EGL TO CUT 400 JOBS, OUTSOURCE CHARTER NETWORK AFTER 1ST-QUARTER LOSS

EGL TO CUT 400 JOBS, OUTSOURCE CHARTER NETWORK AFTER 1ST-QUARTER LOSS    EGL Inc., which operates under the name EGL Eagle Global Logistics, said it will outsource its dedicated air charter network and cut about 400 jobs, in the wake of a first-quarter loss.
   EGL reported a net loss of $9.1 million, compared to net income of $8.5 million for the first quarter of 2000. the recent quarter results included $4.7-million in after-tax merger-related charges. Revenue rose 4 percent to $422 million.
   'Weak freight volumes, particularly in the United States, had a negative impact on EGL's first-quarter results,' said James R. Crane, chairman and chief executive officer. The drop in North American activity was due partly to a shift from air    expedited shipments and toward ground deferred shipments, which generate lower revenues but carry a similar cost structure, he added.
   The results also reflected significant reductions in volumes from EGL's core client base of technology and automotive industries, Crane said.
   EGL has reached an agreement with an Kitty Hawk Inc., an air-freight operator based in Fort Wayne Ind., to outsource the majority of its dedicated leased planes in the United States in the second quarter, Crane said. The balance of the aircraft will be outsourced by the end of the year.
   Under terms of the agreement, EGL will augment cargo volume on Kitty Hawk's overnight freight system. Kitty Hawk will use some of EGL's former dedicated charter aircraft.
   The move marks a shift toward a variable freight forwarding cost model. 'Our strategy is to take adequate positions in certain trade lanes to continue to service our customers,' Crane said.
   EGL has also targeted $30 million in planned cuts, including reducing its work force by 15 percent or 400 full-time employees, which will generate savings of $20 million. The majority of the cuts will be made in the United States. The Houston-based company said the cuts are in addition to 450 full-time and contract employees that were released in the first quarter.
   The company will consolidate 18 field offices in the second and third quarters. Twenty-two offices have already been consolidated.