Sun Country Banks on Amazon

Airlines in the Media

• We’ll have to wait until May before seeing how Sun Country (and Frontier, for that matter) performed in the fourth quarter. That’s when the DOT’s transportation statistics division publishes results for the industry.
  
  But good news! Sun Country CEO Jude Bricker presented at last week’s Routes Americas conference in Indianapolis, providing an update on the airline’s current situation. Interestingly, Bricker expects to have industry-leading profit margins by the time its new relationship with Amazon is up and running. It plans to fly packages for the online retail giant, using 10 B737-800s that would otherwise be underutilized.
  
  The arrangement will be one of three distinct lines of business for Sun Country, the others being its vibrant charter flying and of course, its scheduled passenger business. Minneapolis-St. Paul remains the focus of the latter, with about 60% to 70% of its flying concentrated there. It’s opportunistically added leisure flights from other airports too, like Dallas DFW and Portland PDX.
  
  Since Bricker arrived, in fact, the airline has added more than 20 new markets while densifying seat configurations and lowering airfares. The target: Anyone who pays for their own tickets.  Minneapolis giant Delta can have the corporate market to itself. Sun Country claims a base of about 1m loyal customers and earns fare premiums over Spirit and Allegiant.
  
  It wants to broaden its support across the Midwestern U.S.; Wisconsin’s capital Madison is one market it’s chasing. It’s even interlining with regional bus companies. How about its new Hawaii service from Minneapolis operated via Los Angeles? That’s one of Sun Country’s best markets, Bricker said, with one of the keys to its success being the fact that flights only run during peak periods.
  
  One benefit of the charter business is that fuel costs are paid for by the customer, removing a key risk. Bricker does however acknowledge the challenges of finding workers in a tight Minneapolis job market and managing the operational complexity of essentially running three different businesses while growing rapidly and frequently moving around planes to follow peak seasons. He separately mentioned Belize as a booming market right now. Demand to Punta Cana, on the other hand, is down 50%. ◄