Sun Country heading for some turbulence

Cptnchia said:
That's OK. Once they go BK, Delta will buy them and merge DOH.

Or so I've been told.

By some of their pilots. #Goldring!




o_O
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I do know a guy who, at a job fair, was asked "Would I be better off my pulling my app and waiting for the integration or just coming over now?"

q03EG.gif
 
I don't think this new CEO will last very long when their profits start tanking. It's a completely different market up here in MSP than it is in LAS. Minnesota folk are still upset about NorthernJets leaving so they adopted SY as their new "hometown airline". I give it 6 months before he's gone.


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azmedic said:
I don't think this new CEO will last very long when their profits start tanking. It's a completely different market up here in MSP than it is in LAS. Minnesota folk are still upset about NorthernJets leaving so they adopted SY as their new "hometown airline". I give it 6 months before he's gone.


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If recent history is any indication, I think this business model will work fine in MSP, much like it has worked across the country for Spirit and Frontier. People might not like the change, but the story of Spirit and Frontier confirms that customers like the low fares and network offerings. I also suspect that he's going to plan on diversifying the revenue base from MSP, so even if the MSP market didn't take the product, he'd no longer be fully tied to it.

The incoming CEO is very smart and I think will be more than capable of transforming Sun Country into a successful, sustainable company. I know it's not a popular answer, but unless the Sun Country owners (Cambria / the Davis family) truly don't care about their money, then this foray into the airline industry has been a huge drag. The way I see it, there were four options for them:

(1) continue down the path of a very marginally profitable airline, costing their owners a fortune with each passing day that they don't get a return on their investment
(2) transform themselves into a business model that generates better returns and is sustainable
(3) be acquired by another airline
(4) be acquired by a Private Equity shop like Indigo Partners, and then likely move to #2 anyways.

I, for one, am excited for the change and think it will help keep the Sun Country name in the industry for longer than it may otherwise have. I only wish I had access to equity a few years ago when the owners were shopping them around and they were barely break-even - to implement this exact strategy.
 
Ecl!pse said:
If recent history is any indication, I think this business model will work fine in MSP, much like it has worked across the country for Spirit and Frontier. People might not like the change, but the story of Spirit and Frontier confirms that customers like the low fares and network offerings. I also suspect that he's going to plan on diversifying the revenue base from MSP, so even if the MSP market didn't take the product, he'd no longer be fully tied to it.

The incoming CEO is very smart and I think will be more than capable of transforming Sun Country into a successful, sustainable company. I know it's not a popular answer, but unless the Sun Country owners (Cambria / the Davis family) truly don't care about their money, then this foray into the airline industry has been a huge drag. The way I see it, there were four options for them:

(1) continue down the path of a very marginally profitable airline, costing their owners a fortune with each passing day that they don't get a return on their investment
(2) transform themselves into a business model that generates better returns and is sustainable
(3) be acquired by another airline
(4) be acquired by a Private Equity shop like Indigo Partners, and then likely move to #2 anyways.

I, for one, am excited for the change and think it will help keep the Sun Country name in the industry for longer than it may otherwise have. I only wish I had access to equity a few years ago when the owners were shopping them around and they were barely break-even - to implement this exact strategy.
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I don't think it's the LCC strategy that people are worried about, other than maybe that Sun Country is late to the game and that market is pretty crowded. I think it's guilt by association of Allegiant's horrible maintenance and perennial status as #1 on the "most likely to augur one in" poll. Whether this guy was involved in that part of the operation or not, for many people the stink is still there.
 
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Roger Roger said:
I don't think it's the LCC strategy that people are worried about, other than maybe that Sun Country is late to the game and that market is pretty crowded. I think it's guilt by association of Allegiant's horrible maintenance and perennial status as #1 on the "most likely to augur one in" poll. Whether this guy was involved in that part of the operation or not, for many people the stink is still there.
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To be honest, the reputation of "Forklift Joe" didn't hurt Joe Leonard when he ran AirTran. The general public usually isn't as interested in prior asshattery by these people and only care about a cheap ticket.
 
Cptnchia said:
To be honest, the reputation of "Forklift Joe" didn't hurt Joe Leonard when he ran AirTran. The general public usually isn't as interested in prior asshattery by Hess prior and only care about a cheap ticket.
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Sure, the public doesn't probably care, but I was addressing the negative reaction among members here (specifically myself).
 
Roger Roger said:
Sure, the public doesn't probably care, but I was addressing the negative reaction among members here (specifically myself).
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I don't see a large "negative" reaction, more a "here we go again" one. I get your angst, didn't you say that's where you wanted to go?

Regardless, as hard as it sounds, some of these ULCCs need to disappear, either by merger or shutting down. Only way to maintain a healthy industry that is not pummeled in an economic downturn.
 
Cptnchia said:
I don't see a large "negative" reaction, more a "here we go again" one. I get your angst, didn't you say that's where you wanted to go?

Regardless, as hard as it sounds, some of these ULCCs need to disappear, either by merger or shutting down. Only way to maintain a healthy industry that is not pummeled in an economic downturn.
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I am advised, by an observer in AVL, that there are four (count 'em four) broken M80s from Allegiant on the ramp there today; surely, this is not something SCY would wish to emulate.
 
Roger Roger said:
I don't think it's the LCC strategy that people are worried about, other than maybe that Sun Country is late to the game and that market is pretty crowded. I think it's guilt by association of Allegiant's horrible maintenance and perennial status as #1 on the "most likely to augur one in" poll. Whether this guy was involved in that part of the operation or not, for many people the stink is still there.
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Roger Roger said:
Sure, the public doesn't probably care, but I was addressing the negative reaction among members here (specifically myself).
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I see your point about Allegiant's checkered operational past and there being concern with him as the new CEO. I was merely addressing the comment about lack of profitability leading to him being ousted in 6-months. By everyone's admission in this thread, the majority of customers will likely not have any clue about his past at Allegiant, and if history is any indication, the ULCC model (if he goes that direction) is very profitable. The jury is obviously way out on how this will play out, but history's on his side.

Cptnchia said:
I don't see a large "negative" reaction, more a "here we go again" one. I get your angst, didn't you say that's where you wanted to go?

Regardless, as hard as it sounds, some of these ULCCs need to disappear, either by merger or shutting down. Only way to maintain a healthy industry that is not pummeled in an economic downturn.
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I don't fully understand the 2nd comment - why do the ULCC's need to disappear to maintain a healthy industry in a downturn? Why shouldn't the majors be building business models that are sustainable through the cycle? To be clear, I think the majors are working toward this - but if there were to be a downturn, and the majors were wiped out by fair, non-subsidized competitors, then clearly the underlying fundamental health wasn't there in the first place and the business was riding the wave of "the good times". Obviously my argument wouldn't work in a subsidized carrier scenario since it wouldn't be a level playing field, but the ULCC's here in the US are most certainly competing on a level playing field, and if that's the only model that can sustain through the cycle then so be it - the free market has spoken.
 
ppragman said:
I mean...that's actually not unreasonable at a certain point. Maybe not at DL, but I was kind of shocked when AS bought Virgin...
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I agree. You just can't tell with merger and acquisitions. SY a MSP-based 737NG operator could easily be fair game for a play by DL or SW. Hell, even at AS/VX I've already heard the "we're buying Sun Country" rumor.
 
Ecl!pse said:
If recent history is any indication, I think this business model will work fine in MSP, much like it has worked across the country for Spirit and Frontier. People might not like the change, but the story of Spirit and Frontier confirms that customers like the low fares and network offerings. I also suspect that he's going to plan on diversifying the revenue base from MSP, so even if the MSP market didn't take the product, he'd no longer be fully tied to it.

The incoming CEO is very smart and I think will be more than capable of transforming Sun Country into a successful, sustainable company. I know it's not a popular answer, but unless the Sun Country owners (Cambria / the Davis family) truly don't care about their money, then this foray into the airline industry has been a huge drag. The way I see it, there were four options for them:

(1) continue down the path of a very marginally profitable airline, costing their owners a fortune with each passing day that they don't get a return on their investment
(2) transform themselves into a business model that generates better returns and is sustainable
(3) be acquired by another airline
(4) be acquired by a Private Equity shop like Indigo Partners, and then likely move to #2 anyways.

I, for one, am excited for the change and think it will help keep the Sun Country name in the industry for longer than it may otherwise have. I only wish I had access to equity a few years ago when the owners were shopping them around and they were barely break-even - to implement this exact strategy.
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I agree with your post 100%.

I hate to say it but, ala cart pricing is the future of the airline industry, unfortunately.
 
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