Order 2013

- 9

- 18
Served: September 30 , 2013

UNITED STATES OF AMERICA
DEPARTMENT OF TRANSPORTATION
OFFICE OF THE SECRETARY WASHINGTON, D.C.

Issued by the Department of Transportation

on the 30 th day of September , 2013

Application of

MN AIRLINES, LLC
d/b/a SUN COUNTRY AIRLINES

For removal of fleet restriction pursuant to 49 U.S.C. § 41109(b) Docket DOT

- OST

- 2002

- 11861

ORDER REMOVING CONDITION

Summary

By this order, we remove the condition that limits MN Airlines, LLC d/b/a Sun Country Airlines (“Sun Country”) from operating no more than 18 total aircraft.

Sun Country holds certificate authority to conduct interstate and foreign 1 scheduled passeng er operations

and is restricted in th e number of aircraft it may operate. 2

Background

On May 20, 2013, Sun Country filed an application in Docket DOT

- OST

- 2002

- 11861 requesting that the Department remove the condition that imposes fleet restrictions on the air carrier. In support of its

r equest, Sun Country asserts that the removal of this restriction will allow the company to proceed with the orderly growth of the airline. In addition, Sun Country maintains that its operating cash needs can be generated through internal operations, and s ince the Department first imposed fleet restrictions on the airline in 2002, the company has consistently demonstrated its ability to operate safe and reliable

aircraft.

No answers to the application were received.

1 By Order 2007

- 7

- 3, the Department authorized Sun Country to engage in foreign air transportation with countries holding blanket Open Skies authority (Route 849). Sun Country also has authority to serve the Bahamas and the Dominican Republic pursuant to Or der 97

- 10

- 8 (Route 746).

2 By Order 2002

- 5

- 12, the Department initially authorized Sun Country to operate no more than seven aircraft.2

FITNESS

Company

By Order 2002

- 5

- 12, the Department found Sun Country fit to engage in interstate and foreign scheduled passenger air transportation and issued to it an interstate scheduled certific ate authorizing such operations. 3 The Department included a requirement that limite d the number of aircraft that Sun Country could operate to 7 aircraft. The Department has, since then, granted Sun Country authority to

increase its fleet to 18 aircraft. 4 Sun Country currently provides scheduled and charter flights, including

internatio nal and domestic military charters, utilizing a fleet of 17 leased Boeing 737

- 800 and

- 700

aircraft.

With respect to the company’s fitness, Sun Country notified the Department in February, 2013 that

President and Chief Executive Officer Mr. Stan Gadek ha d been replaced by Mr. John S. Fredericksen, who retains his position as the air carrier’s General Counsel and Secretary of the Board of Directors. Additionally, Mr. M. Mitchell Davis, one of the owners of the company, was named to the Board of Directors, replacing Mr. Jonathan Davis. Other than these substantial changes, Sun Country asserts that no significant changes affecting its ownership and management, financial condition, and compliance disposition have occurred since its last fitness review, which was concluded in August 2012. Moreover, the current and historical financial statements show that Sun Country’s financial posture is positive. Specifically, for the four months ended April 30, 2013, Sun Country earned approximately $10.2 million on $154 .3 million in operating revenues. The company’s balance sheet at April 30, 2013, showed the air carrier having current assets of $81.6 million and current liabilities of $71.2 million, giving the company positive working capital of approximately $10.4 mil lion. In addition, for calendar years 2011 and 2012, Sun Country reported net income of about $4.3 million and $14.8 million on revenues of $308.1 million and $361.5 million, respectively.

Sun Country also states that there are no actions or outstanding judgments against it, its owners, or its key personnel, nor have there been any charges of unfair, deceptive or anti

- competitive business practices, or of fraud, felony or antitrust violation s, or other legal action, against any of these parties. Sun Country disclosed a pending Federal Aviation Administration’s (“FAA”) review regarding a March
13, 2013

, flight where the air carrier allegedly did not follow the approved Sun Country Exit Row Se at Program. The FAA’s Safety Performance Analysis System (“SPAS”) lists an additional 5 open enforcement actions against Sun Country. Two of these violations carry recommended civil penalties totaling $325,900, including a civil penalty of $323,400 for a llegedly operating a maintenance test flight under maintenance ferry procedures

. We note that while the air carrier has several actions pending against it, these actions appear to be typical of a company the size and scope of Sun Country. SPAS also indicates that Sun Country has had no accidents but has had 2 incidents 5 since last being found fit in

3 By Order 2002

- 7

- 28, the Department issued to Sun Country its foreign scheduled passenger certificate authority.

4 By letter dated August 31, 2012, the Department found Sun Country fit to increase its fleet to 18 aircraft.

5 FAA report 20130418006529 indicates that on April 18, 2013, a Sun Country B737 required an emergency landing due to a flight control malfunctio n. Damage was sustained to the tires of the aircraft. The FAA required the flight crew to take additional training in crew resource management and missed approach procedures. FAA Report 20130406004239 details a n April 6, 2013

, bird strike by a Sun Countr y B737 upon climb out at Minneapolis. As a result of the bird strike, the number 2 engine was replaced.3

August, 2012. The FAA has advised us that it has no objections to us granting Sun Country’s request to

remove the aircraft restriction.

DECISION

The Department has reviewed the information submitted by Sun Country and finds it appropriate to

remove the aircraft limitation under which the air carrier currently operates. T he Department monitors new entrants closely for the first five years of operations and limit s fleet growth in order to give the air carrier’s key management and technical personnel experience in overseeing scheduled passenger operations

. This practice is a result of recommendations contained in the FAA 90

- Day Safety Review of September 1996. We note that Sun Country was found fit in 2002 and for over the past ten years, the FAA has closely overseen and regulated the air carrier’ s fleet growth and continues to do so.

In consideration of the above, the Department finds it appropriate to approve Sun Country’s request. The air carrier’s financial condition since it has emerged from bankruptcy in 2011 has remained strong and the Department finds no reason to continue to res trict Sun Country’s operations. In addition, we

conc lude that Sun Country has the proper regard for the laws and regulations governing its operations to ensure that its aircraft and personnel conform to applicable safety standards and that acceptable consumer relations practices will be followed. We remind Sun Country, however, that although the Department is no longer requiring the air carrier to seek economic approval to operate additional aircraft, the air carrier is still subject to FAA safety approval before adding aircraft to its Operations Specificat ions.

ACCORDINGLY,

1. We remove the condition in the interstate and foreign certificates of public convenience and necessity issued to MN Airlines, LLC d/b/a Sun Country Airlines, by Order 2002

- 5

- 12 that imposes a

limitation on the number of aircraft the air carrier is authorized to operate.

2. We will serve a copy of this order on all persons listed in Appendix A.

By:

SUSAN L. KURLAND Assistant Secretary for

Aviation and International Affairs

An electronic version of this document is available on the World Wide Web at: http://www.regulations.govAttachment A

SERVICE LIST FOR MN AIRLINES, LLC

d/b/a SUN COUNTRY AIRLINES

MR THOMAS W TING

DIRECTOR LEGAL AFFAI RS

MN AIRLINES LLC

1300 MENDOTA HEIGHTS ROAD

MENDOTA HEIGHTS MN 55120 MR MARK MAZOR

CERTIFICATION SECTION MANAGER

FAA AFS

- 900

45005 AVIATION DRIVE SUITE 131

DULLES VA 20166

MR JAMES BRANNON

MSP FSDO

FEDERAL AVIATION ADM INISTRATION

6020 28 TH AVENUE SOUTH

ROOM 201

MINNEAPOLIS MN 5545 0 MR PETER LYNCH AGC

- 300

ASST CHIEF COUNSEL FOR ENFORCEMENT

FEDERAL AVIATION ADMINISTRATION

800 INDEPENDENCE AVE SW

WASHINGTON DC 20591

OFFICE OF AIRLINE INFORMATION

DOT/RITA/BTS E

- 34

1200 NEW JERSEY AVE SE

WASHINGTON DC 20590