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Sun Country Airlines jumps 40% in trading debut as investors bet on travel rebound

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Sun Country Airlines Boeing 737 takes off from Los Angeles International Airport on August 27, 2020.

AaronP/Bauer-Griffin | GC Images | Getty Images

Sun Country Airlines shares jumped 40% in their trading debut Wednesday, signaling strong investor appetite for airline stock as the industry plots a rebound.

The budget airline had estimated it raised $218 million in an initial public offering. The Apollo Management Group-backed airline is the first U.S. carrier to go public since Mesa Air Group in 2018. It’s also the largest U.S. airline IPO since Virgin America’s in 2014, according to Dealogic.

Sun Country sold close to 9.1 million shares, which priced at $24, it said late Tuesday. Last week, the Minneapolis-based airline said it expected the shares to price between $21 and $23. The shares were trading at $34 midday Wednesday. They debuted under the ticker “SNCY” on the Nasdaq Global Select Market.

Discount carrier Frontier Airlines is reviving its plans to go public, it said last week.

Sun Country caters to sun-seeking vacationers, a segment that has fared better during the Covid pandemic compared with larger airlines whose big international networks and business models rely heavily on corporate travel. Sun Country also has an agreement with Amazon to fly cargo on older narrow-body Boeing 737 planes.

Sun Country was still impacted by the crisis. It swung to a $3.9 million loss last year from net income of $46 million the previous year, according to company filings. Revenue last year fell to $401.5 million from $701 million in 2019.

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