Sunwing - Rumour Busting

[YYCcrew]

I dont know about you, but these articles seem to spell very clearly that sunwing is doing well, load, yield, margin and profit.... plus some new growth in the future?

Stephen Hunter, Sunwing: “We’re favoured by the Economic Crisis!”
Passing through Quebec last week, Stephen Hunter, President and Chief Operating Officer of Sunwing, wanted to put an end to rumours that, in his opinion were being spread by “competitors” and implied that the Hunter family’s company was experiencing financial problems. On the contrary, he says, the economic crisis will affect tour operators working in Europe, while those marketing sun destinations will be sheltered, even favoured! You’ve stated that you will be able to sell all the seats marketed for the winter season, in spite of an almost 50% increase in capacity. Does this mean that you are not affected by the economic crisis? We are affected in as much as the crisis has had a shrinking effect on our profit margins. However, the crisis has had a rather stimulating effect on demand. By the end of the winter, at the end of April, we should have sold all of the 700,000 seats we marketed across Canada, which would represent an increase in capacity of 48% over last winter. However, the crisis has pushed people into waiting until the last minute before making their reservations and it has also encouraged them to choose less expensive properties: 4 stars instead of 5, for example. And the result is that our profits will not increase as much as our capacity. They should have risen by 48%, but they will probably only increase by 23% to 25%. Will there not come a time when the recession will encourage consumers to become more cautious and to postpone their vacations to southern sun-filled destinations? They will not postpone their trips South: they’ll be postponing their trips to Europe…. Combined with the needs to find a getaway destination with travel to Europe, lower prices will stimulate demand for travel to sun destinations. In short, we are quite pleased that we did not launch our European program this year. Because you are intending to launch flights to Europe? We have been thinking about this for two years and we are going forward with the idea. The question is when?


and this one...


Stephen Hunter, Chief Operating Officer for Sunwing Travel Group. “We’re here for the long haul”
SUNWING DENOUNCES DEFAMATION EXPERIENCED IN QUEBEC.
Le Devoir Saturday February 28 2009. Article on Sunwing on 2 pages with 1 color picture in front page of business section.
By Gérard Bérubé
Sunwing Vacations is disturbing the status quo. Experiencing swift growth in Canada and exponential growth in Quebec, the tour operator has been the victim of a slander campaign this winter instigated by its rival and associate travel agencies. The company maintains that, should it feel compelled, it will ask its lawyers to act appropriately with the authors of these fallacious allegations. But Sunwing is especially insistent in reiterating its commitment to Quebec.”We’re here for the long haul!”
Stephen Hunter denounces the unfair competition and the campaign of defamation targeting his company in Quebec. Qualifying these acts and allegations as desperate measures, the Chief operating Officer for Sunwing Travel Group is collecting evidence against the travel agencies operated by or under the influence of its rival. “We will pursue the authors of these false allegations one by one. We don’t enjoy this type of battle. We don’t enjoy having to expend energy on negative things. It’s frustrating and stupid. There will always be rumours. But it’s gone too far. The integrity and reputation of the company, its employees and its clients are being sullied.”
Based on collected evidence and testimony, the rival and its agencies are spreading rumours implying that Sunwing is experiencing financial difficulties. Some are telling customers that they may be abandoned at their vacation destination should they choose to go with Sunwing’s services. Agencies associated with the competitor are thought to require clients to sign a liability waiver should they choose to do business with Sunwing. “It’s completely untrue!”
Stephen Hunter refuses to give the name of this rival and its network of 200 agencies. “We are currently at a point where our lawyers are talking. We are considering lodging a complaint with the Competition Bureau.” However, Sunwing’s founder and his father Colin Hunter want to talk, above all, about their commitment to Quebec.
Since its very first flight departing from Montreal, November 4, 2006, Sunwing Quebec has transported 300,000 client-passengers. “We have some 330 employees divided between our Montreal and Quebec bases. We operate from
five airports in Quebec, including Bagotville, Val-d’Or and Sept-Iles. Those who used to make fun of us are now imitating us,” affirms Sam Char, Executive manager.
Sunwing did not come here to skim the market or to pick its clientele from other existing players. “We are developing, we are stimulating the market. We are serving airports that no body wanted to serve. We are offering direct flights from Quebec to southern destinations all year long, which was never attempted before. We are offering flexibility with short-term trips of three, four or five days. We propose on-board service…. The agencies that operate in the regions where we are have seen their sales rise quickly; some have gone from single digit to double digits. Our impact in Quebec and our effects on local economies are factual.” Stephen Hunter is incensed. “Clients are satisfied and come back to Sunwing. They are asking for Sunwing. And word of mouth is powerful.”
Financial Statements
What of the company’s financial health? Sunwing is not a publicly traded company. Nonetheless, Stephen Hunter removes audited financial statements from his briefcase. According to the documents presented to Le Devoir and an agreement that the data not be published, the company’s growth is undeniable and profitability is genuine. Still according to the documents presented, the company’s balance sheet shows no debt.
The company’s sales are known. They hover around 500 million for 2008, compared with 200 million in 2007. They will be around 700 million for this year. Another well-known figure: the gross margin. Last year, Sunwing’s gross margin reached 8%, slightly above its 7.5% average, while its key rival in Canada – in the red last year, reminds Stephen Hunter – is around 3%.
The company now operates a fleet of 15 Boeing 737-800. “We’ve just added six aircrafts, a commitment of nearly 500 million dollars. Do you think a lessor will let its aircrafts go without demanding guarantees or a deposit, and without asking to see the books? Do you also think that we don’t have the numbers to back up our claims with the Office de la protection du consommateur?”
Stephen Hunter insists. “Companies that are in trouble reduce their staff, cut their routes and announce their reorganization. As for us, we increased our capacity throughout our network, we are adding aircrafts to our fleet, and we are announcing that we will be serving two new airports in Quebec. We have just increased our capacity to 35% in Canada and 48% in Quebec. As for our sales, growth varies from 12% to 15% over and above increased capacity. And we are increasing our summer service by 30%. Is this the portrait of a struggling business?”
“We are here for the long haul! We want this to be clear and that this defamation end. We are always going to defend our name, our company,” persists Sunwing’s Chief operating officer.

[ivanhoe]

I have no opinion either way on the viability of Sunwing but I do remember Michel LeBlanc running around telling everyone that JetsGo was doing just fine only months before it went down. I remember seeing him being interviewed on TV and he convinced me. I thought to myself no one would ever lie like that and risk their reputation. Wrong again...

[Rockie]

What Stephen Hunter says about Sunwing may in fact hold some truth and the company is doing great when everybody else is suffering from economic reality. But don't ever take what a senior business executive says about the health of the company at face value. They can say whatever they want and not be held accountable so there is always spin, and frequently outright lies. You will never get the unvarnished truth even from a public company, but especially not from a private one.

[Rubberbiscuit]

What of the company’s financial health? Sunwing is not a publicly traded company. Nonetheless, Stephen Hunter removes audited financial statements from his briefcase. According to the documents presented to Le Devoir and an agreement that the data not be published, the company’s growth is undeniable and profitability is genuine. Still according to the documents presented, the company’s balance sheet shows no debt.
The company’s sales are known. They hover around 500 million for 2008, compared with 200 million in 2007. They will be around 700 million for this year.

Unless the named journalist was "bought", I belive the avove quote says it all. Sunwing is a family business with a lot at stake for the Hunter family. They have proven to be business smart so far and I doubt they would run the company into the ground "Lleblanc style", if faced with tough or slow times. The Hunters have shown they will not hesitate to cancel routes etc where there is no money to be made. I firmly belive they would start by reducing capacity if the planes can no longer be filled.

My 2 cents.

[Realitychex]

How about the Sunwing bird stuck in PHL for 5+ days when one of its engines shut down on the 28th of Feb?

Six days for an accessory gearbox change? Six days for an engine change?

Most airlines with 15 aircraft would have at least one and probably two QEC'd engines available to them, and YYZ to PHL is a 500 mile drive, 9 hours at the most for a trucked-in unit.

Any well financed airline would have had that bird in the air with a QEC'd engine within 24-30 hours. Sunwing took about 5 days.

Enough said.

[Troubleshot]

How about the Sunwing bird stuck in PHL for 5+ days when one of its engines shut down on the 28th of Feb?

Six days for an accessory gearbox change? Six days for an engine change?

Most airlines with 15 aircraft would have at least one and probably two QEC'd engines available to them, and YYZ to PHL is a 500 mile drive, 9 hours at the most for a trucked-in unit.

Any well financed airline would have had that bird in the air with a QEC'd engine within 24-30 hours. Sunwing took about 5 days.

Enough said.

30g's a week to keep a fully QEC'd CFM56 on hot stand by...alot of operators risk manage engines or have an agreement in place to rent some for AOG's

WestJet has one in YYZ and one in YYC and look how may jets they have... and after a scheduled engine change at WestJet they are down to one for weeks.

If Sunwing just had a scheduled engine change they might have been a product of bad timing. I would say using a charter for 5 days was cheaper then having a fully QEC'd engine on hand all year anyway.

Were not talking lycomings here. The time factor to rebuild this CFM 56 was pretty good since it wasn't an exchange but a removal 2 days, build up 2-3 days, reinstall/runs/checks 2 days....and that is if the MRO had the extra manpower lying around to be quick...I doubt if the MRO in question was busting it's balls to help a small canadian tour operator get going as fast as they could.

24-30 hrs...yeah right....you couldn't do that in a scheduled engine change let alone a AOG away from base.

[Realitychex]

It's amazing what a strong financial covenant will do for an airline....and conversely, the impact of a chronically weak one......

[Troubleshot]

It's amazing what a strong financial covenant will do for an airline....and conversely, the impact of a chronically weak one......

We'll just chaulk this up to you don't know what your talkin about and leave it at that...

[Realitychex]

It's amazing what a strong financial covenant will do for an airline....and conversely, the impact of a chronically weak one......

We'll just chaulk this up to you don't know what your talkin about and leave it at that...

Talk is cheap. Show us the books.

Until then, unless you can show us Sunwing's magic pixie dust that dramatically alters aviation economics, simple math makes it pretty obvious what's going on there.

[Troubleshot]

I agree talk is cheap...we don't know for sure. But you can't gauge a companies health on the results of an AOG...which is how you came into this thread by the way.

I am talkin engine changes here and no matter how much cash you have the logistics of it go far and beyond money.

I've seen jets go much longer on the ground for much less...and money was not the issue.

[Rubberbiscuit]

How about the Sunwing bird stuck in PHL for 5+ days when one of its engines shut down on the 28th of Feb?

Six days for an accessory gearbox change? Six days for an engine change?

Most airlines with 15 aircraft would have at least one and probably two QEC'd engines available to them, and YYZ to PHL is a 500 mile drive, 9 hours at the most for a trucked-in unit.

Any well financed airline would have had that bird in the air with a QEC'd engine within 24-30 hours. Sunwing took about 5 days.

Enough said.

You DON'T KNOW WHAT YOU ARE TALKING ABOUT!

The inflight shutdown happened on the 27th. Here is a beautiful picture of the said bird leaving for YYZ the next day!

http://www.airliners.net/photo/Sunwing- ... id=1492698

It makes me laugh when people can't handle others apparent success.

[Vortex_driver]

Just wondering if they sent any plane to europe this winter (or is it in the summer they do that)
how are the conditions over there, the route they fly to on behalf of who, do they do any rotation on the flight crew?

[whiteguy]

Just wondering if they sent any plane to europe this winter (or is it in the summer they do that)
how are the conditions over there, the route they fly to on behalf of who, do they do any rotation on the flight crew?

Summer.

[PIC@Sunwing]

Starting this May, 28 Sunwing flight crews will be based in Europe. Pilots have the choice of going for the whole 6 months or for 3 months. At any given time at least 56 Sunwing pilots will be based in Europe. Additionnal pilots will be sent from Canada to cover vacations, sim, extra flying.....

There will be 4 aircraft at 4 bases. London (LGW) and Manchester on behalf of Viking Airlines. Prague on behalf of Travel Service and Heraklion on behalf of Eurocypria.

As opposed to some beliefs, no one at Sunwing is forced to go to Europe. Many senior guys have been doing this for many summers and they love their summers abroad.

No pilots will be laid off.

Those interested in a 6-month LOA will possibly get it.

[mattedfred]

i'm confused

you can go for 3 or 6 months or take an LOA but nobody gets laid off and nobody is forced to go?

lets say i didn't want to go, wouldn't a lay off be more beneficial than an LOA as i would be eligible for EI?

[Rubberbiscuit]

i'm confused

you can go for 3 or 6 months or take an LOA but nobody gets laid off and nobody is forced to go?

lets say i didn't want to go, wouldn't a lay off be more beneficial than an LOA as i would be eligible for EI?

The whole point is that nobody gets laid off. If you want a LOA, you might or might not be granted one.

[mattedfred]

sorry but i'm still confused

one can choose to go for 3 or 6 months

one can request an LOA which may not be approved

so if one didn't want to go then can one choose to get laid off if an LOA isn't approved so one can collect EI?

[...]

I have no opinion either way on the viability of Sunwing but I do remember Michel LeBlanc running around telling everyone that JetsGo was doing just fine only months before it went down. I remember seeing him being interviewed on TV and he convinced me. I thought to myself no one would ever lie like that and risk their reputation. Wrong again...

Ditto. I too wish all employed there a long happy debt free career.

Just a general FYI for everyone here, there is also one more CEO/owner in Canadian aviation that also went down after saying all was great and fine even after speculation by many respected people in the industry saying different.

The name of the person was Robert Obadia and the company was called Nationair Canada. They closed their doors April 1st, 1993. However, he didn't get the last laugh even though the joke was on ALL that got stranded that didn't heed our advice and warning.

Although there is no comparing Sunwing to Nationair & JetsGo because these two last mentioned companies were run by parasites posing a people.

[Vortex_driver]

Thanks PIC@Sunwing,

good info... I was also wondering if accomodation is provided(either staff house or reimbursed)... I'm guessing full per diem is not given for meals...? What about transportation? Do you rent yourself a car?

I'm asking because I was asking myself those question when I saw the ad in october... I guessing the hiring must be done for a while now?

Thanks again PIC@Sunwing, feel free to PM me if you prefer.

[florch]

sorry but i'm still confused

one can choose to go for 3 or 6 months

one can request an LOA which may not be approved

so if one didn't want to go then can one choose to get laid off if an LOA isn't approved so one can collect EI?

Why do you think that you must deploy overseas or accept an LOA as the only choices?

What about staying and working in Canada with the rest of the crews not deploying? Why do you want to collect EI so badly when you can stay in Canada and earn full salary?

[WhatThe?]

On the European tours, can you take your family? What type of accomidations are provided?

Thanks

[rd1331]

I have no opinion either way on the viability of Sunwing but I do remember Michel LeBlanc running around telling everyone that JetsGo was doing just fine only months before it went down. I remember seeing him being interviewed on TV and he convinced me. I thought to myself no one would ever lie like that and risk their reputation. Wrong again...

Ditto. I too wish all employed there a long happy debt free career.

Just a general FYI for everyone here, there is also one more CEO/owner in Canadian aviation that also went down after saying all was great and fine even after speculation by many respected people in the industry saying different.

The name of the person was Robert Obadia and the company was called Nationair Canada. They closed their doors April 1st, 1993. However, he didn't get the last laugh even though the joke was on ALL that got stranded that didn't heed our advice and warning.

Although there is no comparing Sunwing to Nationair & JetsGo because these two last mentioned companies were run by parasites posing a people.

To get there E&Y award last year they had to open there books to them. This year from what I hear they opened there books to multiple agencies to stop rumors and for licensing. And none of those that have seen the books have anything bad to say about them. So yes they are a Private company, but they are also a private company that has won MULTIPLE awards after opening there books up to be viewed by the award givers.

[Huge Hammer]

I have no opinion either way on the viability of Sunwing but I do remember Michel LeBlanc running around telling everyone that JetsGo was doing just fine only months before it went down. I remember seeing him being interviewed on TV and he convinced me. I thought to myself no one would ever lie like that and risk their reputation. Wrong again...

Ditto. I too wish all employed there a long happy debt free career.

Just a general FYI for everyone here, there is also one more CEO/owner in Canadian aviation that also went down after saying all was great and fine even after speculation by many respected people in the industry saying different.

The name of the person was Robert Obadia and the company was called Nationair Canada. They closed their doors April 1st, 1993. However, he didn't get the last laugh even though the joke was on ALL that got stranded that didn't heed our advice and warning.

Although there is no comparing Sunwing to Nationair & JetsGo because these two last mentioned companies were run by parasites posing a people.

To get there E&Y award last year they had to open there books to them. This year from what I hear they opened there books to multiple agencies to stop rumors and for licensing. And none of those that have seen the books have anything bad to say about them. So yes they are a Private company, but they are also a private company that has won MULTIPLE awards after opening there books up to be viewed by the award givers.

I don't care one way or the other but I want to point out that to get the ernst and young entrepreneur of the year award Sunwing did not have to open the books. The had to supply financial information but none of it had to be verified - they did not actually have to show the info, just say what it was.

http://www.ey.com/Global/assets.nsf/US/ ... n_form.pdf

I don't know what other awards they have won.

[ivanhoe]

This is not a good sign. When company executives start whining publicly , it is not uncommon for the dominoes to start falling.




TORONTO -- Sunwing Vacations is accusing its larger rival, Transat AT, of exploiting the economic downturn to justify its own irrational and predatory behaviour.

Transat reported a larger-than-expected $11.8-million first quarter loss this week that its chief executive, Jean-Marc Eustache, said was a result of a weak economy and a hyper-competitive market. But it is his obsession with maintaining a leadership position in every market that was behind the shortfall, alleged Colin Hunter, Sunwing chief executive, in an interview Thursday.

Mr. Eustache maintains a critical mass is important because travellers seldom look past their first seven internet hits when searching for a vacation these days.

"His obsession with having the first seven pages, has something to do with their losses," Mr. Hunter said. "He can't possibly afford to have the abundance of low prices with complete disregard to the cost."

Both tour operators have flooded the market with a glut of packaged tours this winter. With fewer passengers travelling this has driven down prices and their profits.

While Mr. Hunter acknowledged Sunwing's earnings were cut in half this winter, he maintains his company remains in the black, while Transat ran three-consecutive quarterly losses and announced this week it would cut its dividend as well.

Sunwing's financials should be taken with a grain of salt because it is privately held, and therefore doesn't have to make its books public.

But Mr. Hunter claims it's Sunwing's lower cost structure, including its fleet of smaller, more fuel-efficient aircraft, that is making it more resilient during this downturn.

Still, the company doesn't plan to grow at the same rate next year that it did this winter. Sunwing will take one new plane this Spring and has another two on order that it can defer if the market remains soft. Last winter, it grew its fleet from nine planes to 15.

Mr. Hunter's son, Stephen Hunter, Sunwing's head of operations, said the company had more than $500-million in sales last year and maintained a profit margin of at least 4% throughout. It is because of this that the younger Mr. Hunter accuses Transat of being the irrational player in the market.

"I believe it's trying to squeeze out its competitors, not just Sunwing, but others," he said. "When is the best time to squeeze someone? Right now, because you can blame it on the market, you can blame it on 100 different things."

[rd1331]

Actually just take a look at previous posts as to what else AT has been up too, and you will better understand.