Sun Country’s Shift to Low-Cost Carrier Model Will Include More Fees
In a memo to Sun Country Airlines staff on Tuesday, new CEO Jude Bricker laid down a turnaround plan for the discount carrier that would shift its business closer to the no-frills model used by Frontier and Spirit airlines, which charge for carry-ons and favor putting more seats on planes to increase revenue but shrink legroom space for passengers.
Bricker, who took over in mid-July, felt the Eagan-based company needed to cut costs to stay competitive, according to his memo, which was obtained by the Star Tribune.
One of those cuts, he suggested, could come from payroll. Buyouts were offered to flight attendants and nonunion full-time employees with more than a decade of experience, which they could take if they were “not on board with the new vision,” the memo said.
Pilots, however, were not given the buyout option, likely due to the pilot shortage that is affecting airlines industry-wide.
Passengers looking to park a bag in an overhead bin will also be charged extra, Bricker said. By doing so — and placing fees on other services, like in-flight drinks — Sun Country would be able to drop its airfare rate, making it more competitive with ultralow cost carriers, while allowing customers to pay for the amenities they want.
Bricker did not detail a timeline for his plan in the memo. He did, however, say the company’s future would include an expansion beyond its hub at the Minneapolis-St. Paul International Airport.
Sun County currently faces strict competition against Delta, United and other legacy airlines, which keep customers through incentives like frequent-flier programs. By entering new markets at a lower airfare cost, Bricker believes Sun Country can bring in more business.
Bricker holds experience at in the airline industry with carriers operating at upper and lower level price points. His career began in 2004 at American Airlines before he joined Las Vegas-based discount carrier Allegiant Air.
Sun Country owner Marty Davis picked Bricker for the job after forcing the previous CEO Zarir Erani to step down. Erani, who entered the job with no airline industry experience, struggled to turn around the company’s operating revenue and passenger count, both of which shrank under his tenure.
With Bricker’s vision in place, Davis told the Star Tribune that Sun Country wouldn’t be downsizing or taking on the feel of ultralow carriers like Frontier. “We don’t want to nickel and dime customers,” he said. “We want to stabilize it for long-term growth by finding the right rhythm between our pricing and customer service. Jude very much recognizes the value that exists at Sun Country and we aren’t going to change that.”
TCB profiled Sun Country’s peculiar position in the airline industry in our November 2014 issue.