Sun Country To Go Public
Sun Country Airlines filed a Form S-1 with the SEC today (this one, not that one), declaring its proposed initial public offering (IPO) of common stock. The number of shares it plans to offer and the price has not yet been determined. The airline proposed to list its stock under the ticker symbol “SNCY” because the market is incapable of using the image of the “Endless Summer” movie poster as requested.
Barclays, Morgan Stanley, and Deutsche Bank Securities will serve as joint lead bookrunners, and Goldman Sachs & Co. LLC and Nomura will serve as joint bookrunners for the offering. Apollo Global Securities will serve as a co-manager.
The rather innovative submission was rejected by the SEC originally, because investors would have been required to pay an extra 50 cents per share to sell the stock as well as a 10 cent per share fee to have it actually in your portfolio and a 15 cent per share fee to see it in the broker’s online portal. Investors who wanted a glass of water or small snack while owning the stock would also be required to pay an extra 35 cents per snack per share.
Allegiant Goes Hog Wild Adding New Routes
Allegiant Air announced 34 new routes it would operate this summer including nine limited, dedicated routes to Rapid City, SD (RAP) for the nearby Sturgis Motorcycle Rally.
During the first week of August, Allegiant will introduce service to Rapid City from nine cities across the country. Most people attending the rally in Sturgis ride their motorcycles to the event, as it doesn’t make a lot of sense to attend a motorcycle rally without a motorcycle. To that end, the airline will allow those flying to Rapid City to check their motorcycles for free provided the passenger consents to allowing ground staff to siphon the gas out of the motorcycle to be used in the plane’s tanks for the flight.
In addition to the short-term Sturgis routes, Allegiant is adding another 25 routes including a build-up of Portland, OR, and Key West– two of the three new destinations it announced last month. Des Moines (DSM), where Allegiant announced last week it would open a base is also seeing an increase in flights this summer. Portland is seeing four new routes including Des Moines which is adding three and Key West which gets one more city – Cincinnati.
Other additions include Allegiant’s traditional point-to-point service between random city pairs including Appleton, WI (ATW) to Savannah, GA (SAV) which begins May 28.
Southwest Spills the Beans on Rapid Rewards in Government Filing
Southwest Airlines filed its annual SEC 10-K today (again this one, not this one), and revealed details about its Rapid Rewards program in the filing.
Southwest has had a higher percentage of travelers flying on award redemptions than its domestic competitors for several years, but during the pandemic, Southwest saw the percentage of passengers flying on award tickets increase from 14.1% in 2019 to 15.8% in 2020. The increase can be pointed to several factors including cash being tighter for many in 2020 and Southwest’s hassle-free, full refund policy when changing or canceling an award redemption.
Southwest currently has about $4.4 billion worth of unredeemed points on its balance sheet. If it wanted, it could convert those at a 1:1 ratio to Delta SkyMiles, which would be just enough to purchase a round trip domestic redemption from Baton Rouge to Fort Wayne via Atlanta for a family of four. Its number of unredeemed points grew during 2020, which is not a surprise considering redemptions were down 62% during the pandemic.
Southwest pre-sold $600 million worth of points to Chase during Q4 2020. The figure represents the amount of points it expected to be purchased in 2021, so the deal simply was Southwest getting an advance on payment from Chase. Chase neglected other overtures from the airline including the sale of first class upgrade vouchers and comp tickets to all of Southwest’s European destinations. (via View From the Wing)
Air Canada to Furlough 1,500 & Suspend 17 Routes
With Canada enacting stricter border controls and a lack of travel demand due to both the pandemic and the fact it’s winter in Canada, Air Canada has informed 1,500 employees that they will be furloughed as part of another temporary reduction of the airline’s workforce.
Air Canada has been hit hard by the Canadian government’s suspension of flights to Mexico and the Caribbean. The directive led to AC’s shuttering of its Air Canada Rouge subsidiary for the indefinite future. With this round of cuts, Air Canada has reduced its workforce nearly in half since the onset of the pandemic, from approximately 40,000 staff to just 20,000.
In addition to the furloughs, Air Canada is suspending 17 routes beginning next week. Toronto/Pearson will see the bulk of the suspensions with five U.S. destinations and six international flights axed. Four of the overseas destinations having service suspended: Bogotá, Dublin, Tokyo/Narita, and São Paulo/Guarulhos, will continue to see Air Canada cargo operations, despite the lack of passenger service. After all, Canadians need their Guinness and Japanese whisky.
Sunwing Airlines Receives Takeover Offer
Canadian carrier Sunwing Airlines received a takeover offer from an unnamed potential buyer this week. CEO Stephen Hunter confirmed to Toronto’s The Globe & Mail that the airline has been approached, but declined to provide further information due having signed a confidentiality agreement.
Reporters used Tim Horton’s BOGO coupons in an effort to persuade Hunter to break the NDA, but the CEO couldn’t be swayed. Hunter was willing to say that the many different business units of Sunwing’s parent company, Sunwing Travel Group could complicate the sale. The parent company operates 45 resorts in the Caribbean and Mexico – shockingly to where most of Sunwing’s flights from Canada operate – in addition to a luxury jet charter service and other vacation brands. The company is owned by Hunter’s family which has a 51% stake, with TUI group owning the rest.
An unnamed airline executive speculated to The Globe and Mail that it was believed the takeover bid came from Calgary-based WestJet which has had takeover talks with Sunwing in the past. The real question is whether or not the unnamed executive works for the unnamed airline – and what a confusing workplace that would be.
A potential tie-up between Sunwing and WestJet would be difficult to pass regulatory approval. The Canadian government is currently examining the potential purchase of Air Transat by WestJet’s competitor, Air Canada. If that sale is approved, it would reduce the number of competitors in the Canadian market, likely posing an issue for this potential takeover.
Airline Potpourri
- American is retiring its fleet of Embraer 140 aircraft. All are expected to have been removed from the fleet by May 6.
- Bulgaria Air is launching 10 new leisure-based destinations from its Sofia (SOF) hub, beginning with Sofia to Dubai on May 5.
- Gulf Air will resume service to Colombo (CMB) with 2x weekly flights beginning February 15.
- SAS will increase its summer 2021 schedule to operate to 180 destinations from Scandinavia.
- Singapore has reached agreements with both Airbus & Boeing to defer $3 billion in aircraft deliveries, including conversion of some 787 orders to the new 777-9.
- Vietjet received two new A320 aircraft that it will put into service in time for the Lunar New Year.
- Virgin Australia plans to open its new lounge at Adelaide (ADL) later this month.
Andrew’s Moment of Levity
My cousin was meeting someone he met online for a first date. He suggested they meet at the gym. When his date stood him up, he realized they would never work out.