LAS VEGAS -- Minnesota-based leisure carrier Sun Country will transition toward an ultralow-cost (ULCC) fare model beginning in January, CEO Jude Bricker said at Boyd Group's International Aviation Forecast Summit on Monday.

The company will also begin broadening its Minneapolis-based network to include more origin cities next summer.

Sun Country plans to implement fees for checked bags starting in January, Bricker said. The fee has not yet been determined.

The carrier will eventually charge for seat selection, but plans to continue to offer free water and soft drinks for all passengers.

Sun Country's move toward an ultra-low-cost model comes as the carrier has struggled with low single-digit profit margins over the past few years, even as network carriers have posted double-digit margins and ultra-low-cost carrier Allegiant has posted margins as high as 35%.

It also comes on the heels of the July hiring of Bricker, who came to Minneapolis from Allegiant, where he was chief operating officer.

"The way to get a low fare is to charge for the optional services that we are otherwise giving away for free," Bricker said.

Sun Country currently flies 45 routes, with most of them going from Minneapolis to warm-weather leisure destinations in the U.S., Mexico and the Caribbean.

Bricker said the carrier won't make a full move to the ULCC. It will maintain a first-class cabin on its fleet of Boeing 737 aircraft, but will reduce the 12 first-class seats to six and scale back the first-class food service.

Overall, Sun Country will increase the number of seats on its 737-800 aircraft from 162 to 180. In so doing, it will decrease the standard space between rows, called pitch, on coach seats from 32 inches to between 29 and 30 inches. Slim-lined seats will be put in to lessen the impact of those reductions, Bricker said, and a mid-level product with 32 inches of pitch will be offered on all flights.

Bricker said that reconfiguring Sun Country's 22 aircraft would take about a year.

He acknowledged that changing the carrier's product will upset some of its customer base in Minneapolis, but said that change is essential.

"The biggest risk is doing nothing," Bricker said. "It's not working."

Along with the changes in aircraft and service, Sun Country will diversify its network beyond Minneapolis.

Bricker said the carrier would add routes to its some of its existing warm-weather destinations from other midsized Midwest origins, such as Cincinnati, Milwaukee and Indianapolis.

In addition, Sun Country will leverage the flexible lease deals it already has in place on a portion of its 737 fleet to jump in and out of high-demand leisure markets in-season. For example, Sun Country will likely fly from Los Angeles to Hawaii next summer, Bricker said. And it plans to run routes from major Northeast markets to Florida during the 12-week season between February and Easter.

Expanding outside of Minneapolis-St. Paul, explained Bricker, will leave Sun Country less vulnerable to Delta, which has a hub in the Twin Cities, and less vulnerable to the growing Minneapolis presence of Frontier and Spirit.

"We have to diversify," Bricker said. "Ninety-five percent of our network originating in Minneapolis isn't a defensible position."

Sun Country, he said, won't grow as quickly as the other ULCCS have, in large part because those carriers have already filled in the U.S. map with low-cost service.

Plans call for Sun Country to increase its fleet size from 26 aircraft to 55 in 2022.

The carrier also plans to maintain a significant presence in the GDSs, differentiating it from Bricker's former employer, Allegiant.

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