Tuesday, October 07, 2008

Sun Country Bankruptcy; Mesa Slashing Jobs

The company that owns Minneapolis-based Sun Country Airlines filed for Chapter 11 bankruptcy protection yesterday. In a statement, the company said:

"Petters Aviation and its subsidiaries, including MN Airlines, LLC, d.b.a. Sun Country Airlines, filed for protection under Chapter 11 of the United States Bankruptcy Code. Sun Country Airlines will continue to operate and fly its regular flight schedule.

Stan Gadek, Chairman and Chief Executive Officer of Sun Country said, "We were forced to take this action as a result of recent events at Petters Group Worldwide. We do not anticipate any disruptions, and expect to operate business as usual... Customers can book their flights in confidence and know that they will continue to receive the great service that they are accustomed to on Sun Country."

I'd take issue with that "book with confidence" assertion. Make it, book with caution. And remember: If you do book on Sun Country, use a credit card because by law credit card charges are refundable for services not rendered, such as a flight that disappears if an airline suddenly goes belly-up. If you book with a debit card, or pay with any other form of currency, you are not covered.

And incidentally, the "recent events at Petters Group Worldwide" is a reference to an FBI raid last month on Petters headquarters.

Petters Aviation is a wholly owned unit of Thomas Petters, Inc., and owns MN Airline Holdings, Inc., the parent company of Sun Country Airlines.

MESA AIR, meanwhile, is "reducing staff across the board," its chairman, Jonathan Ornstein, told ATW Online, an aviation news site. Facing a projected $250 million drop in revenue this year, Mesa Air Group is finding it impossible to "support the same level of overhead," Ornstein said, without adding details.

For August, Mesa reported a 13.9 percent drop in revenue passenger miles flown on an overall drop of 24.5 percent in total passengers boarded. Delta Air Lines dropped its contract with Freedom Airlines, a Mesa unit, in August.

Mesa currently operates 159 aircraft with over 800 daily departures to 126 cities, 38 states, the District of Columbia, Canada, the Bahamas and Mexico. Mesa operates as Delta Connection, US Airways Express and United Express under contract with Delta Air Lines, US Airways and United Airlines, respectively, and independently as Mesa Airlines and go!, the Hawaiian carrier that links Honolulu to the neighbor-island airports of Hilo, Kahului, Kona and Lihue.


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