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Sun Country Airlines

 
Company History: Sun Country Airlines

Type: Private Company
Address: 2520 Pilot Knob Road, Suite 250, Mendota Heights, Minnesota 55120, U.S.A.
Telephone: (651) 681-3900
Toll Free: 800-FLY-N-SUN; (800) 359-6786
Fax: (651) 681-3970
Web: http://www.suncountry.com
Employees: 1,200
Sales: $250 million (1998 est.)
Incorporated: 1982
NAIC: 481111 Scheduled Passenger Air Transportation
SIC: 4512 Air Transportation - Scheduled

Sun Country Airlines, operated solely as a vacation charter service for most of its history, became a scheduled carrier on June 1, 1999, offering nonstop flights to and from Minneapolis/St. Paul, Milwaukee, and Detroit to major U.S. cities and international destinations. The company, owned by Milwaukee-based leisure travel mogul William E. La Macchia, Sr., competes head-to-head with industry giant Northwest Airlines, while it continues to operate some charter flights in conjunction with wholesale tour operators.

Sun Country Airlines, the brainchild of former Braniff International pilots, took flight in January 1983. Following the shutdown of Braniff in 1982, Ken Sundmark sought out Bob Daniels, his former neighbor and cofounder of Mainline Travel Inc. Sundmark proposed they establish a charter service, combining the assets of Mainline and the airline expertise of the now unemployed Braniff crew. "They needed outside financing, and they also needed a reliable market, something more steady than the topsy-turvy world of post-deregulation scheduled services," wrote Peter Reed in a February 1987 Corporate Report Minnesota article.

Mainline, which owned MLT Vacations Inc., had already toyed with the idea of owning its own plane to serve its vacation travel market and willingly signed on for the ride. Mainline's principle owners, Daniels and MLT CEO Warren Phillips, retained 51 percent of ownership. Eleven Braniff pilots, two cabin attendants, an attorney, and a financial consultant shared the remaining 49 percent.

Sun Country Airlines was incorporated in July 1982 but implementation of service was delayed by higher than expected start-up costs. Airport facilities, fuel suppliers, maintenance contractors, and airplane lessors all required large deposits on their goods and services. MLT committed additional funds, in the form of a letter of credit for the deposit on the airplane and a cash loan of $250,000, to get Sun Country's inaugural flight from Sioux Falls to Las Vegas, in the air. At first, Sun Country flew just one aircraft, a Boeing 727-200.

The company quickly became profitable, within six weeks according to the Reed article, and was able to pay back MLT's loan within eight months. Net income was $180,413 for the first fiscal year and $1.47 million for fiscal 1984. Headquarters were less than glamorous. Sun Country operated out of an old freight building. That space and the rented hanger had once been Braniff's--the defunct airline frequently housed planes overnight at Twin Cities International, then flew them out as charters.

During the early days and from the top on down, Sun Country employees had multiple roles to perform. Company executives flew aircraft. Flight attendants acted as receptionists and baggage handlers in a pinch. Pilots updated manuals and even pitched in to clean the company's aircraft.

In addition to sharing the workload, Sun Country's employees shared the knowledge that they were responsible for the financial health of the business--the fate of Braniff and other airlines was still fresh in their minds. Sundmark, Sun Country vice-president of finance, gained his financial know-how while serving as a representative of the Air Line Pilots Association. Peter Reed wrote, "Sundmark's formula for Sun country's success is simple: 'Cost control, cost control, cost control."'

To survive, Sun County and every other airline had to keep its seat per mile cost down. The seat-mile measurement was tied to a number of factors. Key among them was the number of seats being filled. During the first three-and-a-half years of operation Sun Country's average load exceeded 90 percent, thanks to MLT. The travel company purchased seats from Sun Country, packaged the air travel with hotel and a variety of other services, and then sold the packages via travel agencies. Consequently, Sun Country had no marketing costs, and by leasing its aircraft, terminal, and office space, the tiny airline kept debt service costs off its books.

Sun Country, unlike other U.S. charter companies, depended primarily on vacation travel business; other charters gained revenue by seizing opportunities to fly military, cargo, and summer vacation charters to Europe. Although Sun Country had remained profitable from the start, their business was highly seasonal, concentrated around the Midwest's peak tourist season, January through mid-April.

Attempting to balance the seasonal flux of revenue, Sun Country added new destinations and flights originating from cities with different travel patterns. The Dallas/Fort Worth area, for example, generated a travel market to Las Vegas even during the summer months. More importantly in terms of revenue growth, Sun Country increased capacity during winter months by leasing additional planes from a British carrier whose peak times occurred during the summer. Sun Country began with one additional 727 in December 1983, upped it to two planes during the next two years, and moved to three during the 1986-87 winter travel season. In January 1986, to accommodate growth, Sun Country moved into a new facility. In June, the company leased its first wide-bodied plane, a DC-10, which offered larger capacity and longer flight time than the 727s.

As Sun Country operating officers pushed to keep the airline growing, the majority owners at Mainline were increasingly concerned with the small charter service's ability to compete in an increasingly tough market. Major airlines had begun discounting fares, placing them in line with what Mainline paid for Sun Country seats. In that light, Phillips and Daniels struck a deal with NWA Inc., parent company of Northwest Airlines, to sell both Mainline Travel and Sun Country Airlines.

Members of the Braniff ownership faction felt the deal overvalued Mainline and undervalued Sun Country--$22 million and $5.5 million, respectively--and sued to block the purchase. A compromise deal was reached but rejected by two of the shareholders. The sale of Mainline was completed in 1985, but NWA dropped the bid for Sun Country. Sun Country eventually tried to force the dissenting shareholders to sell their shares to the company; the matter was tied up by litigation for several years. In late 1988, Midwest banker B. John Barry purchased majority ownership of Sun Country from the original investors.

Publicity shy Barry, who owned 12 Minnesota and Wisconsin banks with combined assets of $530 million, maintained a low profile over the next several years. The Gulf War changed all that. Thanks largely to military charters, Sun Country's revenue increased by 38 percent to $109 million, and net income more than doubled to $9.7 million for the 12 months ending June 30, 1991.

Sun Country's bottom line had also been aided by a decline in the number of charter companies. About 15 carriers had been in operation during the mid-1980s, but only a handful remained viable, including American Trans Air (Indianapolis), Tower Air Inc. (New York), and Key Airlines Inc. (Georgia). Sun Country was the third largest charter airline in the United States.

Historically, Sun Country had expanded conservatively, a practice which had helped the airline weather the industry downturn. The company had no long-term debt. Barry, encouraged by the year's growth, pushed forward with an aggressive expansion plan. He intended to add two DC-10s and four or five 727s to the aircraft already in service.

While the military charters had produced a good-sized blip on Sun Country's revenue screen, MLT continued to be a very important customer. The small carrier was also closely tied to MLT's sister company Northwest Airlines. Sun Country leased both airport facilities and a number of its planes from Northwest. (The Sun Country hanger had been purchased by NWA at the time of the MLT deal.) However, the relationship between the two companies was changing. In late 1990, NWA had notified Sun Country that it would not be renewing its lease on the facility or on some of its planes. (Significantly, Northwest Airline had begun operating its own quasi-charter service which it sold via Mainline; discounted tour seats and vacation packages were booked on regularly scheduled Northwest flights.)

The changes in climate with NWA factored into Sun Country's declining numbers in 1992. When NWA chose not to extend its DC-10 lease agreement with Sun Country, the smaller operation was forced to pump out dollars for repair and maintenance costs associated with the return of the aircraft sooner than anticipated. Also eating into Sun Country's profitability was a rebound of competition in the charter industry. A drop in aircraft leasing prices had encouraged start-up companies to join the fray. Sun Country, on the other hand, was still carrying higher rates. Moreover, a price war among the major carriers forced fares downward in all categories. On a positive note, passenger numbers remained solid, and NWA decided to extend the facility lease after all.

Even as Sun Country grew, charter demand fell, as more large airlines offered comparable service. Sun Country launched its own vacation travel package program late in 1995. Doug Iverson reported in December 1995 for Knight Ridder/Tribune News that some industry observers speculated the "move could be the beginning of a major rift" between Sun Country and NWA. "In the past, Sun Country flights to 12 cities were marketed through MLT. Since Northwest was essentially getting a cut, observers believe the airline didn't fight back and allowed cheaper flights to such destinations as Detroit, Chicago, Cleveland and Newark."

In early March 1996, Sun Country moved into direct competition with Northwest by offering discounted summer fares to locations such as Boston and J.F.K. in New York. Sun Country hoped Twin Cities travelers, who, according to American Express Domestic Airfare Index, paid 25 percent more than the national average for flights, would flock to their gates. Northwest, which controlled 80 percent of the Twin Cities air market, was quick to respond to the challenge. The giant airline slashed its fares. Sun Country had to reduce its fares, thus putting their profit margins in jeopardy.

In August Sun Country announced that it had lost 50 percent of its MLT business for the 1996-97 winter vacation season. The airline said that the cut-back was related to the reallocation of resources to scheduled flights. The business with MLT had been producing 25 percent of the charter company's annual revenue of more than $200 million.

Mark Travel Corporation owner Bill La Macchia purchased Barry's majority interest in Sun Country in the spring of 1997. La Macchia's Funjet vacation package firm had been doing brisk business with Sun Country since the mid-1980s. At the time of the sale Sun Country employed 1,000 people and operated flights from 23 cities. Privately held Mark Travel, based in Milwaukee, generated annual revenue of about $600 million.

Sun Country was on the slide when La Macchia took over. Operating profits which had been about $9.57 million in 1994, fell to $2.1 million in 1995, and plummeted again in 1996. Barry's venture in scheduled service had nosedived, scuttled by the combination of a meager marketing effort and Northwest's aggressive response to the competition.

"They got beat up terribly," La Macchia said of Sun Country's initiative against Northwest, in an April 1997 Star Tribune article by Tony Kennedy. "My focus is not scheduled service. I'm in the package business." (Barry retained some shares and remained on the board of directors as did founding pilot and CEO John Skiba. The Barry family and Skiba had been the only stockholders prior to the sale.)

La Macchia's son, Bill, Jr., called back from a nine-year stint of working in the Las Vegas hotel and casino business, was named COO of Sun Country. Six months later he was promoted to president. "Since then, La Macchia has steered the privately held company out of crisis and driven its growth by booking travel directly rather than relying on charter sales to wholesale tour operators," wrote John Rosengren and Paul Duncan for Corporate Report in February 1999.

The turnaround was aided by a 15-day strike by Northwest pilots in late August 1998. Seizing the opportunity, Sun Country added seats and new business destinations, and backed the effort with a $1.5 million advertising campaign. Bookings tripled and bolstered a traditionally slow period. The airline maintained pre-strike prices in an effort to earn the good will of frustrated Northwest travelers. Sun Country ran a two-for-one post-strike promotion hoping to bring back customers gained during the Northwest walk-out, but the bigger player countered with its own two-for-one ticket special.

In January 1999, Sun Country was offering 81 nonstop flights to 23 domestic destinations plus winter travel flights to five Caribbean Islands. The majority of the 2.6 million travelers the airline had carried in 1998 had been vacationers. The charter business still brought in more than 80 percent of sales, but the La Macchia's were positioning themselves to change all that. Sun Country planned to alter the scheduled service to charter service ratio to 60/40, respectively.

The new plan was a far cry from the course La Macchia, Sr., had chartered when he took over the struggling airline. The change in mindset was due to "economics," according to Sun Country marketing director Lori Barghini. "As a charter we don't have the option of doing anything to our schedule," she said. "And charter operators want to fly on a Friday or a Sunday. We have to fly every day to make a profit."

La Macchia was used to making a profit. Mark Travel's estimated fiscal 1998 net profit was $20 million. Leisure Travel News had named La Macchia one of the 25 most influential tour and travel industry executives on three different occasions. He had deep pockets. "I could probably support the needs of Sun Country for a long time," La Macchia said in an April 1999 Star Tribune article by Kennedy, "but we have to make a profit. The community has to support Sun County to enjoy a competitive market."

After putting $41 million on the table for 75 percent of Sun Country's stock, La Macchia saw net losses of $11.7 million in fiscal 1997. It was more than he had expected. Eager for total control, he purchased the remaining Sun Country shares in the summer of 1998. Now the profits and losses were all in La Macchia's hands.

La Macchia was going head to head with the nation's fourth largest airline, and Northwest had a history of driving small carriers out of the market. Sun Country, according to Rosengren and Duncan, faced some internal barriers to success as well. The airline lacked a frequent flyer program, was viewed as a vacation airline by business travelers, contended with already cramped terminal conditions, and had limited listing in the central reservation system used by travel agents.

Aware of its internal weaknesses, Sun Country had a frequent flyer/loyalty program in the works and tapped into Mark Travel's sophisticated computer resources for its reservation system. The existing Hubert H. Humphrey charter terminal at Twin Cities International was receiving a makeover, and a new terminal, with Sun Country as the anchor tenant, was scheduled to open in 2001.

Sun Country positioned itself as an underdog fighting giant Northwest. Playing off of ex-wrestler Jesse Ventura's unexpected victory in the 1998 Minnesota's governor's race, a billboard read: "Jesse Did It--Why Can't We?" The billboard campaign was just one piece of a multimillion-dollar marketing push. Print ads featured a mail-in coupon offering a chance to win a year of free travel. Company president Bill La Macchia, Jr., appeared on the small screen pedaling his family business door-to-door. Radio ads emphasized low fares and cultivated a connection with the flying public.

With about 500 daily flights and 410 planes, Northwest badly outgunned Sun Country, which had just 15 planes and flew a maximum of one time per day to the 15 cities it served. Eric Torbenson wrote on the eve of scheduled service, "La Macchia Sr. knew going in that he couldn't compete on price, nor on the number of flights. He hopes to win over Twin Cities travelers with great service. With just a few more than 1,200 employees company-wide, compared with 50,000 at Northwest, Sun Country feels the camaraderie of its flight crews will help set it apart from Northwest."

As the low airfare battle with Northwest heated up during the early summer, La Macchia made some other moves. Mark Travel purchased Trans Global Tours and strengthened its position in the Twin Cities market. The Twin Cities-based vacation charter business ranked second to NWA-owned MLT Inc. Sun Country announced the addition of state-of-the-art Boeing 737-800 series aircraft to its fleet beginning in January 2001, and that it would become a signatory carrier in Seattle, thus receiving a terminal location comparable to the larger airlines.

But these victories were small in comparison to the risks it faced in its fight with Northwest. In April 1999, La Macchia told the Star Tribune he was willing to spend up to three years building the Sun Country business, but his task was daunting. No other larger carrier had successfully bridged the gap from charter to scheduled airline. La Macchia, however, was determined to give it his best shot.

Further Reading

Causey, James E., "Mark Travel Corp. Owner to Buy Twin Cities Airline," Knight Ridder/Tribune Business News, April 17, 1997.

Iverson, Doug, "Minnesota's Sun Country Airlines Challenges Northwest with Air Fare Cut," Knight Ridder/Tribune Business News, March 8, 1996.

------, "Sun Country Airlines Aims to Outshine Northwest with Latest Low Fares," Knight Ridder/Tribune Business News, May 31, 1996.

------, "Sun Country Airlines Begins to Offer Packages Similar to Major Customer," Knight Ridder/Tribune Business News, December 20, 1995.

Kennedy, Tony, "Bill La Macchia: Sun Country Money Man," Star Tribune (Minneapolis), April 25, 1999.

------, "Competition Promises to Make Summer Air Fares a Breeze," Star Tribune (Minneapolis), April 24, 1999.

------, "Sun Country Airlines to Be Sold," Star Tribune (Minneapolis), April 16, 1997, p. 1D.

------, "Sun Country Loses Charter Business," Star Tribune (Minneapolis), August 8, 1996, p. 1D.

Kurschner, Dale, "Financial Situation Gets Cloudier at Sun Country," Minneapolis/St. Paul City Business, October 23-29, 1992, p. 12.

------, "Sun Country Takes Off," Minneapolis/St. Paul City Business, October 28, 1991, pp. 1, 21.

------, "Sun Country to Construct Headquarters," Minneapolis/St. Paul City Business, December 30, 1991, pp. 1, 16.

Maler, Kevin, "MAC Clears Sun Country Improvements for Takeoff," November 25-December 1, 1994, p. 8.

Reed, Peter, "The Little Airline That Did," Corporate Report Minnesota, February 1987, pp. 68-72.

Rosengren, John, and Paul Duncan, "Up, Up, and Away," Corporate Report (Minnesota), February 1999, pp. 24-29.

"Sun Country Airlines," Corporate Report Fact Book 1999, p. 577.

"Sun Country Airlines Becomes Signatory Carrier," PR Newswire, July 6, 1999.

Torbenson, Eric, "St. Paul-Based Airline Buys Tour Company," Knight Ridder/Tribune Business News, June 23, 1999.

------, "Sun Country Aims to Be Jesse Ventura of the Skies," St. Paul Pioneer Press, May 6, 1999, p. 1B.

------, "Sun Country: Little Airline That Could?" St. Paul Pioneer Press, May 30, 1999, p. 1A.

Ylinen, Jerry, "Court Dispute Focuses on Control of Innovative Charter Airline," Travel Weekly, July 20, 1987, p. 35.

------, "Shareholders Appeal Ruling to Force Sale of Sun Country Stock," Travel Weekly, December 14, 1987, p. 14.

— Kathleen Peippo


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Wikipedia: Sun Country Airlines
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Sun Country Airlines
SYLOGO.png
IATA
SY
ICAO
SCX
Callsign
SUN COUNTRY
Founded 1982
Hubs Minneapolis/Saint Paul
Frequent flyer program Ufly Rewards
Fleet size 9
Destinations 32
Company slogan Go Places.
Parent company Court atty for Petters Group Worldwide
Headquarters Mendota Heights, Minnesota
Key people Jim Olsen
(Founder and First CEO)
Stan Gadek
(President and CEO)
Website www.suncountry.com

MN Airlines, LLC, operating as Sun Country Airlines, is an American low-cost airline headquartered in the Minneapolis-St. Paul suburb of Mendota Heights, Minnesota.[1] Sun Country uses nearby Minneapolis-Saint Paul International Airport (MSP) as its main hub and flies scheduled and charter flights from the Humphrey terminal to destinations in the United States, Mexico, and the Caribbean.

The great majority of Sun Country's routes either arrive at or depart from Minneapolis-St. Paul or Dallas-Fort Worth, but the airline also offers periodic charter service from smaller Midwestern cities, such as Fargo, North Dakota, and La Crosse, Wisconsin, to leisure destinations such as Las Vegas, Nevada, and Laughlin, Nevada.

Sun Country operates a fleet of Boeing 737-800 and Boeing 737-700 aircraft, with an average age of about five years. Onboard, Sun Country offers first and coach class products. First class features 2-2 leather seats with automatic recline, audio entertainment, and hot meals. In coach, there are leather 3-3 seating and audio entertainment. Hot sandwiches are also provided in coach for $3. Full meal service is available in First Class. Blankets and pillows were reduced in price from $7 (in 2007) to $5 (2009) in coach, and come in an embroidered protective case. Sun Country planned to take delivery of additional aircraft from Boeing as it planned to expand in 2008. However, fuel costs delayed this expansion. Sun Country has created a focus city at Dallas-Fort Worth International Airport (DFW), with service to Mexico, Laughlin, Branson and other resort destinations.

Sun Country was among the first airlines to operate out of the new terminal D at Dallas-Fort Worth International Airport, which officially opened on July 23, 2005. Sun Country filed Chapter 11 bankruptcy on October 6, 2008. [2] However, it is fully operational as of November 2009.

The airline provides charter service for the U.S. Military.

Contents

History

Origins

After the shutdown of Braniff International Airways in 1982, a small group of Braniff employees approached Twin Cities tour operator MLT Vacations about dedicating a Boeing 727-200 to the tour operator's leisure destinations. Previously the tour operator had occasionally utilized a Braniff Boeing 727-200 overnighting at the Minneapolis-St. Paul airport for charters to leisure destinations. In June 1982, an agreement was signed to start a new airline, Sun Country. MLT Vacations owned 51% of the company, with the pilots and flight attendants owning the remainder. An Air Florida Boeing 727-227 advanced aircraft that had been destined for delivery to Braniff as N484BN was secured for the start-up.

Sun Country's original staff consisted of sixteen pilots, sixteen flight attendants, three mechanics, and one office person. The company's first president was Captain Jim Olsen, who also acted as Chief Pilot. His wife, Joan Smith-Olsen, acted as Chief Flight Attendant and Head of Inflight Operations. Jim Olsen retired from Sun Country in 2007. The company's first flight was January 30, 1983, from Sioux Falls, South Dakota, to Las Vegas. In the early days of the company, employees completed numerous tasks in order to lower costs. Flight attendants stocked liquor kits and prepared meals while pilots updated manuals and assisted in catering. The entire group assisted in cleaning the aircraft exterior and interior. On-time performance was 98% the first year, due to the young age of the aircraft and quality mechanics. Sun Country was profitable after six months of operation. In addition, no debt was accumulated in the succeeding years as the company financed all growth from internal funds.

Expansion and collapse

Slow and deliberate expansion through the 1980s created steady profits for the company. In 1986, the company put into service its first wide-body aircraft, a 380-seat DC-10-40 leased from future competitor Northwest Airlines. The aircraft's intercontinental range enabled the company to fly international charters and also accommodate high demand on the company's popular Minneapolis to Las Vegas route that the Boeing 727 fleet could not handle.

Sun Country also provided ad-hoc charter lift to civic organizations, corporations, sports teams, and virtually any other group that wanted to charter an aircraft. In 1989, Sun Country became a member of the Civil Reserve Air Fleet (CRAF). Many charters were flown in support of the Desert Storm effort in 1990-91. For their efforts in supporting the operation, 130 of the company's employees were recognized by the United States Air Force.

After reaping record profits of $9.7 million for the fiscal year ending June 30, 1991, the airline acquired additional Boeing 727 and DC-10 aircraft. Additional tour operators chose Sun Country as their air carrier, and an emphasis was placed on flying from the Midwest to Las Vegas, Florida, Mexico, and the Caribbean.

In the mid 1990s, Mark Travel Group, lead by Bill LaMacchia, Jr., acquired Sun Country and began changing the focus of the small niche-market airline. Much of the 1990s were a tough period for the airline, as an aging and over-worked fleet coupled with record demand stretched the airline to its limits. New management began an aircraft refurbishing program designed at improving the experience of Sun Country's passengers. As the DC-10 aircraft aged and required expensive maintenance, the airline gradually reduced the fleet, ultimately retiring the final DC-10 in early 2001. As major airlines became more sophisticated in managing their seat inventories, the demand for tour charter flying fell off. In June 1999, the management of Sun Country launched a major transformation from a charter carrier into a scheduled airline. New service from Minneapolis and Milwaukee was announced to destinations around the nation, including Los Angeles, Seattle, Detroit, Washington, DC, and Phoenix. The airline also announced a frequent flyer program, Smile Awards, which offered frequent travelers free flights, among other benefits. In 2000, Sun Country announced plans to replace its entire fleet with new Boeing 737 next-generation aircraft, with deliveries beginning in 2001. As Sun Country reinvented itself, heavy competition from local incumbent carrier Northwest Airlines and the events of 9/11 caused a precipitous drop in traffic and revenue. Contrary to its tradition of financial success and profitability, by the summer of 2001 the airline was bleeding money. After fighting to stay operational by cutting flights, destinations, and planes, the company finally closed its doors on December 8, 2001.

Rebuilding and Survival

Boeing 737-800 in the airline's current livery

During bankruptcy, Sun Country lost almost all of its 727 fleet and four recently delivered 737 aircraft: 737-8Q8 N800SY, N802SY, N803SY and a 737-7Q8, N710SY. Sun Country retained N801SY as well as its operating certificate. In the following months, a local group of investors organized as MN Airlines, LLC purchased the remaining assets in bankruptcy court and restarted the airline

Emerging from bankruptcy, Sun Country standardized its fleet on the next-generation Boeing 737-800. The airline initially operated combined charter-scheduled services from Minneapolis to Laughlin, Nevada's casinos and gradually added more charter destinations as finances allowed. Soon, new scheduled service was announced, focusing on Florida, Mexico, and the West Coast.

In a symbolic return to success, Sun Country acquired new aircraft in 2004 and 2005 and was profitable in 2004. To honor the company's roots and history, in 2004 Sun Country named new 737-800 N807SY "The Spirit of Braniff". This plane was the focus of the 2005 "Mid-Continent/Braniff Airways" reunion held on September 24, 2005, in the Sun Country Hangar at MSP. 350 former Braniff and Mid-Continent employees attended.

On October 31, 2006, the airline announced that its acquisition by Petters Group Worldwide and Whitebox Advisors, previously announced in July, had been completed.[3]

On March 5, 2008, Sun Country announced that Stan Gadek, former CFO of AirTran Airways, would become the airline's new CEO/president, replacing Jay Salmen who was acting as the interim CEO/president.

On April 1, 2008, Sun Country announced that it was placing 45 of its 156 pilots on furlough and was going to fly a lighter-than-normal summer schedule. The company blamed the decision on rising fuel costs, but the reality was a poor business model. Their inability to control labor costs made the impact of the high cost of fuel crippling to the airline. [4]

On April 16, 2008, the carrier, which is owned by Mendota Heights-based Petters Worldwide, cut 28 full-time and 97 part-time jobs, according to a report in the Minneapolis Star Tribune. The full-time jobs included major executives, while the part-time jobs consisted of mostly station personnel.

On August 13, 2008, the airline indicated it had hoped to get up to $50 million in loans or other financial help from the state of Minnesota and the airports commission. [5]

In September 2008, the carrier announced reductions or eliminations of flights to San Francisco and Los Angeles. It also began charging $12 for the first checked bag, following most major U.S. carriers. [6]

At the end of September 2008, Gadek called for a 50% pay-deferral to all remaining employees. Also on the 28th, Tom Petters resigned after an FBI probe discovered financial fraud on a massive scale.[7][8] Following this, the airline filed for Chapter 11 bankruptcy protection on October 6, 2008, in order to separate itself from the other Petters companies that were being taken over by a court appointee.[9]

On Christmas Eve, full pay was restored to all employees. Employees were also promised back-pay with interest.

The Company has emerged profitable in 2009 with an almost $1 million net profit announced in January.

In March, the company had fully repaid a $5 million loan from Elite Landings, a seller of corporate jets made by Airbus. The airline also announced new service to Branson, MO. and Boston. And in April, it announced a 1st Quarter Profit of $8 million.

Destinations

Sun Country Airlines currently flies to 28 destinations throughout the Caribbean, United States, and Mexico. Of these destinations, 10 cities are served year-round.

Fleet

Current Fleet

Sun Country Airlines fleet consists Boeing 737 Next-Generation airplanes. As of September 2009, Sun Country's average fleet age was 7.7 years old.[10]

Seasonally, additional aircraft are leased between Transavia and Sun Country. During its slow summer season, Sun Country occasionally leases planes to Transavia, and during Transavia's slow winter season, the airline leases planes to Sun Country(May-November are slow months for Sun Country and peak months for Transavia).

Brand new 737-800 aircraft N810SY was delivered in July 2007, and N811SY was delivered in August 2007. N812SY was ordered but not delivered.

N811SY carries the "25th Anniversary" logo on its nose.

N751AL, a 737-700 was leased after Aloha Airlines shut down but was returned in late September, 2008.

In February 2009, Sun Country leased two ex-EasyJet 737-700s and registered them N710SY and N711SY. Registration N710SY was originally used for a newly delivered 737-700 to Sun Country in 2001, but that airplane never flew a revenue flight as the airline shut-down just days after it was delivered. They also have leased one 737-800 which is an ex-Sterling Airlines airplane.

N810SY and N811SY were returned to "Petters Leasing" to further distance the carrier from Tom Petters. However, N811SY is still being used by Sun Country.

Sun Country Airlines Current Fleet
Aircraft Total Passengers (First/Coach
Boeing 737-800 7 162 (12/150)
Boeing 737-700 2 129 (12/117)

Retired Fleet

Sun Country Airlines Retired Fleet
Aircraft Total Year Retired
Boeing 737-700 2 2002 and 2008
Boeing 727-200
McDonnell-Douglas DC-10 12 1998

In-flight services

Sun Country has a buy on board program offering snacks and meals.[11]

Sun Country also offers First Class on its 737-800 aircraft.

Sun Country VIP Club and Ufly

In 2004, Sun Country announced a new frequent traveler program entitled the Sun Country VIP Club. This program is unique in the fact that it does not offer flyers miles or points; rather it grants members the right to airline tickets at the price of $39 plus 10 cents per mile traveled for domestic travel, or $89 plus 10 cents per mile for international travel. These VIP tickets are available up to one day in advance of travel. Membership costs $99 plus either $12 per month for an individual or $17 per month for a family.

In addition to the VIP-only fares, members receive first class discounts, first class boarding, security and check in Minneapolis and other cities. The VIP Club grants access to exclusive benefits (special hotel rates, discounts on travel services, lifestyle benefits, etc.,) that were only available to paying members.

In July 2007, Sun Country announced its first traditional frequent flyer program named "Ufly." "Ufly" offers 5 points (coach) or 7 points (First Class) for every one-way. 20 points are being awarded for first-time signers. Once 100 points are obtained, flyers are eligible for one free ticket with no restrictions.

After the Ufly Rewards launch, the Sun Country VIP Club was renamed Ufly Rewards Plus. The same benefits remained and members now earned points for their travel.

The Ufly Rewards is similar to Southwest's "Rapid Rewards" program and JetBlue's TrueBlue program.

References

External links


 
 

 

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