Company To Complete Deferred Wage Repayment... Including
Maybe they should call it "Lazarus" Airlines... though,
admittedly, the marketing angle would likely be problematic.
All-but-written off for dead less than a year ago, Sun Country
Airlines announced Thursday a record first quarter net income of
$8.1 million. This compares to a net loss of $8.3 million in the
first quarter of 2008.
"We are pleased with the record financial performance and the
success of our turnaround to date," said Stan Gadek, chairman and
CEO. "“I am very proud of the hard work and determination of
every person on the Sun Country team. They deserve full credit for
these outstanding results and having overcome significant
challenges during the past year."
First quarter operating income was $9.8 million and operating
margin was 15.3%, both representing all-time records for the
airline. Contributing to the operating income were significant
year-over-year gains in charter and ancillary revenue as well as an
8.3% increase in passenger unit revenue to 8.31 cents per available
As ANN reported, fortunes turned decidedly
against Sun Country last year, when parent company Petters
Aviation, LLC filed for Chapter 11 bankruptcy protection on October
6. The capitulation came about two weeks after the offices of
Petters Group Worldwide were raided by federal agents. Company
founder Tom Petters resigned as chairman of Sun Country's board of
directors soon afterward, under clouds of accusation and a strong
whiff of corporate malfeasance.
Despite the turmoil, Gadek asserted his airline would continue
flying... though employees were asked to accept two rounds of pay
cuts through the end of the year, as the decline of Petters tanked
the airline's chances of securing outside loans to cover regular
payroll. At the time, Gadek promised those cuts would be
short-lived... and that's proven to be the case.
The company also announced Thursday it will complete the
repayment of employee deferred wages on April 22. This will
represent the fifth and final payment and will include 3% interest
on the amount of deferred wages. "We have an outstanding employee
group and I am pleased to return their wages with interest which
they contributed to the company," Gadek said.
During the first quarter, Sun Country’s operating unit
costs declined 5.9% to 8.06 cents per available seat mile as a
result of lower fuel costs and improved cost controls and
efficiencies. Load factor or the percentage of filled seats
increased 8.3 points from 71.5% in the first quarter 2008 to 79.8%
in the first quarter 2009.