Long time Twin Cities-based budget carrier Sun Country Airlines is going to have new ownership.
Allegiant Airlines on Sunday announced a $1.5 billion stock and cash transaction. Allegiant is based in Las Vegas and the merger would make for a much larger budget carrier, but still smaller than both Frontier and Spirit according to airline data.
Allegiant said it would maintain a “significant presence” in Sun Country's Minneapolis-St. Paul (MSP) hub. Sun Country CEO Jude Bricker called it an exciting next step in the airline's history by creating one of the 'leading lesiure travel companies in the U.S.'
As for what this means for Minneapolis-St. Paul, where Sun Country is based? Only time will tell says Thrifty Traveler's Kyle Potter who spoke to the WCCO Morning News with Vineeta Sawkar.
"There's always another shoe that drops after airlines make makes moves like this," Potter explains.
Sun Country has long offered a lower cost alternative to the other airline that uses MSP as a hub, Delta Airlines. That competition, says Potter, is important for keeping Delta from overcharging for tickets in the Twin Cities.
Delta Air Lines dominates traffic at MSP Airport, accounting for roughly 70% of all passengers, making it Delta's second-largest hub after Atlanta. Sun Country, like many of the smaller airlines, has turned to a fee-based model, offering cheaper tickets than the major airlines in return for charging passengers for seats, bags and more.
"Whether over time Allegiant will start start to scale things back in Minneapolis in order to grow elsewhere, and if that's what happens, then it's a huge question about what that means for ticket prices. But it doesn't mean anything good," Potter adds.
Potter does say that some of the expected changes coming for the airline, which isn't a full-blown low cost carrier like Allegiant, may not be for the better.
"Allegiant is a little bit of a different animal in that, you know, not just do they have smaller seats and slimline seats that are a little bit more uncomfortable than what you get on Spirit, they also charge for water and soft drinks," Potter explains. "That's something that Sun Country has continued to do. I expect that will go away in relatively short order."
The transaction is expected to close in the second half of this year, pending regulatory approvals.
What once started as a single plane, carrying passengers from Sioux Falls, South Dakota to Las Vegas on January 20, 1983, Sun Country has been the hometown airline for its home hub, Minneapolis-St. Paul International Airport since the 1980s.
Sun Country began flying charters from the Midwest to Las Vegas, Florida, Mexico, and the Caribbean living up to their name by getting travelers to warm-weather destinations.
Now, Sun Country operates 98 routes to 78 airports across the United States, Mexico, Central America, Canada, and the Caribbean.
While the airline has changed ownership several times including the Petters Group Worldwide in 2006, ownership coming out of bankruptcy in 2011 by Cambria, and now by Apollo Global Management, they have continued to call Minneapolis-St. Paul home.
Thrifty Traveler's Kyle Potter talked about what this means for MSP as a hub: "It doesn't mean anything good"
