"headquarters will stay in Minnesota and Jude Bricker will remain president and chief executive."

http://m.startribune.com/sun-country-ai ... 464144973/

So much for the Allegiant merger rumors. Expect Ex Allegiant Jude to reshape Sun into a similar airline.

SteveXC500 wrote:

"headquarters will stay in Minnesota and Jude Bricker will remain president and chief executive."

http://m.startribune.com/sun-country-ai ... 464144973/

I could be very wrong but I have a feeling Apollo will flip this airline to another investor. This feels like SY will go down the road of NK/F9 in terms of overall service and employee compensation.

IMO Cambria held onto it longer than I thought they would. They are good at making countertops, but running an airline? Eh.

Does anyone know anything about Apollo? Do they or members of their group have any airline business experience?

It's not an airline company. It's an investment management company for institutional and individual investors.
Sun Country is a play for their alternative investment portfolio.

I'll give them 5 years max before they either go under or merge.

AWACSooner wrote:

I'll give them 5 years max before they either go under or merge.

I say in 5 years you're looking at something the size of Allegiant circa 2007.

stlgph wrote:

I say in 5 years you're looking at something the size of Allegiant circa 2007.

IMO, this has too many signals of "divide and conquer." Either they'll divide (merge) or conquer (piss off their clientelle and workforce so much, they go under).

AWACSooner wrote:

stlgph wrote:

I say in 5 years you're looking at something the size of Allegiant circa 2007.

IMO, this has too many signals of "divide and conquer." Either they'll divide (merge) or conquer (piss off their clientelle and workforce so much, they go under).

If pissing off the clients and workforce was an issue, Allegiant, Frontier, Spirit, United, American, Delta, JetBlue would have all gone out of business a long, long time ago.

No, this has signs of opportunity for a bunch of people to make a bunch of money. Bricker joined the company in May 2006 and stayed through May 2017, seeing it from a cute little travel company/airline offering an IPO in 2006 of 5 million shares at $15-$17 each to now having more than $2.6 billion in market cap, with shares trading at $149^ at the moment.

Bricker has a free pass to do whatever he wants to make this happen. With Cambria, he just didn't have access to the financing. With Apollo, he has access to the financing.

Off we go!

stlgph wrote:

Bricker has a free pass to do whatever he wants to make this happen. With Cambria, he just didn't have access to the financing. With Apollo, he has access to the financing.

This is the key question. Will Apollo be willing to put up the money to let Sun Country grow and build some real scale, or are they looking to spruce things up a bit and make a quick flip to some other private equity group? It won’t be cheap to get Sun Country to a place where an IPO is realistic. I hope for the employees it is the former and Apollo is in for the long haul and can bring some stability to the airline.

Alias1024 wrote:

stlgph wrote:

Bricker has a free pass to do whatever he wants to make this happen. With Cambria, he just didn't have access to the financing. With Apollo, he has access to the financing.

This is the key question. Will Apollo be willing to put up the money to let Sun Country grow and build some real scale, or are they looking to spruce things up a bit and make a quick flip to some other private equity group? It won’t be cheap to get Sun Country to a place where an IPO is realistic. I hope for the employees it is the former and Apollo is in for the long haul and can bring some stability to the airline.

I'm sure Apollo be happy to load some debt onto SY in order to create some growth opportunities. Assuming SY's balance sheet has minimal debt now (which seems to be the case) then I expect Apollo to start running the credit card on SY's behalf. That's generally how these things work. The real concern is for the employees themselves. SY has generally been pretty good to their employees. They actually directly employ a lot of airport staff relative to the size of the airline. That presumably will change and SY will start outsourcing most airport operations like the other LCCs. Expect much leaner airport operations which will be unfortunate for those that are employed today. Hopefully they offer a second round of buyouts to give those workers an option to leave with some extra money.

Apollo is following the latest Buffett playbook from the May 2017 Berkshire Hathaway conference.

Would this be an interest of Southwest? Take possession of their 737 fleet, aquire their gate and slots from DCA.

flyiguy wrote:

Would this be an interest of Southwest? Take possession of their 737 fleet, aquire their gate and slots from DCA.

I believe the fleet is leased only. So, to Southwest, they would be more interested in eliminating a competitor at MSP. Unless, they can acquire the leases.

When you look at some of Apollo's other interests all this starts to make a little more sense:
-Great Wolf Resorts (Great Wolf Lodge)
-Norwegian Cruise Lines
-Oceania Cruises
-Regent Seven Seas Cruises

I don't know how much of each they currently hold (if any) but there are certainly synergies to be had by combining the businesses. Look to Sunwing in Canada as an example. Very successful package tour operator of which the airline is only a part. It's a market that's much less developed in the US.

wrongwayup wrote:

When you look at some of Apollo's other interests all this starts to make a little more sense:
-Great Wolf Resorts (Great Wolf Lodge)
-Norwegian Cruise Lines
-Oceania Cruises
-Regent Seven Seas Cruises

I don't know how much of each they currently hold (if any) but there are certainly synergies to be had by combining the businesses. Look to Sunwing in Canada as an example. Very successful package tour operator of which the airline is only a part. It's a market that's much less developed in the US.

That is interesting. Great Wolf just bought the Waterpark of America hotel by the MSP airport and the Mall of America.

Correction: Great Wolf bought the waterpark earlier this year and they just reopened it this week.

https://wp.me/p14KOW-3iIi

Apollo Global sold Great Wolf to Centerbridge in 2015.

SUNCTRY738 wrote:

Does anyone know anything about Apollo? Do they or members of their group have any airline business experience?

Alias1024 wrote:

This is the key question. Will Apollo be willing to put up the money to let Sun Country grow and build some real scale, or are they looking to spruce things up a bit and make a quick flip to some other private equity group? It won’t be cheap to get Sun Country to a place where an IPO is realistic. I hope for the employees it is the former and Apollo is in for the long haul and can bring some stability to the airline.

klakzky123 wrote:

I'm sure Apollo be happy to load some debt onto SY in order to create some growth opportunities. Assuming SY's balance sheet has minimal debt now (which seems to be the case) then I expect Apollo to start running the credit card on SY's behalf. That's generally how these things work. The real concern is for the employees themselves. SY has generally been pretty good to their employees. They actually directly employ a lot of airport staff relative to the size of the airline. That presumably will change and SY will start outsourcing most airport operations like the other LCCs. Expect much leaner airport operations which will be unfortunate for those that are employed today. Hopefully they offer a second round of buyouts to give those workers an option to leave with some extra money.

Apollo is a diversified investment group, they have (last time I looked) around $265B in cash and investments.

What will they do with SY, who knows, they don't tend to flip companies they buy, but rather hang on to them, grow them, then sell them if someone makes the right offer. I don't see them loading SY up with debt, if only because they don't need to, though if the markets go south and pressure is put on them to raise capital that will always be an option.

What I do see them doing is running a lot more flights to Miami in support of their cruise ship operations and Las Vegas in support of their hotel/casino operations. That's how I would run it anyways, may as well keep that revenue "in house" if they can. Interestingly Harrah's (which is now Caesars, which is partly owned by Apollo) tried that route with National # 3.

I tend to agree with you, in part ... that part being the strategy.

I would say some of the first moves would be to cherry pick routes they know through frequent charter operations ... i.e. Mexico, i.e. St. Louis, etc. Why run on behalf of Apple or whomever when you can do itself as a travel company and maximize the revenue potential.

Of course, you could be right. I'll be curious to see what kind of news we hear in regards to adding more planes to the fleet so they can grow out of the Minneapolis-centric operation.

Just remember you can only grow an airline so fast. You can order all the planes you want, but you also need the staff to flying them, maintain them, folks to dispatch them etc. IIRC every time you add more A/C doesn't the FAA/DOT need to approve your fleet increase. Replacing planes like DL/WN/AA etc don't need as much over site correct. Doesn't F9/NK/G4 have the Feds watching them as they add planes.???

wrongwayup wrote:

When you look at some of Apollo's other interests all this starts to make a little more sense:
-Great Wolf Resorts (Great Wolf Lodge)
-Norwegian Cruise Lines
-Oceania Cruises
-Regent Seven Seas Cruises

I don't know how much of each they currently hold (if any) but there are certainly synergies to be had by combining the businesses. Look to Sunwing in Canada as an example. Very successful package tour operator of which the airline is only a part. It's a market that's much less developed in the US.

Allegiant much??

A great example of what Apollo Management can do in acquisitions such as this by the huge investment that has been made in their cruise holdings portfolio since they acquired a large portion of Norwegian Cruise Line from Star Cruises (Genting Group).

I think this is good news for Sun Country and personally I think that the airline for now is in safe hands with Apollo Holdings Management, I am sure that investment will be forthcoming I have no doubt about it.

HO - LEE ! ! ! I'm suffering from spatial disorientation just reading most of your comments! I'm no expert on corporate growth, and the only thing that I remember about the name Apollo being travel-connected is that it used to be the name of the CRS used by United. But, I do know that a laundry list of rumors du jour in the break rooms is a good way to torpedo morale among any workforce. Sun Country has good people working for it, and Apollo just needs to let them do what they do best. And, Apollo would do well to heed Bob Crandall's advice, that "Airlines are NOT investments!"