Greg Mays, COO of Sun Country Airlines
On Monday, January 24th, I had the privilege to interview Greg Mays. Mr. Mays is the Executive Vice President and Chief Operating Officer at Sun Country Airlines. He has over 26 years of experience in the aviation industry working for The Boeing Company, Delta Air Lines, Alaska Airlines, and Sun Country Airlines. This interview has been edited for length and clarity.
Joshua Kupietzky: How did you start your career in the aviation industry?
Greg Mays: I started my aviation career wanting to be a pilot; I got my private pilot's license. I wanted to fly in the military. But as I finished up my training and got my third class medical, it was confirmed that I was colorblind. I pivoted and got an Aerospace Engineering degree and started at Boeing working on the International Space Station and later moved to the airlines where I have been for well over 20 years. I got a business degree as well along the way.
JK: Now is perhaps the most difficult time in the history of the aviation industry. What do you see as your current top challenges and opportunities? And how do you think Sun Country has navigated out of the COVID crisis?
GM: I think all airlines are striving to grow back to where they were. And they're going to be vying for common resources, typically around staffing and labor. So I think that's actually a challenge the entire industry is dealing with, and I would say that Sun Country is no different. The other challenge here is that Sun Country is posting double digit and significant growth into 2022 and beyond. Our percent growth will be larger than many, if not all, carriers, so we’re striving to not only replace scheduled service lines, but also grow pretty significantly beyond them. I think that just represents a challenge. As far as the opportunities for Sun Country we’ve gone through the pandemic and proven our business model now we just need to execute on our strengths, which is moving in and out of station operations quickly and efficiently, operating a world-wide charter business, execute very well for our cargo customers all while evaluating new opportunities across each leg of our business model: scheduled service; charter service; and cargo. We do see opportunities to grow each one. As far as navigating the COVID-19 crisis, I think that Sun Country has been able to navigate it as better than likely anyone and much has to do with this diversification as well as a very committed Team Sun Country employees that I would put up against any in the industry. Uniquely, unlike any other carrier I know of, we grew our business in 2020 by operating more flights in October than we did in February of that year, which was pretty impressive.
JK: Staff shortages have been a very big challenge for many US carriers. Given these shortages and the difficulty of finding quality staff currently, what is your strategy for recruiting qualified people to come and work at Sun Country instead of any other US carrier?
GM: I'll speak about pilots, but this issue is not just unique to pilots but that is a group that get a lot of attention and they're clearly important to run a successful airline. To use a marketing approach, it is about product, promotion, positioning, and price. The first thing you have to do is produce a good employment product, and the product to me comes in two forms. One, you need to have a good pay/compensation proposition. Secondly, you must offer a place with a good culture and a place where they can build a career. One of the things that we worked on very hard this last year was the pilot agreement. Our pilots are represented by ALPA [Air Line Pilots Association], and we did a section six, or a collective bargaining agreement deal, in just a little over two months which was an incredible amount of work on both sides of the table and is a representation of the relationship management and the pilot group have. I have never seen anything like that accomplished in my time in this industry. The last pilot agreement that was done here was in 2015, so a lot has happened in this industry since that time. The other part of product is what we offer. I think Sun Country is a dynamic, growing airline that I believe is the most exciting airlines in the country and I believe there's never been a better time to be a part of team Sun Country. I think it's rare to find an airline that is as diversified and growing profitably at these rates and I look forward to seeing how Sun Country further differentiates itself from the rest of the industry. When it comes into promotion and positioning, are we in the right places at the right times for the right people? We put a lot of effort into our pilot recruiting team to make sure they're in the right places at the right time. Then we're just watching the rest of the industry, to see what they do, what are some things we can do and follow fast. It's a challenging time for recruiting, and it's a key initiative for us here at Sun Country not only for pilots but for every workgroup.
JK: Sun Country, like all carriers, has retooled its network since the start of the pandemic. What has worked and what hasn't? Do you see your network targeting more business or VFR (visiting family and relatives) travelers as you continue to emerge from the pandemic? What lessons has the pandemic taught you about your network and the mix of leisure and business travel?
GM: I think Sun Country is unique in this category because we are a 100% leisure carrier. Our strategy has been aligning our flying when people want to fly that is in our DNA. Think about scheduled service for a minute—100% leisure travel, so we fly only when passengers want to fly, which means that we need to do a few things. Number one, we need to own a fleet as opposed to leasing a fleet, so we get good economics that don’t require high utilization (meaning flying on days where demand is very low). Our choice is the 737, specifically the 800. And we purchase the aircraft and own them outright, furthermore, we strive to operate these mid-life a/c at high levels of reliability. This is key because of our frequencies and where we operate the a/c. In 2019 we had a fleet of under 30 a/c yet operated to 365 stations world-wide. So good reliability and a capable TechOps team is very important. The other thing is we need to be very agile and move in and out of stations very quickly and smoothly, so that we can fly markets that carriers won't have all the capacity and need to—but we can come in there and take the spill. Being Minneapolis based, we also operate well in extreme weather. We do this by offering an extremely high completion factor.
Regarding your question, we didn’t really adjust what we were doing prior to the pandemic. We did pull back sked service as most everyone else did, but in some areas we doubled down on charters. The slowdown in the industry allowed us to move into some charter markets that we hadn't thought about before and wouldn't have done otherwise by dipping our toe in VIP type services. We also entered some markets in 2020 and 2021 that we typically would not have.
We retool our sked service business three times a year. A) moving Midwesterners out of the cold weather, B) summer and big city VFR, and C) holiday travel. We offset the seasonality with sports and other charter business and top it with a consistent cargo business. We didn’t change anything post pandemic but we did verify that what we do works and constantly enhance and build upon it.
JK: Do you believe that a hub to spoke model is more beneficial to Sun Country than a point to point model? And do you plan to open up more hubs besides Minneapolis?
GM: We operate a bit more point to point and largely we operate out of Minneapolis. We are building up some other areas in the Midwest, and we see the opportunity to find many small hubs like Minneapolis. You are starting to see us do a little bit more of that. We also see some opportunities down in Texas, in other areas to build out seasonal networks. We are going to be very seasonal, and primarily you're going to see a schedule servicing one base year round, but we will move in and out of other areas as we see opportunities but we will serve those from MSP. The only exception I can see in the near-term could be charters. We already operate a few flight attendant bases that serve dedicated charter operations. I could see that grow potentially.
JK: How has the continued spread of the Omicron variant changed Sun Country’s calculus for 2022? Have you scaled back flying or destinations? When do you think the recovery will be on more stable footing?
GM: The variant seems to have a short life that comes up and peaks and then comes back down. I think generally we're seeing some impacts as other carriers did towards the end of the year and into the holiday. For us, I think we want to stay very agile. Within our own organization, our operations team and our network team work very, very closely together. Perhaps better than any other carrier that I've worked for, they can make quick decisions about putting capacity into a market or removing it. And I think that's been key to our success navigating this crisis. We just watch every day to figure out what we need to do to deal with the network decisions that we're making. We also have a great security team and a great safety team that works in these international destinations to make sure we're compliant with US laws and regulations. For me, I look at ’22 and what I see is our passengers are booking a little closer to their day of travel. We just need to have that capacity out, but we're very agile, and we'll make the adjustments we need to up or down on the network side.
JK: As you mentioned, Sun Country has three segments: business scheduled service, charter, and cargo. Which segment has been most successful? And with the increase in shipping demand, will you increase your cargo segment of business?
GM: I tend to think that they all complement and operate together. None would be as successful as the other if they weren't all operating together. Our scheduled service has probably been the most challenged, for all the reasons that the other carriers are experiencing—namely demand issues from the passenger service side. Other areas we grow and actually started a brand-new line of business, an element of our charter business, which has been very successful. We also secured a few more long-term contracts which allows us to put more and more flying in the bid (and not short-notice) which is more efficient. We also started a brand new line of business in cargo, which is exclusively for a partner. We fly the schedule for them, and we provide crew, maintenance, and insurance. As long as we perform well, that can be a stable business for us.
JK: I believe the partner you were referring to was Prime Air (the airline for Amazon). I know Sun Country has a few 737 freighters that they operate for Prime Air. Do you plan on converting more 737s into freighters to expand your fleet?
GM: We have 12 aircraft that we fly in our cargo network, and we fly them for our partner, as you mentioned. Those are a/c that we put on our ops spec and we did not convert them. We have considered making a white-tail freighter and if we did decide to convert one our pax a/c, we could use that for ourselves to satisfy some operational disruptions within our cargo fleet. Currently we are considering it, but we don't have defined plans to convert. Our very big focus right now is growing our passenger fleet and assuring we have the pilots and airline staff to operate well.
JK: Sun Country currently operates Boeing 737 NG aircraft. Are there plans to replace these aircraft types with newer aircraft such as the 737 MAX or the A320 neo in the future?
GM: I'd say our current fleet plan and our strategy is around procuring older 737 800s, and we do have that one 700. We see the opportunity to run with that strategy for a while. We have looked at MAXs but for us, our success has come from operating that mid-life aircraft, owning it outright, and operating it with high levels of reliability. We plan to stick with that in the near term. Bottomline, the economics with our business model and the MAX don’t align currently but that could change.
JK: With the rise in fuel costs and older planes burning more fuel than newer aircraft, is it more beneficial in the long-run to get newer aircraft that require less fuel than older aircraft, in terms of a cost perspective?
GM: We strive to be efficient in that we operate high-density and don’t fly when there is little demand AND we fly direct/point-to-point. This works well for us and we do operate a 737-800 with enhanced aerodynamics. The CFM56-7 is a great powerplant as well. It is the mid-life 800 that allows us to sit the a/c down on a Tuesday/Wednesday when other carriers are flying low load factors on those days.
From a fuel cost-saving standpoint, we do still have a lot of opportunities, and we are executing on them to continue to lower fuel costs (e.g. fuel burn initiative, etc.). At this time economics for a new a/c type, hasn't necessarily tipped the scales for us. As a ULCC and one that truly has a high load factor and operates only when people want to fly, our fuel cost per revenue passenger is much lower than a lot of other airlines.
Today the fleet choice we have works well for us. If we were to purchase a new a/c or lease a new a/c this would impact our ability to provide low fares and good value to many Midwesterners that are traveling on vacation and paying with their own money. That value proposition is very important to us.
JK: Have you looked at expanding into the long haul sector? Maybe obtaining an older 767 or a 787 Dreamliner in the future?
GM: We do look out into the future, and we have got some strategic plans where we would use an aircraft like this (767 or A330), most likely in the charter market. But I think that there would have to be some other factor that came along that made those options ones that aligned with our best interest in the nearer term.
JK: How do you view the main changes that have come about in the aviation sector because of the pandemic? For example, a lot of flyers think about change fees. Many airlines in the US have waived them. Do you think change fees are gone for good, and how would you adapt that part of your business if they were?
GM: Yeah, I don't know. It's a good question. And I don't necessarily want to speculate on what might happen in the future for other carriers. I know we have strived to work with our customers, and I see other people have as well, to make as many accommodations as we can.
JK: Thinking to the future, how do you see Sun Country unfolding in the wake of the pandemic in terms of fleet, network, and workforce size?
GM: As I said earlier, Sun Country is the most exciting carrier in the country, and it's never been a better time to be a part of this company. I think we've got a really good growth plan. We've got a great team, and I expect to see us meet or exceed our standard fleet plans and grow in a way that other carriers won't be able to. As a company, we have to make sure that we maintain our agility to be able to react to the market conditions, but I see nothing but opportunities for us in the bright future.
JK: What aspects of the aviation industry would you like to see improve in the next couple of years?
GM: I think technology is always an opportunity. I started my airline career in maintenance, and I think of opportunities for smarter planes that can help create more efficiencies. Those are areas that I think are great. I also think about technology in the flight deck, in terms of ATC [Air Traffic Control], and creating more flow and more capacity in the systems. Those are those things that I see out there in the future.
JK: Many countries are closing off travel, which has caused an increase in domestic travel. Have you capitalized on the increase in domestic travel? Have you added new routes in the United States? And when international borders open back up again, do you see Sun Country continuing to fly more domestically, or will you resume international service?
GM: Most of our flying internationally goes down into Mexico and the Caribbean, so we're not necessarily a long haul international carrier. From a business standpoint, carriers that do cater to that market are going to have some different approaches perhaps. As we went through 2020 and into 2021, some of our destinations were a bit more challenging for people to fly in and out of. There was more uncertainty around flying. And as I mentioned earlier, we are very agile in terms of our networks, and we really retooled them significantly to capitalize on where people wanted to fly. There was a lot of flying that we did to the west coast of Florida during the summertime and during the winter time last year, so we'll continue to do that. We've got a capable network team that looks for opportunities and will act on those accordingly and quickly. We do plan to grow our international flying in 2022 and we got our fair share of that in 2021 thanks to a great security and safety team that positioned us well to fly to multiple destinations compliantly.
JK: We started talking about your background in the aviation industry. What advice do you have for young people trying to start a career in the industry?
GM: I think the first thing I would say is you don't have to necessarily determine what your exact career goals for the next 15 or 20 years are but you can start with a shorter horizon. Definitely find things you have a passion for because you will spend time on things you are passionate about and your time will generate some expertise.
Determine what skills you need to be successful (both technical, functional, as well as leadership skills), and then pursue those skills through education, mentoring, etc.. I will tell you one of the things that I suggest to anyone that asks my advice on this topic—whether they're going into an aviation career or not—is setting your goals annually is incredibly important. Not just your professional goals, but…What are your scholastic goals? What are your personal goals? And most importantly WRITE THEM DOWN and review them often and reset them annually. Physically taking the time to write those goals down (and I do it on paper) has been something I have found matters greatly to me in my ability to achieve them. You don’t have to share with anybody else; they are your goals and yours alone.
If you're looking to create a career for yourself, whatever you want to do, you're going to have a much better chance of succeeding if you write them down and track yourself to them. Some you will hit and others you won’t, but it matters to have them. Goal-setting is a habit, and if you want to be successful you need to build good habits. Success is also a habit.
