• Total Revenue (Q4 2024): $260.4 million, up 6.1% year-over-year.
• Adjusted Operating Margin (Q4 2024): 10.6%, highest on record for Sun Country.
• Total Revenue (Full Year 2024): $1.08 billion, highest full-year on record.
• Operating Margin (Full Year 2024): 9.9%.
• Adjusted Operating Margin (Full Year 2024): 10.4%.
• Adjusted Diluted EPS (Full Year 2024): $1.05.
• Scheduled Service TRASM (Q4 2024): Down 1% on 3.5% growth in ASMs.
• Charter Revenue (Q4 2024): $48 million, up 2.3% year-over-year.
• Charter Revenue Growth (Excluding Fuel Reconciliation): Approximately 10% over last year.
• Cargo Revenue (Q4 2024): $28.6 million, up 13.1% year-over-year.
• Total Operating Expense Growth (Q4 2024): 2.6%.
• Total Liquidity (End of 2024): $205.6 million.
• Total Liquidity (As of February 3, 2025): $226.7 million.
• CapEx (Full Year 2024): $88 million.
• Net Debt-to-Adjusted EBITDA Ratio (End of 2024): 2 times.
• Guidance for Q1 2025 Total Revenue: Between $330 million and $340 million.
• Guidance for Q1 2025 Operating Margin: Between 17% and 21%.

• Warning! GuruFocus has detected 5 Warning Sign with SNCY.

Release Date: February 04, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• Sun Country Airlines Holdings Inc (NASDAQ:SNCY) reported its 10th consecutive quarter of profitability, with Q4 total revenue reaching $260.4 million, the highest on record.
• The company has a diversified business model with a strong charter and cargo segment, allowing for flexibility and resilience in operations.
• Sun Country Airlines Holdings Inc (NASDAQ:SNCY) reached agreements in principle with unions for flight attendants and dispatchers, indicating positive labor relations.
• The company expects cargo revenue to double by next year with the addition of new aircraft from its agreement with Amazon.
• Sun Country Airlines Holdings Inc (NASDAQ:SNCY) maintains a strong balance sheet with improved leverage, ending 2024 with a net debt-to-adjusted EBITDA ratio of 2 times.

Negative Points

• The company anticipates a decline in scheduled service ASMs by 3% to 5% in 2025, which could impact overall growth.
• There is pressure on adjusted CASM, expected to increase mid to high single digits in 2025 due to lower ASM productions.
• February is expected to be a softer month for unit revenues, impacting the overall performance of Q1 2025.
• Sun Country Airlines Holdings Inc (NASDAQ:SNCY) faces competitive pressures in certain markets, leading to strategic capacity reductions.
• The Caribbean market is experiencing some softness, which could affect revenue from these routes.

Q & A Highlights

Q: How does the strength in the European market impact Sun Country Airlines, especially in the first quarter? A: Jude Bricker, CEO, explained that while Sun Country does not fly to Europe, the reallocation of capacity into the Transatlantic market positively affects them. They are seeing strong sales in Mexican-Caribbean destinations, indicating no shift in demand away from these markets.

Q: Can you provide insights into the trajectory of margin and CASM evolution through the year? A: Dave Davis, CFO, stated that the first quarter is expected to be strong, following a typical seasonal pattern. The delivery dates of Amazon cargo aircraft will significantly influence the year's progression, with all aircraft expected to be in service by late summer.

Q: What are the booking patterns observed in the fourth quarter, and how do they compare to previous years? A: Jude Bricker noted that they are seeing higher fares with slightly lower load factors. They are holding capacity further out, resulting in less variability in pricing and building load factor early on, particularly in larger EU markets.

Q: Can you elaborate on the cargo expansion and the cadence of aircraft delivery? A: Dave Davis mentioned that the first cargo aircraft is expected to be in service by mid to late March, with all aircraft operational by the end of August. The rate of delivery is fast, and the rate escalations in their agreement with Amazon remain consistent with previous guidance.

Q: How is Sun Country planning to manage network priorities during the summer months, especially with pilot capacity shifting to cargo? A: Jude Bricker explained that they will cut marginal routes from the schedule, focusing on reducing capacity in low-yield markets. They expect fares to be substantially higher due to these capacity adjustments and underlying strong demand.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.