Sun Country warns of shutdown, layoffs

Categories: Business

We celebrated yesterday when Southwest Airlines announced a Chicago route from Minneapolis starting next year. Now the airline industry brings bad news with Sun Country's announcement Thursday that there could be major layoffs or a shut down as early as December.

The news comes a week after its owner Tom Petters became entangled in a federal fraud investigation. To distance itself from Petters Group Worldwide, Sun Country vowed to be financially independent despite previously expecting to get a short-term loan from Petters to address a cash shortage at the end of this year.

According to the Star Tribune:

Sun Country Airlines, fighting to survive a cash crunch, has warned its employees to prepare for the possibility of major layoffs -- or a shutdown of the airline -- as early as Dec. 1.

Sun Country, which is not being investigated, now is scrambling to ensure it has enough cash to operate until it reaches the heavy winter travel season, when management expects it to turn a profit.

John Fredericksen, Sun Country's general counsel, called the airline's situation a "serious financial crisis" in a letter that was sent to employees late Wednesday.

He wrote: "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."

Don't worry, your money isn't lost in your planned Mexico getaway this winter. Sun Country says customers will fly or get a refund. Whether you want to book a flight with Sun Country is another question.


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