Dirty Little Air War

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

Officials could also push the MAC to seek more competition, the attorney general continues. "We could say that MAC ought to act as a regulator. It has an obligation to act on behalf of the public in attracting competition."

But for now Hatch's office has chosen a fourth avenue: asking the U.S. Department of Transportation to investigate Northwest Airlines for possible predatory pricing, and signaling to the Justice Department that the attorney general is concerned about antitrust issues. Hatch's complaint to the DoT, filed last spring, featured several pages prepared by Hobbit Travel owner Wozniak, showing Northwest prices on Sun Country routes and comparing them to those of a year ago.

In a 20-page response to Hatch's request, Northwest contended that he and Wozniak had chosen exaggerated examples. True, the airline admitted, it had lowered fares and added capacity on many routes served by Sun Country. But it had done so because there was demand for more air service in those markets. And it had never "undercut any fare offered by Sun Country in any market."

Brian Stauffer

Northwest also refuted Hatch's suggestion that it is using its charter wholesaler, MLT, to steer traffic away from Sun Country: On the contrary, Sun Country was threatening to overwhelm MLT. "MLT and Sun Country are now in competition with each other for the charter customers they formerly served in common," Northwest argued. "In this competition it is Sun Country, not MLT, that enjoys a significant competitive advantage due to the fact that Sun Country is now owned by the Mark Travel Corporation, one of the largest tour operators in the United States."

The DoT has not said whether it will pursue Hatch's request for an investigation. But it's clear that the pencil-pushers will need a while to sift through the soup of numbers: Both Hatch's and Northwest's documents about the issue bear thick attachments comparing fares, available seats, and departure times, along with enough fine print to confound even the most zealous auditor.

And in Northwest's view, none of those details should be sorted out in Washington. The battle belongs in the marketplace, the airline insists, adding that Sun Country has a lot of changes to make if it wants to win there.

"The real question that should be asked is not whether Northwest has been unfair to Sun Country by curtailing these support services," the company's recent memo suggests, "but whether Sun Country has taken the steps it needs to take, and made the investments it needs to make, to establish the operational infrastructure to support a scheduled airline....

"It appears that Sun Country has elected to go cheap--to scrimp on the basic investments necessary to support scheduled airline service, choosing instead to try to rely on Northwest, its chief competitor, as its primary supplier of spare parts....This is not the way a scheduled airline takes care of its business."

Chances are consumers will hear plenty more bellyaching from both airlines. Industry analysts say it may take three years to find out whether the market will support Sun Country. And plenty of travel insiders are willing to bet Sun Country won't be around by the time the new Humphrey terminal opens.

But there are others--including Hatch--who say that given a fair fight, the former charter carrier might turn out to be the Southwest of the Midwest. It has been argued that in this market, a low-fare carrier could generate enough business to turn a tidy profit simply by selling tickets to people who wouldn't fly but for its discount fares.

La Macchia, however, isn't talking like a man who's willing to settle for half a loaf. "We're not in the transportation business," he proclaims. "We're in the service business. Travel is no longer just for certain classes of people. Travel is now a right, and ultimately you have to know the value of that.

"We want to get a customer one time," he adds. "If we get them one time, we'll get them back."

But La Macchia is probably also familiar with an old travel-biz adage: The best way to become a millionaire, it goes, is to start out as a billionaire and buy an airline. And so he has been hustling to get those customers now--before the Twin Cities' honeymoon with the new kid on the block ends.

Two weeks ago Sun Country staffers swathed one of their hangars in black-and-white balloons and other party trappings and invited members of the Twin Cities business community to spend the evening listening to Minneapolis's Brave New Workshop improvise comedy routines with aviation themes. There was a pitch, of course, but it was simple: If the businesspeople agreed to make Sun Country their preferred airline, the carrier would negotiate one fare to be paid by all of their employees, regardless of when or where they traveled.

The evening ended with a raffle for a trip for two to Las Vegas, complete with hotel room and show tickets. La Macchia drew even more laughs than the improv troupe when he volunteered to go to the winner's house and--in a reference to Sun Country's offbeat TV advertising campaign--take out her garbage.

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