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- The Airline That Rose From The Ashes 🛩️
The Airline That Rose From The Ashes 🛩️
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Finlay Williams
September 06, 2024
2 minute wacky businesses, you can tell your buddies about 🧠
Imagine you’re running a small, regional airline that’s already struggled through bankruptcy, a ponzi scheme scandal and ownership changes. Then, just as you’re starting to build momentum, the world shuts down because of a pandemic. What do you do? Most airlines hunkered down and prayed for the storm to pass, but Sun Country Airlines played the game differently - they got an Amazon Prime side hustle.
Source: Google Trends
Ponzi Schemes and Cargo Deals 🧐
Sun Country isn’t just another budget airline. They’re a brilliant example of a company that’s repeatedly faced adversity, pivoted hard, and managed to outsmart bigger competitors. With over $1 billion in annual revenue, this airline isn't just flying vacationers to Cancun, they're also delivering your Prime packages across the U.S. This is the sort of agility that simply doesn’t exist across the aviation industry.
Sun Country has gone through some rough patches (like their bankruptcy in 2008 after owner Tom Petters’ Ponzi scheme imploded), but their comeback stories are legendary. After being bought out of bankruptcy by the Davis family (owners of Cambria countertops), they restructured and then were sold again to Apollo Global Management where they went on to dominate.
What are the nuggets? 💎
🛩️ Origin: Founded by ex-Braniff employee Jim Olsen (also chief pilot in the beginning) in 1982, Sun Country’s bread and butter is flying vacationers to warm destinations.
🛩️ A series of various owners: Sun Country’s first major collapse in 2001 halted operations. In July 2006, the airline was acquired by Petters Group Worldwide and Whitebox Advisors. The financial crash in 2008 caused another bankruptcy which was even messier, and tied to Tom Peter’s Ponzi scheme.
🛩️ Ponzi Scheme Scandal: In 2008, Sun Country found itself entangled in a massive scandal when its then-owner, Tom Petters, was charged with running a multibillion-dollar Ponzi scheme. Petters used funds from his fraudulent activities to prop up his business empire, including Sun Country. When the scheme collapsed, the airline was forced to file for bankruptcy a second time. It wasn’t until 2011 when they were bought out of bankruptcy for $34 million by the Davis family. Trouble continued despite this, Sun County had a net income of $27 million in 2015, followed by $16 million in 2016.
🛩️ It didn’t work this time either: In 2017, the Davis brothers announced they would be selling the airline to Apollo Global Management for an undisclosed amount. After years or strategic changes, nothing was sticking and Sun Country was being passed around like a hot potato.
🛩️ Pivotal Moment: The 2020 pandemic was a disaster for the travel industry, sparking what was known as an aviation recession. But Sun Country decided to zig when everyone else zagged. In 2019, Amazon Air bought a minority stake in Sun Country from Apollo, with intentions of using the fleet of planes for cargo shipments in the vacation off season. This move is inevitably what got Sun Country through the 2020 pandemic and turned it into a successful business.
🛩️ Funding & Ownership: After being bought by Apollo in 2017, they IPO’d in 2021, raising $218 million. In 2022 their revenue was higher than pre-covid. So they not only survived but thrived during the aviation recession.
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