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Sun Country's Arrival Has Lowered Prices for Twin Cities Travelers
By Mark Zdechlik
July 25, 2000
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The number of options for people flying in and out of the Twin Cities has increased dramatically over the past year. Minnesota-based Northwest Airlines still dominates the market, but several low fare carriers are now operating out of the Twin Cities airport, most notably Sun Country Airlines. U.S. Department of Transportation statics show air fares to markets where competition has taken hold have dropped significantly.

The Future of NWA
For more stories and background about Northwest Airlines and its potential merger with another airline, visit MPR's online Future of NWA special section.
SOME OF THE EXAMPLES are dramatic. The average air fare from Minneapolis to Milwaukee has dropped 55 percent from the fourth quarter of 1998 to the same time in 1999. Minneapolis to San Antonio is down 29 percent. Fares to Seattle and Boston are down 20 percent. Those are four of the 12 routes where Sun Country airlines has been offering daily flights over the past year.

Low-fare carriers Vanguard and Frontier have been in the Twin Cities for the past five years, but with relatively limited service. Travel Analyst Terry Trippler of says Sun Country's effort has been a much more serious challenge to Northwest.

"Northwest has a reputation for a tough tough competitor and Sun Country has taken them on lock, stock and barrel and has succeeded. And that has signaled other low fare carriers that you can compete with Northwest and we have seen our airport suddenly open up," Trippler said.

In the last two months, two additional low fare carriers - Airtran and American Trans Air - have begun scheduled service from Minneapolis.

3M is one of Minnesota's largest employers. It has operations all over the world and an annual travel budget of $70 million - most of it spent on trips in and out of the Minneapolis-St. Paul International Airport. The company's Manager of Administrative Services, Arlene Englert, says 3M has seen changes since Sun Country rolled out scheduled service.

"One of the main locations is Detroit. We have a heavy travel in and out of Detroit and it's one area that the costs are very high."

Englert says when Sun Country launched regular service to Detroit, 3M began building a relationship with the low fare airline, which lead to two daily flights between the two cities. According to Department of Transportation numbers, the cost of flying to Detroit dropped 30 percent from the fourth quarter of 1998 to 1999. Englert says not only are Sun County's fares lower, they've also forced down Northwest's prices. Englert says 3M's encouraging employees to use low fare airlines like Sun Country whenever possible.

"That has definitely lowered our costs. We almost see a trend going back to Northwest Airlines, as long a the fare is the same, which is always a little scary to us from the travel management side because if we don't support the new carrier then they are going to leave and the fares are going to shoot back up and that's a given," Englert said.

"We're committed to this place and I don't think that you would see us making decisions that we are making if we didn't believe this was the right thing. We're behind the eight-ball right now but we're investing."

- Bill La Macchia, CEO Sun Country Airlines
Sun Country also offers twice daily to New York and Milwaukee, the home of its parent company Mark Travel Corporation. CEO Bill La Macchia says the airline plans to continue regular service in out of the Twin Cities despite losses of $25 million dollars during the first year.

"We're committed to this place and I don't think that you would see us making decisions that we are making if we didn't believe this was the right thing. We're behind the eight-ball right now but we're investing."

La Macchia says he hopes to add more daily flights to other areas of the country and that Sun County will be in a better position to do that next year when it begins taking delivery of the first of several new aircraft on order.

Sun Country is taking credit for bringing down air fares to several markets, but the low fare carrier says some of the same statistics consumers are celebrating are evidence of anti-competitive behavior on the part of Northwest Airlines. Sun Country says Northwest is unfairly flooding certain destinations with low fares in an effort to drive away competition. Northwest declined to comment on the allegations. In the past the airline has repeatedly defended it response to competition as agressive but legal.

Sun Country officials will try to make their case next week at a meeting with federal regulators.