Sun Country joins the Chapter 11 club

scaplane.jpgAnother one bites the dust? You could have seen it coming, but Sun Country, a smallish carrier based up in the Twin Cities, went into bankruptcy protection on Monday night, just a few business days after it issued a warning of a 60-day shutdown to its pilots. The crisis comes as the airline’s managers, led by Stan Gadek, have declared that they will no longer be able to draw on the airline’s parent company, Petters Group, for continued operating funds. Petters himself has left the company after a federal probe involving raid on the firm led to his arrest on Friday night. But Gadek, a former AirTran executive, says that the airline will continue operating all flights as usual. Sun Country was in bankruptcy once before but came out in 2002 under new management.

Other US-based carriers that have filed for bankruptcy so far this year include Aloha Airlines, ATA Airlines and Skybus., all of which have liquidated, while Frontier Airlines is trying to reorganise while in Chapter 11 protection.

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One Response to Sun Country joins the Chapter 11 club

  1. Margaret Nahmias 12 October, 2008 at 11:38 pm #

    Maybe they can go public to raise funds if the stock market gets better and that a big if. I don’t these think smaller airlines will have resources and captial to survive. Instead of picking on poor US Airways, analysts should be questioning the viablity of these smaller airlines. Do To paraphrase a verse from the biblical book of a Ecclesiastes The race does not go to the swift or the strong, but in this case the well-capitalized and managed. As long as US Airways has strong capital base, why should analyst talk them down except they are biased because the post merger euphoria went away. I guess that analyst cannot agree on whether US Airway is capitalized enough especially after the stock took a hit. I know this much Trouble is no respecter of size whether too big or small.

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