flying Tiger's first big business came when it landed a six-month Government contract for hauls to Ja pan in 1946; later it profited in a major way from airlift business during the 1948-49 Berlin crisis and the Korean War. Today military airlift contracts, generated in large part by the Viet Nam war, account for nearly 60% of all Flying Tiger revenue.

In hopes of reducing its reliance on Government contracts, Flying Tiger, which has no regular overseas routes, has applied to the Civil Aeronautics Board to begin nonmilitary service to the Far East. Confident of getting the go-ahead, the company last year opened a new $4.5 million base in Los Angeles, also ordered ten of Douglas' new jumbo-size DC-8s to increase its long-haul capacity. With that expansion came the need to beef up top management.

Avocation & Vocation. Prescott is brash and flamboyant, the towering (6 ft. 6 in.) Hoffman cool and brilliant. Born in Chicago, Hoffman graduated with Phi Beta Kappa honors from the University of Illinois in 1943, returned to get a law degree after serving as an army captain in Europe (two Purple Hearts and a Silver Star) in World War II. He joined New York Central in 1952, quickly moved up the ranks to become executive vice president in 1962. At Flying Tiger, it won't hurt that he is a licensed pilot who flies his own twin-engined Aero Commander, goes so far as to call his new job a "merger of avocation and vocation." Says Prescott of his new colleague: "This guy is a brain. He's gutsy too. He wants to swing, wants to do things." The way it sounds, Hoffman should fit right in at Flying Tiger.

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