Following a turbulent history, Minnesota's Sun Country Airlines is flying smoothly

KATHY WURZER: Minnesota Sun Country Airlines has had a pretty turbulent trip to where it is today. The airline, which turned 40 years old this year, barely survived its former owner Tom Petters' ponzi scheme and a subsequent bankruptcy. But the airline went public last year and says it's continuing to grow. That's even after major missteps earlier this year that left travelers fuming.

The story of Sun Country Airlines is pretty interesting. So we called Kyle potter. He's the executive editor of the travel website Thrifty Traveler. He recently wrote about Sun Country. Hey, welcome back Kyle. How are you?

KYLE POTTER: I'm great, Kathy. Thanks for having me.

KATHY WURZER: Good. Thanks for being here. I had forgotten that Sun Country was founded by the former employees of Braniff Airlines.

KYLE POTTER: You know what, this airline has such a fascinating history. And, you know, basically we're right around the corner, if we haven't passed it already. They are now 40 years old. So there are a lot of ups and downs in the history of Sun Country, as we're going to talk about.

KATHY WURZER: Yeah. No kidding. So let's start with the-- we'll start at the beginning, why not? What was the reason that the Twin Cities was the home base for Sun Country? Do you know?

KYLE POTTER: You know, I would have to go look back at some of the stories. But the long and short of it is that Minneapolis really just needed an airline like this. It needed an airline that was focused primarily on carrying people to vacation-centric destinations. You know, going south when it gets cold and going east to west when it's warmer in the summers.

And that's a role that, despite all of the changes that Sun Country has been through over the last four decades, that has really been the DNA of the airline. It's just gone about it in several different ways. And as we'll talk about and as we all know, it hasn't always been so smooth.

KATHY WURZER: No, it has not. I know, of course, it went bankrupt in 2008. So it barely survived at that point. And that was with the Tom Petters-- this is when Petters' own Sun Country was part of that big ponzi scheme?

KYLE POTTER: Yeah. And you know what, that is an ugly and I think often forgotten part about Sun Country's history. Because the last decade in particular has also seen a lot of changes that I think in the minds of many Minnesotans has kind of outweighed that more sordid part of its history. But it did make it through and changed a lot in the ensuing decade and a half at this point.

KATHY WURZER: And who was behind the transformation?

KYLE POTTER: It's a couple of key changes. The first was, as Sun Country eventually got bought out by the Davis brothers who own Cambria, they quickly brought on-- or not quickly, but eventually brought on a CEO from Allegiant Airlines, which isn't too well known here in the midwest although we do have some Allegiant flights taking off from MSP these days. But this is really the most budget of budget airlines in the country.

And so that brought on some changes, some very, very fundamental business changes. And then eventually those were fueled in part by the acquisition by the Apollo Group, basically a New York based hedge fund. And so it really had a big DNA change in terms of what Sun Country was.

To that point, they had really been a beloved local airline by Minnesotans for Minnesotans. And. Of course, Minnesotans love that story. Any company that can say that, they already are winning in Minnesotans books.

KATHY WURZER: Right.

KYLE POTTER: And in doing that transition, they really became more like a budget airline. So that means smaller seats, more fees, paying to pick your seats let alone check a bag or bring a carry on. So there were some big changes in addition to the fact that they took the first class seats out of Sun Country's planes over the course of a couple of years after these two really fundamental changes, bringing on a new CEO and a new ownership group.

KATHY WURZER: I know there was grousing. And revenue leapt from 300 and what, 308 million in 2011 to 709 million in 2019. I mean, profits have been increasing. So they must be doing something right?

KYLE POTTER: Well, exactly. And when I spoke with CEO Jude Bricker last month, that was the point that they made. Was that they came to a fork in the road where Sun Country needed to decide. Was it going to be the beloved local hometown airline that lost money or barely eked out profits even in the boom times of heading into just those pre-pandemic years, or was it going to change course and become an airline that was sustainable and could grow.

And clearly they picked the latter choice. It upset a lot of people here locally. But they still have a healthy airline that they can fly when they want to. And I don't want to say that Sun Country would have gone out of business eventually had they not made this pivot, but certainly they are on a much better path financially and sustainably as an airline.

KATHY WURZER: What was the calculus behind going public last year? The risks versus the benefits of doing that.

KYLE POTTER: The biggest thing is an airline-- Sun Country has a big presence here in Minneapolis. But if you look over the course of airlines nationwide, they are very small. And growing when you don't have access to public markets as an airline is incredibly difficult.

And so I think that combined with the fact that the folks who run the airline rightly saw that there was going to be an explosion in everyday travelers looking to get out after the worst of COVID and looking to do so for cheap, I think they timed it right ironically.

It seemed very odd at the time in March, 2021 when they went public, that this was the time, of all times, to take an airline public. But getting ahead of the curve that we're clearly on right now where people are just itching, coming out of the woodwork to go on vacation, getting those building blocks in place was really critical to get Sun Country to the point where it is today.

KATHY WURZER: But not without its problems. Obviously there were the flight cancellations, the stranded passengers earlier this year. That was a mess. How much of a hit did they take PR wise? How much hit did they take?

KYLE POTTER: I don't know that it's so much about what's happened this year or within the last year because Sun Country is not alone. Every single airline, big and small, across the country has suffered delays and cancellations. So I think that has kind of buffeted whatever the blowback would have been just from this year.

I do think, however, that Sun Country is still paying the price for what happened in 2018 when there was a historic snowstorm that just absolutely gobsmacked MSP. And Sun Country was at the end of its summer season at several airports down in Mexico, and it wound up stranding more than 300 passengers in a foreign country for several days and left them to their own devices to make it back home.

I think every single time Sun Country is in the headlines, whether it's a good story or bad, that story from now four plus years ago still gets brought up. I think it's really been seared into the minds of Minnesotans and I think the airline is still paying a price for that.

KATHY WURZER: I wonder then, I understand that the CEO told you that they're looking at flights to Europe in the future?

KYLE POTTER: I think that's a lofty goal. And I think CEO Jude Bricker has said as much that this is not something that they're thinking about anytime in the near future. That this is a three to five or more year goal that they have. But Sun Country is growing. And as an airline grows, they have to think bigger and they have to find new markets to fly to.

And what he told me was, basically if you want to make money in the summer, which, especially for Sun Country where so much of its business is on flying Minnesotans to California and Arizona and Mexico in the winter. If you want to make money in the summer and find a new market, there's no better market than flying over to Europe.

So I don't know if this is ever going to happen, if it does happen. I don't know that that means that there will be nonstop flights from Minneapolis to places like Paris or London or Rome or anything like that. But I do think it's on their radar. And for the first time probably in company history, aside from a very, very brief strange flight that they ran to London for just a brief summer in 2010 I believe, this is now a possible feasible goal again five years down the line.

KATHY WURZER: I wonder if they're able to pull it off given all the snafus that occurred when they added the Vancouver flights. Remember that?

KYLE POTTER: Yeah. Exactly. And there have no doubt been some growing pains. And I think that's a big part of why this is not a, we're going to do this in summer 2023, let alone this summer, next summer, the following. But several years down the line. Is that every airline needs to grow back to where it needs to be in order to not have these kind of snafus. And that's a process that still is probably going to take most airlines several years.

KATHY WURZER: Before you go here, we were talking about passenger flights and that passenger travel, that kind of thing. I'm wondering though how big of a deal is it to the company's future to have this partnership with Amazon?

KYLE POTTER: I think it's massive. Cargo was a lifeline for every airline in the country during the worst of the pandemic. And Sun Country could not have time that contract with Amazon any better. They very, very quickly scaled up their cargo operation on behalf of Amazon in 2020. And it's reliable. When passengers come and go, it really doesn't matter, you can still run those cargo flights. And that is a sustainable lifeline for any airline.

The fact that that is now in the mix for Sun Country is really important, and I think it's going to be kind of a leading indicator I guess of where they go next. Because I think a lot of the decisions that they make, for example flying to Europe if they ever do it, is probably going to be based upon inking something to do more with cargo first.

So for example getting the kinds of wide body jets with two aisles that you need in order to fly all the way over to Europe, they're going to have to expand their cargo relationships either with Amazon or another carrier first in order to make that kind of a step for passengers.

KATHY WURZER: Mmh. All right. Kyle, thank you so much for the conversation.

KYLE POTTER: Always a pleasure, Kathy.

KATHY WURZER: Been talking to Kyle Potter. He's the executive editor of the travel website Thrifty Traveler.