Sun Country files for bankruptcy
10-08-2008, 09:31 AM
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Sun Country files for bankruptcy
Sun Country files for bankruptcy
ATW Daily News
Tuesday October 7, 2008
Sun Country Airlines yesterday filed for Chapter 11 bankruptcy protection, but insisted it will "operate business as usual."
The Minneapolis/St. Paul-based carrier has been on shaky ground since its parent company, Petters Group Worldwide, became ensnared in a US federal criminal investigation last week related to an alleged fraud scheme. Recently resigned PGW Chairman Tom Petters, who was arrested Friday, relinquished his role as SCA chairman. President and CEO Stan Gadek became chairman and said the airline, which has not been implicated in the federal probe, needed to secure its financial independence (ATWOnline, Oct. 6).
Gadek said yesterday that the bankruptcy filing was forced on SCA as "a result of recent events at Petters Group Worldwide," adding, "We do not anticipate any disruptions and expect to operate business as usual. Customers can book their flights in confidence."
In a statement issued prior to the bankruptcy filing, the carrier said that a letter sent to workers last week warning of a possible shutdown by Dec. 1 was merely a precaution and ensures that SCA complies with federal law regarding notification of possible layoffs within 60 days. "We are meeting our financial obligations and have every confidence we will continue to fly," SCA said in the statement. "We have been very open about the financial challenges we face since the situation with our parent company developed last week. However, over the past week we have made progress in negotiating with vendors and identifying additional sources of revenue. We have taken the very difficult step of instituting a pay deferral but have received employee support during this challenging time."
SCA operates a fleet of nine 737-800s on scheduled services and charters to points in the US, Mexico and the Caribbean.
by Aaron Karp
ATW Daily News
Tuesday October 7, 2008
Sun Country Airlines yesterday filed for Chapter 11 bankruptcy protection, but insisted it will "operate business as usual."
The Minneapolis/St. Paul-based carrier has been on shaky ground since its parent company, Petters Group Worldwide, became ensnared in a US federal criminal investigation last week related to an alleged fraud scheme. Recently resigned PGW Chairman Tom Petters, who was arrested Friday, relinquished his role as SCA chairman. President and CEO Stan Gadek became chairman and said the airline, which has not been implicated in the federal probe, needed to secure its financial independence (ATWOnline, Oct. 6).
Gadek said yesterday that the bankruptcy filing was forced on SCA as "a result of recent events at Petters Group Worldwide," adding, "We do not anticipate any disruptions and expect to operate business as usual. Customers can book their flights in confidence."
In a statement issued prior to the bankruptcy filing, the carrier said that a letter sent to workers last week warning of a possible shutdown by Dec. 1 was merely a precaution and ensures that SCA complies with federal law regarding notification of possible layoffs within 60 days. "We are meeting our financial obligations and have every confidence we will continue to fly," SCA said in the statement. "We have been very open about the financial challenges we face since the situation with our parent company developed last week. However, over the past week we have made progress in negotiating with vendors and identifying additional sources of revenue. We have taken the very difficult step of instituting a pay deferral but have received employee support during this challenging time."
SCA operates a fleet of nine 737-800s on scheduled services and charters to points in the US, Mexico and the Caribbean.
by Aaron Karp
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