Things With Wings

The Commercial Aviation Blog
See All Posts
  • Who Wants To Buy Sun Country?
    Posted by Andrew Compart 10:55 PM on Mar 09, 2011

    As recently reported in Aviation Daily, Sun Country parent MN Holdings is actively looking for buyers for the Minnesota-based low-cost airline, which just emerged from bankruptcy, and a recent court filing made it sound as if MN is close to reaching a deal. In that filing a trustee for a company with a minority interest in MN said the holding company was "anticipating accepting a letter of intent from a proposed purchaser shortly."

    Well, perhaps not so fast. At a court hearing yesterday, as reported by the Star Tribune in Minneapolis, the same trustee described the talks as "intense and continuing." He also said that multiple parties are interested in a deal but that talks are focused on one single party at the moment, and that the rising fuel prices could make a deal more difficult.

    All that said, who would be interested in acquiring Sun Country, beyond other private investors? I'm not hearing anything concrete--and neither are Sun Country pilots, from what I've been able to gather. Everything has been speculation. In that vein, I'm only mentioning this as a point of interest: last fall an airline analyst suggested Southwest should consider it.

    This does make some sense. Southwest would like to expand at Minneapolis-St. Paul Airport, where Sun Country is based, and it has been known to use this method before: it acquired ATA for its Chicago Midway assets, and access to Atlanta's airport is the biggest reason for its desire to acquire AirTran.

    Also, as noted by the analyst--Hunter Keay of Stifel Nicolaus--Sun Country operates next generation Boeing 737 aircraft, just like Southwest. Most of them are the larger -800, which Southwest recently decided to acquire from Boeing. Southwest believes it could end up with 50 to 100 of them. Nicolaus also offered some other reasons a deal could make sense, particularly Sun Country's historically stronger performance in the first quarter of each year.

    Sun Country is small--it currently operates three 737-700s and eight 737-800s--so it would not be a huge undertaking for Southwest. On the other hand, Southwest is already in the process of acquiring Southwest--awaiting Justice Department clearance and AirTran shareholder approval. It also has to worry about integrating its pilots group, represented by the Southwest Airlines Pilots Association, and AirTran's, represented by the Air Line Pilots Association. Throwing another airline into this mix (with pilots also represented by ALPA) does not seem like a great idea. Nicolaus made his case for a Southwest acqusition of Sun Country just before Southwest revealed its deal to acquire AirTran, so circumstances certainly have changed.

    Which, as I said, is why I'm only mentioning this as a "point of interest."

    Tags: tw99, SunCountry, Southwest

  • Recommend
  • Report Abuse

Comments on Blog Post