Restructured Ultra-Low-Cost Carrier Sun Country Airlines Emulating Allegiant Air with New Routes and Business Model

Sun Country Airlines, based just outside of Minneapolis-St. Paul, has always been somewhat of an enigma in the airline industry. With the airline industry undergoing massive consolidation over the past two decades, smaller regional airlines have vanished as they merged with larger airlines. Other smaller-sized air carriers attempted to restructure as low-cost carriers noting a shift in consumer trends towards cheaper fares. Some airlines like Spirit, Frontier, and JetBlue, successfully restructured or launched using this structure allowing them to survive liquidation or consolidation. Sun Country Airlines, however, continued to operate as a full-service carrier until just recently.

Catering almost exclusively to the Minneapolis-St. Paul-market, Sun Country Airlines flew a small mostly domestic route network focusing on leisure routes from the upper-Midwest to tropical destinations. The airline also offered inexpensive premium trans-continental fares with connections in Minneapolis. Seeing little in the way of profits and almost collapsing in 2016/2017, it was obvious that Sun Country Airlines’ days were limited unless it completely overhauled its existing business structure.

In August 2017, long-standing rumors were confirmed when Sun Country Airlines announced that it would restructure as an ultra-low-cost carrier. Little was revealed regarding the airline’s new business model. The new Sun Country would still be based in Minnesota but would no longer offer first class, would stop selling all-inclusive fares, and would add more seats to its fleet of Boeing 737s. Over the next 8-months, only small details surrounding the newly restructured airline were announced.

Now, almost a year later, Sun Country Airlines has revealed its first round of new routes. These new routes, fitting of a low-cost leisure carrier, also emulate a competitor, Allegiant Air. Here are the new routes and what they mean for the new Sun Country Airlines.

Sun Country Airlines – New Routes

The four US cities that will see new or increased Sun Country Airlines service are Dallas-Forth Worth (DFW), Madison, Wisconsin (MSN), Portland, OR (PDX), and St. Louis-Lambert International Airport (STL). All new Sun Country service is seasonal and operates on select days of the week.

Legend: Monday (M), Tuesday (T), Wednesday (W), Thursday (TR), Friday (F), Saturday (S), Sunday (SN) – Indicates days of service

From Dallas-Fort Worth (DFW)

• Ft. Myers, FL (RSW) – Begins October 3, 2018 (W, S)
• Tampa, FL (TPA) – Begins October 5, 2018 (M, F)

From Madison, WI (MS)

• Ft. Myers, FL (RSW) – Begins September 28, 2018 (M, F)
• Tampa, FL (TPA) – Begins September 29, 2018 (W, S)

From Portland, OR (PDX)

• Honolulu, HI (HNL) – Begins November 14, 2018 (W, TR, S, SN)
• Las Vegas, NV (LAS) – Begins November 1, 2018 (M, F)
• Palm Springs, CA (PSP) – Begins November 1, 2018 (TR, SN)
• Phoenix, AZ (PHX) – Begins November 14, 2018 (M, W, F, S)
• Reno, NV (RNO) – Begins November 16, 2018 (M, F)

From St. Louis (STL)

• Ft. Myers, FL (RSW) – Begins October 3, 2018 (W, S)
• Tampa, FL (TPA) – Begins November 1, 2018 (TR, SN)

Imitating Allegiant Air, Sun Country’s New Routes

Sun Country’s new routes don’t just imitate Allegiant Air with regards to the cities served but also the frequency in which each route is operated. Unlike traditional airlines, the majority of these routes are only served twice weekly. As these routes are seasonal leisure flights, Sun Country does not have to offer daily service to cater to business or connecting traffic demand. This is a hallmark characteristic of the Allegiant Air business model.

Allegiant Air, another US-based ultra-low-cost carrier, uses older Airbus and McDonnell-Douglas aircraft fitted with more seats than other airlines, to operate a handful of domestic leisure routes daily. Some routes are flown just once or twice a week. Low aircraft utilization hasn’t been a problem for Allegiant Air just yet as the airline as kept lease costs down given the age and condition of the aircraft they operate. This raises concerns for Sun Country in the future should the airline continue to operate point-to-point leisure routes with a fleet of Boeing 737s.

While these new routes certainly fit the profile of an ultra-low-cost leisure carrier, they are somewhat of a head-scratcher. Many of these routes, especially those to and from South Florida, are already flown by multiple other airlines. Some of these airlines also offer low fares using an ultra-low-cost model. For example, American Airlines, Southwest Airlines, and Spirit Airlines serve both Ft. Myers and Tampa from the Dallas Area. In St. Louis, Allegiant Air, Frontier, and Southwest Airlines also serve Ft. Myers and Tampa. Finally, in the Portland Area, Alaska Airlines and Hawaiian Airlines both serve Hawaii extensively. Nonetheless, these markets, as well as the Madison, WI market, could always benefit from additional capacity on leisure routes.

The largest takeaway from Sun Country’s route announcement is the airline finally indicating its commitment to restructuring as an ultra-low-cost carrier. These routes are a great indicator of the airline’s future. Sun Country will likely continue to emulate Allegiant Air, offering point-to-point flights to leisure and vacation destinations while also allowing passengers to book vacation packages in conjunction with cheap flights. Whether or not the airline and its owners can successfully operate these new routes and operate them profitably is another story.

Overall, Sun Country Airlines New Routes

I personally did not see this restructuring ever taking place. Sun Country Airlines faced very bleak conditions just months ago leading me to conclude liquidation was imminent. Though ultra-low-cost carriers are typically very profitable and operate route networks conducive to quick route changes, the question remains, “Does the US really need another ultra-low-cost vacation airline?”

What do you think of the new Sun Country Airlines? Would you take advantage of any of these new routes?

• See Sun Country’s full press release and introductory fares using this link.