Reports Of Our Death Have Been... Well, You Know
We're not going to call the turnaround in fortunes for St. Paul,
MN-based Sun Country Airlines "miraculous"... though for a company
many chalked up for dead last October, news of a fourth quarter
profit is nothing short of amazing.
On Wednesday, Sun Country Airlines announced net income of
$955,000 for the fourth quarter of 2008. That's not a large sum by
any means in the airline business... though compared with the $18.0
million loss Sun Country incurred in the fourth quarter of 2007,
It also represents the first profitable fourth quarter Sun
Country -- a relatively small niche carrier, largely dependent on
vacation and charter flights -- has had in the past five years.
"Our 2008 financial results reflect a significant improvement
based upon the successful turnaround of Sun Country Airlines. This
success was achieved through the hard work and dedication of our
employees as well as the changes to our business model over the
past several months," said Stan Gadek, Chairman and CEO of Sun
As ANN reported, fortunes turned decidedly
against Sun Country last year, when parent company Petters
Aviation, LLC filed for Chapter 11 bankruptcy protection on October
6. The capitulation came about two weeks after the offices of
Petters Group Worldwide were raided by federal agents. Company
founder Tom Petters resigned as chairman of Sun Country's board of
directors soon afterward, under clouds of accusation and a strong
whiff of corporate malfeasance.
Despite the turmoil, Gadek asserted his airline would continue
flying... though employees were asked to accept two rounds of pay
cuts through the end of the year, as the decline of Petters tanked
the airline's chances of securing outside loans to cover regular
At the time, Gadek also promised those cuts would be
short-lived. The airline allowed certain pay concessions to lapse
December 31, as planned, and employees were reimbursed for 40
percent of their early October wage sacrifices on their end of year
paychecks. The airline plans to pay back the rest of the deferred
wages by April -- plus three percent interest, for what amounted to
a loan from the airline's workforce.
"Based on current booking and revenue trends, we expect to be
profitable in first quarter and full year 2009," continued Gadek.
"While we were faced with numerous challenges, including record
high fuel prices, we successfully positioned the company for
profitability and growth going forward. We appreciate the continued
support of our Sun Country customers and look forward to providing
the superior level of service that Sun Country is known for."
Despite Wednesday's good news, Sun Country still has a ways to
go before it can be truly termed a success. For the year, the
carrier reported a loss of $21.4 million... though, again, that
compares favorably to a $35.0 million loss in 2007.
Perhaps most importantly, for the second half of 2008 -- when
more than a few analysts and pundits expected the airline to fold
-- Sun Country recorded net income of $412,000... compared to a net
loss of $ 7.8 million in the second half of 2007.
And, perhaps, even more importantly than that, the airline
accomplished those feats while apparently doing right by its
workforce, a decided rarity today (just ask employees at
United, American, US Airways...)
If that streak continues, Sun Country could give Southwest a run
for its money on how to run a successful airline.