Image source: Sun Country Airlines
(Reuters) – Shares of Sun Country Airlines Holdings Inc, a low-cost carrier backed by private-equity firm Apollo Global Management Inc, jumped nearly 52% in their Nasdaq debut on Wednesday.
The stock opened at $33 per share, giving the airline a valuation of $1.84 billion, and closed at $36.38, lifting the valuation to over $2 billion.
The Minnesota-based airline raised $218.2 million in its initial public offering on Tuesday, selling shares at $24 each, above the marketed range of $21 to $23 apiece.
The listing comes at a time when weak travel demand continues to weigh on the financials of airlines globally, as people stay at home due to the COVID-19 pandemic.
Sun Country, however, is betting on a turnaround in its fortunes as people get vaccinated. The airline expects to be one of the “early beneficiaries” of the rebound, as it is focused on leisure travel rather than business travel, it said.
Sun Country operates a fleet of 31 passenger and 12 cargo aircraft. The carrier also provides air cargo services to Amazon.com Inc.
The carrier expanded services in January this year, adding here 16 new routes and nine new airports, encouraged by the COVID-19 vaccine rollout and betting on pent-up demand for leisure travel.
Founded in 1982 by Jim Olsen and a small group of pilots and flight attendants, Sun Country offers affordable flights and vacation packages to destinations across the United States, Mexico, Central America and the Caribbean. It was bought by Apollo in 2017.
The company said it plans to use a portion of the IPO proceeds to repay a loan it took from the U.S. government under the Coronavirus Aid, Relief, and Economic Security (CARES) Act.
Sun Country rival Frontier Group Holdings Inc also filed to go public earlier this month.
Barclays, Morgan Stanley, Deutsche Bank Securities, Goldman Sachs and Nomura were the underwriters for Sun Country’s offering.
Reporting by Niket Nishant in Bengaluru; Editing by Vinay Dwivedi and Shailesh Kuber.