Sun Country Airlines Reports First Quarter 2025 Results

• Revenue of $327 million, highest quarter on record⁽¹⁾
• GAAP diluted EPS of $0.66, operating income of $56 million and margin of 17.2%
• Adj. diluted EPS⁽²⁾ of $0.72, adj. operating income⁽²⁾ of $60 million, highest first quarter on record⁽¹⁾_, and margin of 18.3%
• Approved a new $25 million share repurchase authority

Sun Country Airlines Holdings, Inc. (“Sun Country Airlines,” “Sun Country,” the “Company”) reported financial results for its first quarter ended March 31, 2025.

“Sun Country is pleased to report our eleventh consecutive profitable quarter with GAAP EPS of $0.66 and adjusted diluted EPS of $0.72⁽²⁾,” said Jude Bricker, Chief Executive Officer of Sun Country. “Despite the challenging scheduled revenue environment, we delivered $327 million of total revenue, our highest quarterly total⁽¹⁾_, along with $56 million of GAAP operating income and $60 million of adjusted operating income⁽²⁾, also a quarterly record⁽¹⁾. Robust growth in our charter and cargo businesses helped offset lower than expected scheduled service revenue, demonstrating the effectiveness of our diversified business model. As a result, we were able to produce a GAAP operating margin of 17.2% and adjusted operating margin⁽²⁾ of 18.3% which was higher than last year. In addition to our excellent performance, our board of directors has approved a $25 million share repurchase authorization. As always, we want to thank our employees for their hard work and dedication during a challenging operating period.”

Overview of First Quarter

^{Amounts presented in the tables above may not recalculate due to rounding}

For the quarter ended March 31, 2025, Sun Country reported net income of approximately $37 million and income before income tax of $48 million, on $327 million of revenue. Adjusted income before income tax⁽²⁾ for the quarter was approximately $52 million. GAAP operating income during the quarter was $56 million, while adjusted operating income⁽²⁾ was $60 million, and GAAP operating margin was 17.2% and adjusted operating margin⁽²⁾ was 18.3%.

“Our first quarter results reflect the continued earnings power of our diversified business model,” said Bill Trousdale, Interim Chief Financial Officer. “Both cargo and charter revenue growth exceeded their block hour growth for the quarter. This strength offset the weaker first quarter scheduled service demand environment that we experienced. We expect strength in the charter and cargo businesses to persist, especially as we plan to add five more cargo aircraft to the fleet by the end of the third quarter, bringing us to a total of 20 cargo aircraft. We had been proactively re-sizing our scheduled service business to grow our cargo business at improved economics even before we saw close-in demand weakness in February. We believe this will position us well to rely on other portions of our business that are not as impacted by the macro weakness that we witnessed in the first quarter.”

Notable Highlights

• Completed a secondary public offering which resulted in certain investment funds managed by affiliates of Apollo Global Management, Inc. exiting their position in Sun Country. Through this process the Company purchased $10 million of shares acquired from the underwriters at a price per share equivalent to the price at which the underwriters purchased the shares from the investment funds managed by affiliates of Apollo Global Management, Inc.
• Sun Country and its flight attendants, represented by the International Brotherhood of Teamsters, ratified a new collective bargaining agreement.
• Sun Country reached agreement with the dispatchers represented by the Transport Workers Union (TWU) which was ratified on February 13.
• The Company entered into a four-year $75 million Revolving Credit Facility which represents a $50 million increase from the previous revolver.
• Entered into an agreement with Synchrony Bank to be the issuer of the Sun Country credit card. The partnership is expected to launch later this year.
• Taken possession of three incremental cargo aircraft. One aircraft entered service late in the quarter and the other two are currently in the induction process and expected to enter service during the second quarter.
• Named the recipient of the Air Transport World (ATW) Airline Market Leader Award for 2025.
• Extended the selling schedule through December 9, 2025.

Capacity

System block hours flown during the first quarter of 2025 grew by 5.8% year-over-year. All of this growth was allocated to the passenger segment, resulting in a 6.7% increase in scheduled service ASMs and 10.7% increase in charter block hours. Scheduled service ASMs are expected to decline in the second quarter 2025 by approximately seven percent to allow for planned cargo segment growth. Cargo block hours declined in the first quarter by 1.1% year-over-year due to normalization of the cargo schedules and some weather events throughout the quarter.

Revenue

The scheduled service domestic market was impacted by weaker off-peak demand in February which pressured unit revenue for the quarter. The Company reported total revenue of $327 million for the first quarter, which was 4.9% greater than the first quarter of 2024. Scheduled service TRASM⁽³⁾ of 11.63 cents decreased 4.7% year-over-year, while scheduled service ASMs increased 6.7%. The first quarter 2025 total fare per scheduled passenger of $198 was higher than first quarter 2024 by 1.0% but was offset by a 3.9 percentage point decline in load factor year over year. The Company’s first quarter charter service revenue was $55 million, an increase of 15.6% year-over-year, exceeding charter block hour growth of only 10.7% and offsetting the impact of lower fuel cost reimbursements from our customers.

In the first quarter of 2025, cargo revenue was $28 million, a 17.6% increase versus the first quarter of 2024 on a 1.1% decline in cargo block hours. This improvement was primarily driven by the annual rate escalation which went into effect in mid-December 2024 and the continuation of the new Amazon contract rates which went into effect in June 2024.

Cost

First quarter CASM fell 1.6%, while adjusted CASM⁽⁴⁾ was up 3.5% year-over-year. Total GAAP operating expenses increased 5.5% year-over-year, primarily due to a 5.8% increase in total block hours. The most significant non-fuel expenses that grew faster than the level of flying included salaries, maintenance, ground handling and landing fees. Salaries, which increased 12.9%, were mostly driven by an 8% increase in pilot headcount and a 6% contractual pilot wage scale increase that occurred at the end of 2024. Maintenance expenses, which increased 12.2%, were impacted by an increase in non-routine maintenance events and growth in the fleet and operations. Ground handling costs increased 24.6%, driven by a 5% increase in Passenger segment departures and a combination of rate increases at our outsourced ground stations as well as operational challenges in the quarter. Landing fees and airport rent increased 14.3% due to rate increases at airports.

Balance Sheet and Liquidity

Total liquidity⁽⁵⁾ was $227 million on March 31, 2025, while the Company’s net debt⁽⁶⁾ was $447 million.

Fleet

As of March 31, 2025, the Company had 45 aircraft in its passenger service fleet, had 15 freighter aircraft in its cargo fleet and had six aircraft that are currently on lease to unaffiliated airlines.

Guidance for Second Quarter 2025