In the summer of 2017, as its profit margins lagged the industry, Sun Country brought in former Allegiant Air COO Jude Bricker as CEO to transform the Minnesota-based airline into an ultralow-cost carrier and to diversify its network beyond its Minneapolis home. Since then, Sun Country has added routes and put more seats on aircraft, among other measures. Airlines editor Robert Silk caught up with Bricker at the CAPA Centre for Aviation Americas Summit in Denver to discuss how the transformation is coming along.
Q: Tell me about your progress 18 months after you announced the Sun Country makeover.
Jude Bricker
A: The major initiatives haven't changed. We've modified the aircraft for a high-density configuration. We have all new seats. We've standardized the cabin -- layouts are all the same. We also added amenities for our guests.
Q: You're also updating your digital offerings, right?
A: We had an app when I got here and our website, but they were locked into ownership from a third party. So I couldn't change anything. We're in the process of taking that back over. In June, we are launching a booking platform. Right now, when you book an itinerary on Sun Country, you can't change or modify your itinerary. You have to call the call center. That's a bad experience. We're going to fix that. Right now, you can't check in at a kiosk. We do offer mobile check-in, but if you're checking a bag, you have to talk to humans. We need to catch up.
Q: How are you doing as far as route diversification and expansion?
A: We've doubled the number of routes. We have 85 routes. Ninety percent of our routes are seasonal. That includes summer and winter routes. Network development is going about as we had expected. It's largely driven by fleet. From a revenue perspective, we are right on track with producing the amount of revenue that we had thought we would. This year we'll produce just over $700 million in revenue. On a unit cost, we're just about where we thought we would be. And by the end of this year we will be competitive with Spirit and Frontier.
Q: How does your core niche differ from that of Spirit, Allegiant and Frontier?
A: I would say our business is going to be more analogous to JetBlue. We're taking leisure customers on a very seasonal demand pattern. We're focused on vacationers that are traveling on leisure. Particularly this time of year in Minnesota, we offer about 50 destinations for people to get out of the snow and into the sun. We're adding eight markets in Minnesota this year. It's going to be 10% growth, or something like that.
Q: What about the diversification you talked about beyond Minnesota?
A: Outside of the Minnesota market we are growing where we originate customers from other markets. We are doing Madison (Wis.) to West Florida. We are doing St. Louis. We are doing Nashville. We are doing Dallas, Portland (Ore.) and Providence (R.I.). And these are markets where we'd like to build a brand over time. I'd consider that our focus-city strategy. We also do what we would call scraping. Think of markets that have extreme seasonal demand; the most obvious is Los Angeles to Honolulu. Fares roughly double between Memorial Day and Labor Day. The reason is there are not enough seats in that market for a demand pattern that is incredibly seasonal. We think we can come in and offer service. There are six incumbent carriers. No one's going to care if we operate four weekly flights. And we can operate at very high margins.
Q: In these spot markets, how do you get attention?
A: That's a specific response to demand. People are shopping for price. They use metasearch, they use GDS, they use Expedia and when they look, we're at the top with costs.
Q: At the end of the last winter flying season a Minnesota blizzard resulted in you stranding customers in Mexico, which led to a lot of bad press. What did you learn from that, and what have you implemented as a result?
A: Well, we have a work-from-home program for our call center attendants so that they can still be working, even in a blizzard. And we are implementing technology solutions. When you are affected by a canceled flight, you get an email. Do you want your money back? Do you want to take advantage of any of these other flight options? That is dependent on our new tech initiatives. We're working on getting that out to the customers. Another thing we've done is that on the last flight of the season, everyone gets travel insurance.