Sun Country Airlines has a new sheriff in town and he’s cleaning house. He must be careful not to dump the baby with the bathwater. Sadly, it appears he has no choice.
Jude Bricker is the new President and CEO of Sun Country Airlines. He was snatched from ultra-low-cost-carrier Allegiant Airlines, where he served as Chief Operating Officer and Executive Vice President.
In a letter to employees, he outlined his plan of action to return the airline to healthy profitability. It includes:
- Offer buyouts to senior employees to cut labor costs
- Eliminate free carry-on baggage, charging to use overhead bin space
- Add more seats to aircraft at the expense of legroom
- Charge for beverages
- Expand from Minneapolis hub to offer more point-to-point traffic in leisure destinations
No word yet on whether first class will survive. I reached out to Sun Country for an answer and did not receive a reply.
> Read More: Sun Country First Class Los Angeles to Minneapolis
No More Room at the Table?
I’m just a humble analyst, but let me cut to the chase: I do not think Sun Country will survive.
Sun Country is still profitable, yet its profit continues to shrink. It hangs on because it has such a loyal base in Minneapolis. After all, the carrier brands itself as “the hometown airline” and is well-known for its friendly Minnesota service and menu of local beers.
In my recent Sun Country trip report, I noted–
Flying Sun Country in 2017 is like flying a legacy carrier 10-15 years ago. That’s both a good thing and a bad thing.
No power or wi-fi onboard is annoying, but if Sun Country is going for the Allegiant/Frontier/Spirit model, those perks are not necessary.
But a genuinely good first class product and the fact that it does not nickel and dime is such an appealing part of flying the airline. If it jettisons that, it competes against entrenched carriers that have a far lower cost base and a far larger fleet (Sun County has only 22 737s).
I fear that Sun Country is simply unable to compete in this market on any level.
As profits decline in what should be the best of times, Sun Country must do exactly what Bricker has outlined. Perhaps it can survive: customers consistently vote with their wallets and care primarily about price. But Sun Country won’t be lowering prices (it already matches Delta and United “Basic Economy” prices) — it will simply be cutting benefits. I am skeptical that is a winning combination.
Bricker is likely simply doing what is necessary…the status quo cannot continue. Still, my diagnosis of Sun Country is Stage 3 cancer. It may be too late for radiation and that treatment may cause more harm than benefit. Customers (like me) who are willing to buy a paid first class ticket on Sun Country will be gone and the airline will be left competing on price alone against carriers far better positioned to capture that market segment.
Except Sun Country is not losing money. They just aren’t making enough money. As a Minneapolis local I can’t wrap my head around the pivot.
I’ve made this clearer in my post. Still, it seems that if the airline can barely eek out a profit in this tremendous economy, it will face great trouble if the economy sours.
You didn’t even consider their charter network as well as their military network. Those profits are not required to be reported by SEC refulation. Part 121 air carrier operations require financial reporting s so you have no clue what they are actually making. Pretty poor article with a very narrow scope of view.
Thanks for your comment, but I do stand by my assessment.
See, e.g. ATA or North American Airlines.
I do agree that it will be very interesting what the future will hold for ol’ sunny! I also agree that you probably won’t see the name around sometime in the next 10 years plus/minus. With that – I sense some type of buy-out. Sunny may have leased aircraft but their real estate is something that is worth a whole lot in MSP. That’s a great strategic locale. Couple that with a growing fleet and route structure (if they can pull it off) then it might be worth something greater. The owner is an investor/businessman – I certainly do not see him letting this fizzle out…..we shall see. What a crazy business.
This doesn’t strike me as a long term move. Make the balance sheets look better in the short term and look for an exit strategy. Their position has been untenable for years. If they can string together a few good quarters they may look appealing as an aquisition target.
If you can crush your competitor in the market, why acquisition?
Who wants 22 old 737s and routes that, with few exceptions, Delta already flies?
Sun Country exists on the goodwill of locals who like their service and fair prices. They’re losing the fare game, and they’re about to chop the only leg up they have. But it might be their only move.
Just one more example of American beer being turned into American piss.
You mean water? Lol
They’ll probably end up getting acquired by Allegiant. I see room for only two ULCCs in the US domestic market: a merged Spirit-Frontier, and an expanded Allegiant after acquiring SY’s assets.
I used to be a flight attendant for Sun Country Airlines, and they forbid me to take time off for my fathers funeral, and if I did I would of been terminated. Keeping in mind I’m a single mom raising 2 sons, I could not afford to loose my job at the time. Overall we were not treated fairly or compensated fairly as employees. #goodRiddence
I’m so sorry to hear of your inhuman treatment at Sun Country.
Hope SC does not fold. I travel from San Francisco to Minneapolis several times a year and SC is my first choice compared to United, Delta. I also carry the Sun Country Visa, so I get a perk of free checked bag and miles. It is a no frills airline. Works for me. And you can’t beat the r/trip from SFO to MSP usually about $250.00 great deal. And I always find the flight attendants pleasant but not overly.