Oct 2, 2008 6:46 pm US/Central
Sun Country Tells Workers It May Shut Down Dec. 1
(WCCO)
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Sun Country Airlines said in a notice to employees Thursday that if it is unable to secure funding, it could shut down Dec. 1.
AP
Sun Country Airlines has indicated the possibility that the carrier may have no other alternative than to shut down or furlough some employees as soon as December.
In an e-mail sent to employees by Sun Country vice president and general council John Fredericksen, the company warned of potentially serious repercussions due to their current "financial crisis."
According to the e-mail, the company has been considering the possibility that they will be unable to secure loans or obtain relief from their creditors in short order.
In the event they are unable, some or all employees could be temporarily furloughed as early as Dec. 1.
In response to inquires about the e-mail, Sun Country released a statement saying that "customers have nothing to worry about if they have purchased a ticket on the airline."
The company also said the e-mail was sent to employees Wednesday night because federal law requires 60 days notice in the event of a shutdown or a major layoff.
Earlier this week, the company announced a pay deferral of 50 percent for all employees through the end of the year. Sun Country said Thursday that "over the past week we have made progress in negotiating with vendors and identifying additional sources of revenue."
Sources said Sun Country CEO Stan Gadek was going around town Wednesday trying to secure loans from local businesses and banks.
"We are actively seeking solutions to this crisis and are confident that we will find ways to get through this," read the e-mail to employees. "However, there are obviously risks that no solution will be found."
On Sept. 24, federal agents raided Sun Country parent company Petters Group Worldwide headquarters in Minnetonka and Chairman and CEO Tom Petters' home in Wayzata to collect evidence for a potential fraud prosecution.
Sun Country lost $47 million on $251 million in operating revenue for the 12 months ended in June. Petters had provided about $25 million to subsidize operating losses at Sun Country over the past year.
"Sun Country is doing, and will continue to do, everything within our power to solve our current financial crisis," Fredericksen wrote in his notice to employees.
(© 2009 CBS Broadcasting Inc. All Rights Reserved. This material may not be published, broadcast, rewritten, or redistributed. The Associated Press contributed to this report.)
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