Discounter Sun Country Airlines Inc., which is desperately trying to outrun the grim reaper, is preparing to ask its home state of Minnesota for as much as $50 million in aid to help it deal with sky-high fuel prices.
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Sun Country, according to the Minneapolis Star Tribune, hosted a dozen legislators at its headquarters earlier this week to make its pitch for aid. The carrier, which lost $43 million on sales of $243 million during the 12 months ending in March, according to the report, insisted it is not on the brink of bankruptcy. But with fuel prices double what they were a year ago and ticket prices up only 17%, Sun Country like all airlines is struggling to stay aloft.
The airline, which argued to the state that its presence saves consumers about $225 million annually as the result of lower airfares, insisted it is not looking for a handout, saying that the assistance could come in the form of loan guarantees.
Sun Country proponents argue that the state provided in-state rival Northwest Airlines Corp. almost $400 million in aid during the 1990s. But that experience, if anything, could temper the state's eagerness to provide further assistance.
In return for the aid Northwest received, the airline pledged to keep its headquarters in Minnesota. With Northwest now slated to merge with Atlanta-based Delta Air Lines Inc., the airline could be forced to pay back the $245 million remaining on assistance loans should Delta retain its Georgia headquarters, as expected. - Lou Whiteman
See Star Tribune story on Sun Country's request
See Dealscape post on Sun Country's troubles
See Dealwatch: Airlines
