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.