Sun Country Airlines is going public, which seems like a crazy idea during a travel-halting pandemic. But the local Minnesota airline is actually in a good position for an initial public offering.
Why it matters: If Sun Country raises the $100 million it's trying to, it will have enough money to cash out its owners and be able to hire back Twin Cities employees and ramp up service this summer when travel rebounds.
Context: In recent years, Sun Country went from being a mid-priced carrier focused on flying Minnesotans to warm weather destinations to a low-cost airline that diversified by adding a burgeoning cargo business.
- Flashback: Sun Country signed the cargo deal with Amazon in 2019, before the pandemic turned even more people to online shopping. With hindsight, the deal was brilliant.
What they're saying: Paul Vaaler, business and law professor at the University of Minnesota's Carlson School of Management, said Sun Country's transformation over the past few years under CEO Jude Bricker has positioned the airline to be profitable at a time when others aren't.
- "Here's [Amazon], the biggest commercial winner from the pandemic, and Sun Country has a cargo contract with it [that was] made before market conditions went to pot," Vaaler said.
The big picture: While major airlines were losing billions, Sun Country turned a $4.1 million profit in the first nine months of 2020, according to a filing with the SEC .
- Vaaler said Sun Country will be positioned to take market share from smaller rivals that have gone under during the pandemic.
- "Sun Country [is] looking a lot better — though not great — compared to other large airlines bleeding cash and smaller ones in bankruptcy or folded," he said.
This story first appeared in the Axios Twin Cities newsletter, designed to help readers get smarter, faster on the most consequential news unfolding in their own backyard.
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