Interesting Timing: Sun Country Airlines Plans IPO

Flying out of MSP, Sun Country is a bit player at best. I am surprised they have not been swallowed up by Southwest or another carrier. They don't have the best reputation in the market and the area (did those passengers ever get back from Mexico?) so I am dubious. I guess an IPO can be had for an airline that is run out of it's garage - this offices for the airline moved into their hanger at MSP. I am dubious but if it works, great. I still see no reason to fly with them.

While there is risk and it’s gutsy for sure it makes sense. With Reddit investors helping American Airlines a little these past few months it is actually a great time to try to raise capital. I bet that the stock rises significantly after its IPO. (But this is a bet because that’s what a lot of the stock market has become). After the initial hype it will drop back down to earth a little.

Regardless if the intent is to raise capital this will work for them. It will also probably see profits for investors and institutional owners as a result of the IPO.

I think Frontier will be putting themselves in an advantageous position when they take deliveries of the a321 xlr. If they start offering one way $59 barebone fares to Hawaii it could be fierce competition.

"Since Sun Country isn’t publicly traded, we never know quite as much about how the airline is performing compared to some of its peers." - you

We actually do know, if you'd actually read the S-1 filing you'll see earnings have been well ahead of it's peers. While earnings per share dropped from $16.22 in 2019 to $1.62 in 2020, they're still in the green, which is more than what can be said about all of the other U.S. domestic airlines that have filed there annual reports thus-far this year.
The 2019 numbers of $16.22 are fantastic relative to the industry, and that was before Amazon came on board. All things considered, Sun Country has proven their model and market are industry leading in both good and bad times. In my opinion, their stock will perform above average, but more likely they'll be an aquisition target too juicy to pass up.

Given they're far, far reliant on business travel and if they can be nimble like Allegiant Sun Country might do well. They seem to have a niche but as always Wall Street will want them to expand beyond their niche. Can they do it profitability with a bunch of airlines squabbling over what surely will be a smaller customer base for at least a year or two to come?

Don't bet against Jude Bricker when it comes to growing a ULCC without compromising profits. Just look what he did at Allegiant.

Anyone know if there are plans to add other hubs/focus cities outside of MSP?

Apollo Global Management is a Private Equity firm, so if they’re following the SOP of that sector, they’ll have stripped the company of all its assets, loaded it with debt, pumped up short-term profit reports, and is making a killing by selling off a doomed turd or a company.

@Scudder, you nailed it. My advice is don't ever buy anything that's been through the private equity strip mining process. No doubt they've been buffing the numbers (likely fraudulently) for the past 1-2 years to pump this IPO, but the truth is that anything of value in this company was stripped out, sold for profit (to Apollo), with the carcass of the company loaded with as much debt as pension funds were conned into buying, and now they're looking to unload this turd to a greater fool before it comes crashing down.

The reason they're doing the IPO now is probably because they can no longer keep the numbers looking good and/or the debt is about to blow up this whole thing soon, so they need to get out now.

That sounds harsh but study after study has shown that companies exiting the private equity realm significantly underperform their market peers. Anyone buying into this IPO, be prepared for "surprises" to come out in the next year or two, and likely a bankruptcy filing in under 5.

@Lune and @Scudder - I guess Spirit was an anomaly then? They also had a similar story with Indigo.