AirTran CFO to Lead Sun Country: New CEO Expects to Grow Carrier

By John Welbes, Pioneer Press, St. Paul, Minn.

Mar. 6–Sun Country Airlines turned to one of the nation’s leading low-cost carriers for its new CEO on Wednesday, selecting Stan Gadek, formerly AirTran Airways’ chief financial officer.

Mendota Heights-based Sun Country is coming off two money-losing years in a row. But it has a loyal customer base and has received high marks for customer service in some surveys.

“I think Sun Country has a very good reputation, a great product,” Gadek said in a Wednesday interview. He said he wants to “come on board and help grow the company, and the brand and the reputation for customer service.”

While the airline industry is struggling with high fuel prices, Gadek said he’ll get up to speed quickly on the airline’s operations, but will be cautious about “tampering with the underlying business model, which has been working well to attract customers to the routes we fly.”

Sun Country’s strategy focuses on flights to warm-weather destinations that attract high passenger volume, while keeping blocks of seats open for low-fare package deals sold by travel agents. From its base at Minneapolis-St. Paul International Airport, Sun Country’s most popular routes include flights to Phoenix, Orlando, Fla., New York and Las Vegas.

According to data filed with the U.S. Department of Transportation, privately held Sun Country had a net loss of $27 million in the four quarters ended September 2007. In the same four-quarter period in 2006, the airline lost $10 million.

Competing in the

current environment for airlines, Gadek said, includes making money. “It’s absolutely important that this company achieve profitability,” he said.

He declined to go into specifics on how he wants to accomplish that, but said part of Sun Country’s attractiveness is that it has a unique niche and it’s nimble.

AirTran made a hostile bid for Milwaukee-based Midwest Airlines in 2006. But Midwest spurned that offer and ultimately sold to a private-equity group and Eagan-based Northwest Airlines, which now has a minority stake in Midwest.

For Gadek, Northwest “absolutely is a competitor.” He said Sun Country will leverage its reputation with passengers to improve its position against Northwest. Sun Country has a 4.3 percent share of the market in the Twin Cities; Northwest has 66.5 percent, according to federal statistics.

Gadek has been with Orlando-based AirTran since 2000, but he’s no stranger to the Twin Cities. He worked for Northwest Airlines’ accounting department in the 1980s and his in-laws live here. Gadek starts on Monday.

“In this difficult industry, Stan’s extensive experience in mergers and acquisitions, debt and equity financing will be of significant value to Sun Country,” said Jay Salmen, president of Petters Aviation, Sun Country’s parent company.

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