Sun Country Airlines is in trouble. Its former chairman resigned and was arrested last week. Now it says it might shut down by Dec. 1.
In a letter sent to employees, John Fredericksen, the airline’s general counsel, called the airline’s situation a “serious financial crisis.”
Should Sun Country not be able to obtain additional financing or obtain relief from our major creditors in the near future, there is a distinct possibility that the airline will be shut down and/or you will be furloughed.
So how serious is this, and what does it mean for people with travel plans on Sun Country?
Another airline expert interviewed by the Minneapolis Star-Tribune believes the airline will keep flying, adding that he wouldn’t hesitate to book a ticket on Sun Country.
I was interviewed in the same story, and my advice was to “proceed with caution.” I think there’s a very real possibility that Sun Country will close permanently.
What’s more, banks and credit card companies get really funny about tickets purchased on liquidated carriers. Although the Fair Credit Billing Act protects purchases made up to 60 days ago, credit card dispute departments have been known to punt to a bankruptcy court when an airline goes belly-up — meaning the insolvent company keeps your money and you become a claimant in bankruptcy court. And that means you’ll only recover pennies on the dollar, if that.
I hope I’m wrong about Sun Country.
{ 5 comments… read them below or add one }
I am not the least bit surprised by this and I don’t think you’re wrong, Chris. Another one bites the air.
Considering they’ve been having troubles meeting payroll, I am not surprised by this.
Oh, Crap! They are the primary charter airline for Apple, Funjet and Worry-Free Vacations from DFW, which accounts for about 75-80% of our leisure bookings to Cancun! Hopefully it is early enough to find another charter airline for the 2009 season……
http://biz.yahoo.com/ap/081006/sun_country_bankruptcy.html?.v=2 Well they have filed for bankruptcy protection now, but sounds like they hope to keep operating.
“Should Sun Country not be able to obtain additional financing or obtain relief from our major creditors in the near future…” from who? Either creditors aren’t even around any more or they are too afraid to lend to anyone, especially other creditors.
“You’re thinking of this place all wrong. As if I had the money back in a safe. The money’s not here. Your money’s in Joe’s house…right next to yours. And in the Kennedy house, and Mrs. Macklin’s house, and a hundred others. Why, you’re lending them the money to build, and then, they’re going to pay it back to you as best they can. Now what are you going to do? Foreclose on them?…Now wait…now listen…now listen to me. I beg of you not to do this thing. If Potter gets hold of this Building and Loan there’ll never be another decent house built in this town. He’s already got charge of the bank. He’s got the bus line. He’s got the department stores. And now he’s after us. Why? Well, it’s very simple. Because we’re cutting in on his business, that’s why. And because he wants to keep you living in his slums and paying the kind of rent he decides. Joe, you lived in one of those Potter houses, didn’t you? Well, have you forgotten? Have you forgotten what he charged you for that broken-down shack? Here, Ed. You know, you remember last year when things weren’t going so well, and you couldn’t make your payments? You didn’t lose your house, did you? Do you think Potter would have let you keep it? Can’t you understand what’s happening here? Don’t you see what’s happening? Potter isn’t selling. Potter’s buying! And why? Because we’re panicky and he’s not. That’s why. He’s picking up some bargains. Now, we can get through this thing all right. We’ve got to stick together, though. We’ve got to have faith in each other. ”
Welcome to Potterville