In recent history, Sun Country has been an afterthought. It was a small airline that during the best of times was marginally profitable. It focused almost entirely on flying people from Minneapolis to… everywhere. Things have been slowly changing under new leader Jude Bricker. We’ve heard Jude talk about what he wants to do, but now we’re seeing the network strategy really ramp up. “Strategy” may be a loose word. The airline’s strategy appears to be looking for any random opportunity that nobody else is taking.
In a recent article about Sun Country, Skift lays out the vision for the airline. This squares with what Jude has said about the airline since he took over. He wants it to be chasing highly-seasonal demand on a variety of routes. If you’re looking for a long-term, coherent network strategy, you won’t find it. Airplanes will move with the seasons, or as I described it last year…
But how has this played out? Well, there’s certainly a big difference in the network by seasons. That, however, has historically always been the case with Sun Country. During the winter, the network focused on north/south from Minneapolis down to warm weather spots. During the summer, it morphed into more of an east-west network going to big tourist spots.
That basic idea still seems to be in place, but it has now expanded far beyond Minneapolis. Let’s start with a look at the first big schedule that went into place under Jude. Here are the routes that were announced as new for the spring/summer of 2018.
Jude had said previously he wanted to become a “spill” carrier, basically skimming the passengers that other airlines wouldn’t carry because they were full of higher fares. That’s not something that has historically been a profitable venture for any airline. (When demand tanks, there’s very little demand left to spill.) But for now, it’s a strategy that can work on some routes.
Routes, for example, like Seattle to Anchorage and LA to Honolulu are bottomless pits during the summer. And the rest of these are more popular summer routes as well. I get it.
But now let’s move into what was launched in the fall/winter schedule of 2018/2019. Here that is:
As you can see, this map is far more north/south in nature. There’s a lot of Florida along with the desert Southwest. But what you also see here is the addition of a couple of new focus cities beyond Minneapolis to the network. Nashville and Portland in particular stand out as new spots where Sun Country wants to focus. In the winter, these cities still get routes that warm people up, following the demand. It’s not like Sun Country is hiding this fact. Just look at the headlines on two press releases about those cities.
- SUN COUNTRY AIRLINES BEGINS SERVICE FROM PORTLAND INTERNATIONAL AIRPORT TO WARM WEATHER GETAWAYS ACROSS THE WEST COAST
- SUN COUNTRY AIRLINES BEGINS SERVICE FROM NASHVILLE INTERNATIONAL AIRPORT TO WARM WEATHER GETAWAYS ACROSS THE COUNTRY
But that was winter. Now it’s time to look at the upcoming spring and summer, so let’s see what new routes Sun Country recently announced for that.
Apparently (and unsurprisingly), Anchorage and Honolulu worked to the point where they get new origin cities this summer. Those are still spill markets. And Sun Country seems to think there’s a lot more spill opportunity in Minneapolis as well. Look at markets like Philly, Newark, and Chicago. These are big markets with multiple airlines already in them. In the winter, this would be a bad move for Sun Country because there’s too much capacity in the back of the bus. But in the summer? All those Minnesota families that want to go somewhere on vacation can do it for cheaper than on the other airlines.
But as much as Jude likes to talk about being a spill carrier, there are routes in here that don’t fit that model at all. A lot of these appear to be very similar to what Frontier and Allegiant have been doing recently, connecting mid-size markets that don’t have service today. Think about places like Nashville to Providence and Portland. Or Portland to San Antonio. What’s that all about?
It certainly contradicts what Jude said in that Skift article. He was quoted as saying, “We would go and do what Spirit and Frontier have already done, but they are already doing it.” It seems a more accurate quote would add,”…but if those airlines miss a spot, we won’t hesitate to try it out.”
So what is the overall strategy? It seems to be one of just pure opportunism. Right now, that’s a winner because demand is robust and opportunities abound. But what happens when the economy goes down and demand falls? Considering how spill carriers have fared previously, I remain concerned. The one thing Sun Country has going for it is that it can move airplanes and switch routes very quickly, far better than airlines in the past who have tried this strategy. It’s just not clear how many places can provide a profitable home for those airplanes when things get ugly. That will be the true test of whether this model is sustainable or not.