Sun Country Airlines is shedding 350 workers from its ground service operations at Minneapolis-St. Paul International Airport, a move executives said will make the airline more efficient.
The Eagan-based company told employees Tuesday that it will contract out those nonunion jobs to Global Aviation Services LLC, in a layoff and rehiring process that will run from now until May 1.
The decision will carve off nearly 20 percent of Sun Country’s workforce of about 1,830. Layoffs begin immediately, with workers given “preferable access” to reapply for positions with Global Aviation as soon as Wednesday, Sun Country said.
Workers affected include positions inside the terminal, such as ticket counter agents, sky caps and those who provide wheelchair services. It also covers gate activities and “below-wing” ground workers, including workers who handle mail, cargo and de-icing.
“We want to concentrate on flying airplanes and selling tickets,” Sun Country President and CEO Jude Bricker said in an interview. “That doesn’t mean we change our view on customer service. It doesn’t. It just means that we want to bring in a company that specializes specifically on ground operations to run our Minneapolis ground operations.”
Since the 1980s, many airlines have offloaded low-wage jobs, such as the cleaning crew, to third parties while holding on to the aircraft crew and maintenance workers that are deemed essential to the flying experience.
For Sun Country, the move comes just months after the airline was purchased by a New York investment firm, while Bricker, with less than a year at the helm, works to improve the carrier’s financial performance.
“Sun Country eliminates a relatively small group of employees who are probably paid more in direct compensation and benefits,” said Robert Mann, a former airline executive and consultant based in Port Washington, N.Y. “For [the airline] it represents a savings. But there’s a long-term question about how it affects their brand and how customers view them in the marketplace.”
Turnover is high in the ground-handling work, Mann noted, “especially in winter where it’s no fun to work the ramp at 5 below and 30-mile-per-hour winds.”
“The irony is that some will go back to work at substantially lower compensation with fewer benefits,” he said. “That’s the tragedy there.”
Global Aviation Services, formed in 2009, has about 1,500 employees and works with dozens of airlines, including Delta, United, KLM and Air France. With headquarters in Toronto, it is in the process of moving its U.S.-based operations to Tampa.
The company entered the U.S. market in 2015. Until now, those operations have been limited to Fort Myers, Fla. and Tampa, Fla. — where it already handles Sun Country’s ground operations — as well as Orlando. In March it will expand to Dulles International Airport near Washington, D.C.
Bringing on Sun Country’s workforce will double Global Aviation’s growing footprint in the United States, said Jim Murphy, the company’s U.S.-based chief operating officer.
Global Aviation also will take over Sun Country’s bag handling and airplane cleaning services, which currently is handed by another provider, Swissport International Ltd.
Sun Country workers will be offered a “stay bonus” to continue with the airline through the transition. Those who are able to land a job with the new company will maintain their flight perks, such as free travel. But they will lose seniority and likely other employee benefits in the process.
“We want to be sensitive to the transition they’re going through,” Global Aviation’s Murphy said. “It’s not their fault; it’s a business decision. We want to welcome them in and make them part of our family.”
Sun Country was sold to Apollo Global Management, one of the nation’s most prominent private equity firms, in December for an undisclosed sum. The transaction, subject to approval by the U.S. Department of Transportation, is expected to close next month.
The airline is profitable but a subpar performer among other low-cost carriers. Bricker was hired in July 2017 with marching orders to improve results.
The company earned $5 million on $136 million in revenue during the third quarter of 2017, according to the most recent federal filings. The airline had reported a loss of $6 million on $117 million in sales during the same period in 2016.
Bricker declined to say how much the decision to contract with Global Aviation will save the company. But he said hiring a third-party vendor is a way to quickly lower costs.
“We’re growing our network. We’re growing our operations here in Minneapolis,” Bricker said. “The more efficient we can get with our operations, the more we can justify investment in growth, offering new markets and new travel destinations.”
Sun Country, which launched in 1983 by former Twin Cities-based pilots and flight attendants, serves 41 airports in the U.S., Mexico, the Caribbean and Costa Rica.