Minneapolis based Sun Country Airlines, fighting to survive a cash crunch, has warned its employees to prepare for the possibility of major layoffs, or a shutdown of the airline, as early as Dec. 1.

SunCountry is struggling to survive until the heavy winter travel season when it expects to turn a profit, but in the meantime they are taking drastic actions, including a 50 percent pay deferral for employees to improve their cash position.

SunCountry was looking for a short-term loan from its owner, Tom Petters, to address the cash shortage issue but Petters, the airline's majority shareholder, resigned as CEO of Petters Group Worldwide Monday because he is the target of a major federal fraud investigation.  While this is unrelated to SunCountry's business, it looks like Mr. Petters has his hands full with "other matters", so SunCountry will have to see financing elsewhere, which is none too easy in the credit crunch the country is experiencing currently.

Will SunCountry ultimately survive?  It's still too early to tell, but clearly this is an ominous sign.  One thing is for sure...  They certainly won't be the last airline to run into trouble in this difficult economy.