Sun Country admits cost-cutting is hurting customer service

Ray Nayyar flew on Sun Country Airlines back to Las Vegas after competing in the U.S. Open Racquetball tournament in Minneapolis, but three of his racquets were lost along the way.

Todd Pernsteiner was flying Sun Country to Palm Springs on Christmas Eve when a conveyor at Minneapolis-St. Paul International Airport quit working and his bag got lost. For both men, as with hundreds of other travelers over the past year, it took Sun Country days to explain what was going on.

Lost luggage is a risk when flying and happens on all airlines. But Sun Country has a customer service issue — and it knows it. "We want the customer to know we recognize this," Brian Davis, chief marketing officer for the Eagan-based airline, said in an interview.

Sun Country made many changes in 2018 — expanding its route network, reshaping its ticket and fee structure and outsourcing ground crew jobs at MSP — that eroded its ability to find lost luggage and communicate with passengers. For months, complaints grew even though data showed it was not losing or mistakenly routing luggage more than it usually did.

"We aren't losing any more bags, but we are clearly causing more frustrations," Davis said.

Nayyar called his dealings with Sun Country over his racquets a "nonstop merry-go-round" with everyone he spoke to "passing the buck." Pernsteiner said that when he finally got his bag back, he learned it had been stolen and left in the parking lot of a Bloomington hotel.

In January, Sun Country executives assembled a team of workers across departments to investigate why complaints were rising and to redesign processes to fix problems.

The airline at the time was in the midst of a streak, which began in August and lasted into February, in which it didn't cancel a single flight. Even so, it was tracking a jump in complaints from customers about delayed flights. Meanwhile, both the airline and officials at MSP were noticing longer-than-usual lines at Sun Country's check-in area in Terminal 2.

Sun Country's team quickly determined that one of its biggest and most visible cost-cutting moves last year — the decision to stop running ground operations itself and hire a third-party contractor to do it instead — had more negative effects than anticipated.

After the airline was sold in the summer of 2017 and new executives came in, Sun Country's strategy changed. To boost profitability, the airline reduced its reliance on hub-and-spoke flight operations from MSP, expanded nonstop routes in underserved leisure markets and cut costs and prices to more closely resemble ultralow cost carriers such as Spirit Airlines.

As a result, Sun Country in 2018 raised its passenger count and revenue while operating slightly fewer flights to far more places than the year before. But as it made its route system more complex and attracted more travelers, it also pushed out employees who best knew how to work around the inefficiencies of its existing operation.

Last spring, Sun Country outsourced all its ground crew jobs at MSP, first to Global Aviation Services Inc. and then to DGS, a former unit of Delta Air Lines that was once called Delta Global Services.

In the process, Sun Country lost a core group of workers in its baggage operations, who took with them the knowledge of how to resolve baggage claims smoothly. Sun Country scrambled throughout the summer, sending executives and corporate workers to the airport to sling bags and clean airplanes.

Meanwhile, Sun Country was rapidly expanding the number of routes — or city pairings — by more than double. In doing so, it limited flight frequencies on many of the new routes. Sun Country now operates in some airports just one or two days a week.

Currently, contract workers at the destination airport are the ones responsible for managing mishandled baggage claims for the first five days after being reported missing. Only after those five days is the case sent to Sun Country's headquarters. And if the local airport only gets one or two Sun Country flights a week, there's no one working on behalf of the airline and its passengers the rest of the time.

"It's embarrassing that this was an oversight," Davis said. "Of course [a once weekly flight] was going to be a problem."

Customers calling the airline's customer service number often weren't able to get answers because the case was still technically being managed by Sun Country's contracted workers at the destination airport.

Sun Country's new process, now being rolled out, moves a baggage complaint from the local airport to headquarters within 24 hours. A customer service agent at headquarters is assigned to the case and is responsible for making contact with the affected passenger within a day. That same agent will be responsible for making daily contact until the baggage issue is resolved.

Sun Country is also struggling with long lines at MSP ticket counters, which Davis said the airline partly attributes to the changeover to DGS instead of its own ground personnel. More important, however, Sun Country's check-in system is outdated and doesn't, for instance, allow passengers to use self-service kiosks as most other airlines now do.

"Right now, after the initial booking, there's nothing a customer can do on their own"such as change, cancel or use a waiver, Davis said. That puts additional pressure on the customer service call center, "so on bad weather days, pretty quickly the queues get out of hand."

Sun Country also started charging for seat assignments last year, which added 10 percent more people to the ticket-counter lines because customers who don't pay for an assignment in advance must visit an agent during check-in.

Sun Country is working toward a summer launch of its new reservation system and website. "There's definitely a sense of urgency," Davis said.

And when passengers land at MSP, wait times at baggage claim carousels are long. Davis said service firms like DGS have had trouble attracting and retaining workers, particularly for baggage handling jobs.

"Those staffing challenges are greatest when it comes to ramp staff, who have to work outside in extreme weather conditions," Davis said.

DGS recently raised the pay for ramp staff and even brought in employees from other locations in an effort to lower wait times. In the meantime, the airline lowered its carry-on bag fee to match its checked-bag fee to encourage more passengers to handle their own luggage.

Staff from Sun Country's headquarters are still taking shifts at the airport to relieve some of the pressure on the airline and its contractor DGS. But Sun Country does not plan to bring its ground crew jobs back in-house or hire additional customer service agents again. Sun Country currently employs 150 call center agents and supervisors at headquarters.

Executives hope their vision for the airline will become clear, and free of major flaws, over the coming year.

"Their complaints are justified," Davis said, "but we are asking customers to trust us with what's in the future."

Kristen Leigh Painter • 612-673-4767