Sun Country carves out new opportunities


Sun Country has been a mainstay in its home of Minneapolis-St Paul for decades, and during its 30-plus year history the airline has built up a loyal following in that market. But consistent profitability has been elusive for the airline, and it has had a couple of stints in the bankruptcy process. 

During 2017 the company named a ULCC veteran as its CEO and was purchased by the private equity firm Apollo Global management. Since that time Sun Country has undertaken a transition to being a low cost operator and started working to diversify its network outside Minneapolis, focusing on capitalising on demand in seasonal markets during their peak periods. 

Mid-2019 is a crucial period for the airline as Sun Country launches a new website in conjunction with the overhaul of its passenger service and departure control systems.

The airline is also working toward a unit cost target of USD6 cents excluding fuel by the end of year 2019. Sun Country’s management believes all those efforts and more should stabilise the airline and set it in a favourable position for future growth. And ultimately, Apollo will move to sell, or spin off, Sun Country to gain returns on its investment. 


  • Sun Country is engaged in a business transition that requires investments in refleeting, cabin configurations and IT. 
  • The airline is also undertaking an overhaul of its network, working to leverage opportunities in seasonal markets outside Minneapolis

Sun Country is undertaking a business model overhaul that requires ample capital 

Sun Country named former Allegiant Air Chief Operating Officer Jude Bricker as its CEO in mid-2017 and later that year the airline was acquired by Apollo, which brought in crucial capital for the airline to make necessary investments in order to change its business model.  

The airline’s new management has been working to optimise its fleet, to cut costs, and to invest in overhauling the company’s IT infrastructure. 

Sun Country is in the process of transitioning to an all-Boeing 737-800 fleet while working towards more direct ownership of its aircraft.

Speaking at the recent CAPA Americas Aviation Summit, Mr Bricker remarked that when he arrived at Sun Country all 22 of its aircraft were leased, but by YE2019 50% of the fleet should be owned. The company is also working to transition to an all-737-800 fleet by the end of 2019. 

Sun Country CEO Jude Bricker speaking at the 2019 CAPA Americas Summit in Denver, Colorado 

The kind of leases Sun Country that had historically engaged in – pursuing an aircraft with a tailored set of specifications – “is an expensive market to get your kit from”, Mr Bricker said. Those types of leases differ from sale/leaseback deals, which many airlines use as vehicles to finance aircraft.

The company has also eliminated first class and will operate its 737-800s in a single class 183-seat configuration; but there are also three sections featuring various pitch for sale at increasing price points under the banners of “standard”, “better”, or “best”, which is a premium economy offering. 

A low cost version of an extra legroom offering is necessary because of Sun Country’s length of haul, which averages four hours “block to block”, said Mr Bricker. 

The cabins also feature power plugs and allow passengers to stream movies and TV shows from an onboard server free of charge. The company offers non-alcoholic drinks free of charge, a difference from most US ULCCs, which charge for those beverages. 

Sun Country’s approach with its cabin strategy was to make it satisfying enough “so you don’t remember the negative qualities when you arrive [at your destination]”, Mr Bricker explained. 

Sun Country engages in niche opportunities to diversify its network 

Sun Country is also undergoing a change in its network strategy, working to balance the seasonal nature of its leisure traffic patterns from Minneapolis

Mr Bricker explained that during the US winter there’s plenty of demand originating in Minneapolis, and that demand also carries over into the spring season.

During the summer season there are (on average) 100 days of very nice weather in Minneapolis, and residents of the area travel less. 

That creates an opportunity for Sun Country to build nonstop seasonal leisure service in other markets, including its recent additions in Portland, St Louis, Nashville, Dallas, Providence, and Madison, Wisconsin. Approximately 90% of Sun Country’s markets are operated on a seasonal basis. 

Speaking to CAPA TV at the conference, Mr Bricker noted that an opportunity exists to operate into markets that peak seasonally, and Sun Country believes that in the US industry those types of markets are an area of unmet demand for leisure travellers. The way that incumbent airlines meet that demand is “to jack up prices”, Mr Bricker said. 

Sun Country CEO Jude Bricker speaking to CAPA TV during the CAPA Americas Summit in Denver, Colorado

Using Sun Country’s service from Los Angeles to Honolulu, launched in the summer of 2018, as an example of a market where the airline can achieve success on a seasonal basis, Mr Bricker said that the airline had operated the route from the US Memorial Day holiday to Labour Day. He concluded that even as Sun Country became the sixth airline on the pairing, it secured enough demand to fill its aircraft and “significantly lower airfares for customers”. 

Sun Country is in the final stages of a long-overdue IT system overhaul

Sun Country has also been investing in its IT infrastructure (approximately USD6 million to USD7 million), including a new website set to debut in Jun-2019 and a new passenger service system (PSS), which are expenditures that are long overdue for the airline. Mr Bricker noted that Sun Country’s old PSS allowed for the bundling of hotel and airfares, “but didn’t allow us to do anything else airline related very well”, including changing or modifying flights on the website. 

Given that the vast majority of Sun Country’s passengers are leisure travellers, bundling non-air related ancillaries, including hotels and car rentals, is an important high margin sales streams for the company. Mr Bricker said that Sun Country’s revenues from hotel sales matched Allegiant's, but there is work be done in rental car sales. 

Sun Country's unit costs excluding fuel should fall to USD6 cents by YE2019 

As it has made necessary investments to remain viable in the US market, Sun Country has also worked to slash its unit costs.

Mr Bricker remarked that when he arrived at the airline Sun Country’s unit cost excluding fuel was USD8.5 cents and that it should fall to USD6 cents by the end of 2019. Aircraft densification represents broadly half of the reduction, and the remainder is the aggregate of small initiatives the airline has been working on. 

Due to its length of haul, Sun Country’s aircraft utilisation may not be as high as that of other US ULCCs. Over the long term Mr Bricker expects Sun Country’s average daily utilisation to settle at 10 hours.

By comparison, Spirit posted a 12-hour average daily aircraft utilisation in 2018. 

Sun Country is well on its way to creating a more sustainable business 

Armed with capital from Apollo Global Management, Sun Country has undertaken significant changes in nearly every facet of its business during the past 18 months. The goal is to create a more sustainable business for the airline and seek out niche opportunities in the US marketplace. 

Apollo’s commitment to Sun Country will be an important ingredient in the airline's future, but for now the airline appears to be on the right course to achieve a level of sustainability that wasn’t available in the past.

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