Sun Country Airlines Holdings, Inc. (NASDAQ: SNCY) shares plunged 5.45% in pre-market trading on Wednesday, despite reporting record revenue and profitability in the fourth quarter of 2024. The airline's stock was under pressure due to concerns over margin pressures and potential softening demand in certain markets.

Sun Country reported total revenue of $260.4 million for Q4 2024, up 6.1% year-over-year, marking the highest quarterly revenue on record. However, the company's scheduled service TRASM (Total Revenue per Available Seat Mile) declined by 1% due to a 3.5% increase in ASMs (Available Seat Miles). This metric suggests that the airline's unit revenue growth could be facing headwinds.

While the company's diversified business model, including a strong cargo segment, has provided resilience, investors seem concerned about the potential impact of lower scheduled service demand and higher costs. Sun Country Airlines Holdings, Inc. expects its adjusted CASM (Cost per Available Seat Mile) to increase in the mid to high single digits in 2025 due to lower ASM production. Additionally, the company anticipates softness in the Caribbean market and competitive pressures in certain markets, leading to strategic capacity reductions.