Sun Country Will Transform Into An Ultra Low Cost Carrier

I tend to think that most US airlines fall into one of four categories:

  • Global and/or network carriers
  • Low cost carriers
  • Ultra low cost carriers
  • Regional carriers

There’s no denying that the line isn’t as clear as it used to be. While ultra low cost carriers (Allegiant, Frontier, Spirit, etc.) are easy enough to categorize, and regional carriers are easy enough to categorize, the concept of a “low cost carrier” seems a bit outdated.

For example, historically JetBlue and Southwest are considered low cost carriers, even though they’re unarguably more full service than American, Delta, and United, in terms of their passenger experience.

Sun Country’s confusing position in the industry

One airline that’s tough to place is Sun Country. They’re somewhere in the middle. For those of you not familiar, Sun Country’s major hub is in Minneapolis, and almost all their flights operate out of there.

Sun Country:

They’re more full service than Frontier and Spirit, and are generally known for their good service. At the same time, can they command a revenue premium on ticket prices for all the things they’re choosing not to charge for? It would appear not, in general. Spirit is consistently cheaper than them, though makes up for it on fees. Meanwhile Delta and Sun Country seem to have similar fares, except those fares from Delta are typically “Basic Economy,” meaning they have more opportunities to upsell.

Sun Country filed for Chapter 11 in 2008 and has been doing better since, though they’re still lagging behind their competitors. As a result, it looks like the airline is planning on taking a new direction.

Big changes are coming to Sun Country

Last month Sun Country appointed Jude Bricker as their new CEO, who is a former Allegiant Airlines executive. StarTribune has the details of a memo he sent out to employees outlining his vision. While there’s not yet a timeline for these changes, he’s determined to cut costs and increase revenue, while still “protecting Sun Country’s reputation of quality customer service.”

What kind of changes should we expect to see at Sun Country?

  • Charging fees for carry-ons
  • Putting more seats on planes, which probably means removing legroom from seats, and possibly also eliminating first class (that isn’t stated explicitly, but given how low their first class fares are, I have to imagine this will happen)
  • Offering buyouts to senior employees, especially flight attendants and non-union employees with more than 10 years of experience; this was framed as an opportunity to give “long-tenured employees an opportunity to leave Sun Country if those individuals were not on board with the new vision”
  • Being less focused on their Minneapolis hub given the competition they have there, and instead trying to offer more point-to-point flights

Bottom line

As of now the details are limited, but it’s clear that Sun Country will radically be changing their direction. It’s sad, because as of now they’re an airline that people quite like. However, they’re underperforming compared to their peers, and I think that comes as no surprise, as they presumably aren’t able to get a revenue premium for their product.

As the legacy carriers and ultra low cost carriers move closer together (thanks in particular to the introduction of basic economy), it leaves Sun Country in a tough position.

What do you make of Sun Country’s change in direction?

Comments

  1. Very disappointing to see Sun Country turning into yet one another piece of… Spirit. In general it’s astonishing how far and quick US domestic passenger experience degraded over a very short period of time. VX is set to gone. AA bringing new planes with legroom less than FR. Basic Economy.

    Sun Country would better launch close cooperation with Alaska to offer people viable alternative from Spirit and Basic Economy.

    It’s also weird they decided to drive their business from MSP.
    MSP has just about a little more than ZERO competition thanks to DL overwhelmingly strong positions there. It’s blessing for them to have a base in MSP.

  2. What is the difference between low cost and ultra low cost? And where you draw the line between the abovementioned qualification?

    Is basic economy qualifies airlines for LCC or ULCC? Does international flight qualifies airlines for global carrier? What about regional carrier? Or maybe you can simplify qualification with low cost and full-service, tough US3 and their basic economy may still complicated things…..

  3. Ben,

    Just a point of history for all you coasters who don’t really spend much time in this part of the world. Sun Country has traditionally focused on leisure destinations and charters. Then, in the early 2000’s, they tried to directly take on NWA. NWA squashed them like a bug by undercutting them, eventually leading to the bankruptcy. They then returned to their roots. So, looks like they are trying to find a way to better compete with Delta in that market, but have my doubts since Delta now has the basic economy crap, so if Delta competes on price, Sun Country will still lose.

  4. As someone who lives in Minneapolis, I am very disappointed. Sun Country and Delta are the only two airlines I use. I tend to go with Sun Country since their prices are almost always better than Delta’s for the same route. Their First Class seat upgrades are also pretty reasonable. Very sad.

  5. As another Minneapolis dweller, very sad, but I understand. Most of us here choose between Delta and Sun Country for domestic flights, and on my last 6 flights I’ve gone with Delta because the price was slightly better or better flight times made up for the higher cost.

    Clearly loyalty of MSP fliers isn’t enough. They need to find a way to differentiate themselves. I just wish this wasn’t it.

  6. How in the heck do you come to the conclusion that JetBlue and Southwest are “unarguably more full service than American, Delta, and United, in terms of their passenger experience.”

    That’s laughable.

    Let’s take Southwest, an airline I fly on occasion:
    * No first class
    * No lounges
    * No advanced seating assignments
    * No interline agreements

    That’s far from a full service passenger experience…and all things the legacy carriers provide.

  7. @Bob I agree. Southwest is hardly full service compared to the legacy carriers. They are an efficient people mover and that’s about it. They certainly play an important role in the domestic market, but I avoid them as much as possible. Fares are rarely any cheaper than the other guys, and for frequent business travelers they don’t really have any perks to offer.

  8. This is sad for Sun Country, as all they’re going to do is alienate their core base. It seems JetBlue (and perhaps mayyyybe Alaska) are the only airlines going upscale.

    @Bob
    Southwest gives you two free checked bags and doesn’t charge to rebook your ticket- benefits far better than giving you the privilege of paying $500.00/yr to access a sad crowded room with snack towers of sadness. I’d say for the average flyer Southwest is a much nicer experience than any legacy carrier.

  9. A friend flew Sun Country first-class and liked it. A couple of years ago, they tried flying Lansing to Washington-Reagan. I think they stopped.

    Sun Country’s frequency has never been enough, in my experience, for a business traveler even though they fly to some of the business cities and not just exclusively to beaches and resorts.

  10. I’m just going to go with that Lucky made a typo and said “unarguably” instead of “arguably” in this line: “[JetBlue and Southwest] unarguably more full service than American, Delta, and United, in terms of their passenger experience.” People are arguing about it.

  11. Even though they pioneered the concept of low cost travel, I would argue that Southwest is now a mid-service carrier. They offer free bags, no change or cancel fees, and a consistent product (which is a big issue at legacy carriers). Yes, I prefer flying on a premium carrier, especially when I get upgraded. But for short-haul travel, there is not really much of a difference flying any other carrier. Southwest has also figured out its market, and for people with the companion pass, they swear by the fact they can fly two people anywhere in the country for the price of one. You know what you will get with Southwest – that is why they are successful

  12. Sun Country has been sort of an ULCC for a few years. When I lived in CA and regularly visited family in NYC, they usually had the cheapest fares, if I was okay with an overnight layover at MSP. In my mind they were always destined to go the ULCC route.

    The one time I flew SY from LGA to MSP, I couldn’t help notice the seats had really thick backrests (five or six inches). They can easily replace these with Slimline seats (already on Spirit and Frontier) and add seats without reducing legroom.

  13. So very sad, just when you think there is an airline that truly understands the concept of REAL service they change the core of their brand. To bad they cannot be the airline that can find a way to make a profit, continue to offer the service provided by employees that appreciate the roots of the brand and extend that quality to each and every passenger. Maybe they need to figure out how to be the Apple of airlines. Those customers are loyal to a fault, but that delivers big returns. Maybe they should look to leadership that knows how to drive brand loyalty, rather than one that leads organization that’s safety and security is more than questionable (always felt it was scary to read what aligiant airline pilots say about working conditions), I guess you get what you pay for. So very sad to know our hometown airline is selling out. Time for me to consider new options.

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