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Sun Country Removing Surly

Sun Country to launch new fees in October

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In August, a leaked internal memo detailed Sun Country's transition to an ultra low cost carrier (ULCC). According the Star Tribune, that transition will begin next month and several other changes will be implemented over the next year.


October Changes (and fees) 

Sun Country will begin selling new fares in October, which will include a new fee for the use of overhead bin space. This is a significant change as carry-on bags were previously free, but it falls in line with the Basic Economy fares offered by competitors American & United.

If competitors are any indication, the Sun Country fare price will drop slightly (or not at all), and passengers will have to pay more for the carry-on that they previously got for free. The new fees are a significant new source of profits for airlines.


New Seats (and fees) 

In the next year, Sun Country will spend $10 million to remodel their aircraft with new thinner seats (with less legroom). The current Sun Country configuration is 162 seats, and the remodel will add 18 more seats upping the total to 180 seats. Once the remodel is complete, Sun Country will begin to charge for seat assignment.


New Markets 

CEO Jude Bricker said the airline is looking at launching in new markets such as New York, San Francisco, and Boston. Sun Country would offer leisure routes from these destinations, directly competing with Alaska, JetBlue, and United.

Mr. Bricker stated that starting in 2019, Sun Country hopes to increase its fleet size by 6-8 aircraft per year, which is significant growth from its current fleet of 22 aircraft.


First Class Cuts

Sun Country's First Class product has gotten positive reviews due to its above average catering. Sun Country currently spends $15 million per year on catering and only gets back $3 million from in-flight sales. Sun Country plans to cut costs by allowing First Class passengers to pre-order their meals, cutting down on waste.

According to Sun Country's owner Marty Davis, the airline has served the same meals regardless of the length of the flight, which results in significant waste. Based on his statements, I would expect catering to be curtailed next year, especially on shorter flights.


The next Spirit?

My primary concern since the announcement, has been that Sun Country would become the next Spirit Airlines. According to CEO Jude Bricker, the difference between Sun Country and other ULCC's will be the “human touch” that Sun Country is beloved for having.

I assume Bricker is referring to Sun Country's employees, of which many are long-term veteran employees. The good news is only a few longer term employees took the buyout offer that was announced last month. These employees will be key in maintaining Sun Country's culture during this time of transition.


Bottom Line 

The core of the Sun Country product has been cheap tickets and solid hometown service. A lot of Sun Country fans will be watching how the company rolls out many of the changes in the next year. Let's hope Sun Country preserves the recipe which has endeared them as Minnesota's hometown airline.

Editorial Disclaimer: Opinions expressed here are the author’s alone, not those of any bank, credit card issuer, airlines or hotel chain, and have not been reviewed, approved or otherwise endorsed by any of these entities.

Disclaimer: The responses below are not provided or commissioned by the bank advertiser. Responses have not been reviewed, approved or otherwise endorsed by the bank advertiser. It is not the bank advertiser’s responsibility to ensure all posts and/or questions are answered.

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