Cost-Cutting Decision Backfires, Leads Sun Country to File Suit
Minnesota-based Sun Country Airlines is suing the airport services firm it hired back in February 2018 for breach of contract and fraud, among other allegations. This services firm, Global Aviation Services Inc., which is based in Toronto, took on the responsibility of handling baggage, towing and cleaning the interiors of airplanes, and checking in passengers at the Minneapolis-St. Paul International Airport. Sun Country’s new executives decided to hire Global to save on costs by outsourcing the work of approximately 350 individuals.
The lawsuit, filed on March 25, 2019, alleges that Global breached its contract by failing to do the required work to get “flights, passengers and cargo through the system in a timely manner.” Further, Sun Country states that as soon as the agreement was signed, Global failed to provide the necessary staffing to perform its obligations and help the airline run efficiently. In one instance, 26 ramp employees should have been scheduled to work, but Global scheduled 9 employees—2 of whom did not show up. In another instance, 24 employees were needed on the ramp while only 8 were scheduled. On that same day, no one showed up to work in the baggage room.
By the end of June, Global notified Sun Country that it could not perform its obligations, giving Sun Country a three month notice that it would be terminating their agreement. Sun Country states that this abysmal performance of Global led to longer wait times at ticket counters (wait times exceeding an hour and a half, rather than the previous average of about twenty minutes), flight delays, a rise in customer complaints with the Better Business Bureau, and an overall damage to its reputation. Time will only tell if Sun Country is able to bounce back from the financial and reputational damage caused by a cost-cutting decision.