Dirty Little Air War

Bully! Crybaby! Northwest and Sun Country brawl for control of the sandbox--and billions in local air-travel revenues

The La Macchias took a deep breath, bought out Barry's remaining shares, and started fixing. They tricked out Sun Country's planes with new fixtures and upholstery, removed seats to eliminate the cattle-car feeling, even shelled out to have the air vents cleaned so the planes would smell new. Soon the refurbished jets were beginning to fly a fixed schedule on some of Northwest's most popular routes, including Los Angeles, Seattle, San Francisco, Phoenix, New York, and Washington, D.C.

And then fate handed Sun Country a big break. In August 1998 the Northwest pilots' strike practically shut down the Minneapolis-St. Paul airport. Resentment against the airline skyrocketed as passengers struggled to get out of town; soon even business travelers, notorious for their loyalty to frequent-flyer accounts, found themselves wedged onto Sun Country's planes. Sun Country spokeswoman Tammy Lee says the airline kept fielding inquiries about rumors that the charter operation was about to become a scheduled carrier.

The gossipmongers turned out to be right. In January of this year--four months after the Northwest strike ended--La Macchia announced that while the airline would continue to provide seasonal vacation charters, by June Sun Country would also offer scheduled service to ten U.S. cities. Within weeks Sun Country unveiled the first of a series of promotions playing on its underdog status: Newspaper readers were treated to ads depicting a Pez dispenser topped by the younger La Macchia's head, inviting them to mail in coupons for a chance to win a year's worth of free airfare. "Honk if you want another airline," one Sun Country billboard suggested, while another simply read, "You're Welcome."

Shortly after Sun Country's announcement, Northwest quietly slashed its prices on many flights in markets where it would now be competing with the upstart. In many cases, ticket prices dropped to half or a third of what they had been previously. Northwest also beefed up service to most of the destinations served by both carriers--adding flights to Orlando, doubling the number of seats to Anchorage, and boosting the number of passengers it could ferry to Phoenix and Los Angeles. Meanwhile, even more cheap seats were becoming available on Champion Airlines--the charter carrier Northwest partially owns--and MLT, the airline's discount tour operator.

So far, it was standard air-war fare, the kind of technique big airlines describe as healthy competition and which critics--including some federal regulators--often call "predatory pricing." But Northwest's combat tactics didn't stop at the ticket counter. The airline, according to those who have watched the conflict unfold, mustered its considerable resources to identify myriad ways of making it difficult for Sun Country to keep the planes in the air.

 

Hidden from public view behind Dave DiSalvo's perfectly aligned stanchions, beyond the new carpeting, snazzy purple seats, and bright lights at the Humphrey terminal, things take a decided turn for the subterranean. The wattage doesn't drop quite enough to mask the fact that pretty much everything is dingy. The floors are too yellow to ever truly shine again. So many people trying to share each cubicle and desk that the technical manuals and books of federal regulations threaten to bury hapless workers in paper avalanches. The bean counters are frequently forced to take over DiSalvo's Yugo-size office.

While quarters are uniquely cramped at Humphrey--a former United Airlines cargo hangar--crowding is a familiar problem at airports throughout the nation. One of the peculiarities of the airline industry is that most large cities have outgrown their airports but few are going to get new ones; as a result tenants are expected to work, play, and share space like neighbors, not like bitter rivals.

Airlines routinely hire one another to do everything from unloading baggage to collecting boarding passes from passengers; they also swap parts, use the same vendors, and help each other meet the complex array of federally mandated inspections. The network of "over-the-ramp friendships," as one aviation consultant puts it, is particularly tight between Sun Country and Northwest; the two airlines have historically shared everything from gas tanks to engine stands, and they often recruit from each other's ranks.

As Sun Country's vice president for airport affairs, Dale Kariya has long relied on those cooperative arrangements in cities dominated by the major airlines. But over the past year, Kariya says, he noticed Northwest systematically cutting off Sun Country contracts, even as it left other competitors alone.

In October of last year, Northwest announced that it would no longer sell ground-handling services--baggage handling, plane cleaning, and the like--to Sun Country in Los Angeles and Boston. Kariya accepted Northwest's explanation that the outside contracts were hampering Northwest's own performance. But then, a week later, he got a letter from the management company that runs the airport's Terminal 2, home to Sun Country's lone gate. Sun Country, it said, had 30 days to vacate the building.

The decision came as a surprise. Just a few weeks earlier, Kariya says, the management firm had finally granted Sun Country permission to put up permanent signs on its ticket counters. When he asked what had prompted the change, he was told it was "for business reasons." But, he notes, other tenants with less seniority were left alone, and for at least two months Sun Country's former gate stood empty.

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