Document and Entity Information
Document and Entity Information | 6 Months Ended |
Jun. 30, 2021 | |
Document and Entity Information [Abstract] | |
Document Type | S-1 |
Entity Registrant Name | Sun Country Airlines Holdings, Inc. |
Entity Central Index Key | 0001743907 |
Entity Filer Category | Non-accelerated Filer |
Entity Small Business | false |
Entity Emerging Growth Company | true |
Entity Ex Transition Period | false |
Amendment Flag | false |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS $ in Thousands | Dec. 31, 2020USD ($) |
Current Assets: | |
Cash and Equivalents | $ 62,028 |
Restricted Cash | 8,335 |
Investments | 5,624 |
Accounts Receivable, net of an allowance for credit losses of $297 and $224, respectively | 28,690 |
Short-term Lessor Maintenance Deposits | 3,101 |
Inventory, net of a reserve for obsolescence of $996 and $550, respectively | 5,407 |
Prepaid Expenses | 8,002 |
Other Current Assets | 5,553 |
Total Current Assets | 126,740 |
Property & Equipment, net: | |
Property & Equipment | 479,580 |
Accumulated Depreciation & Amortization | (65,065) |
Total Property & Equipment, net | 414,515 |
Other Assets: | |
Goodwill | 222,223 |
Other Intangible Assets, net | 93,110 |
Operating lease assets | 121,269 |
Aircraft Lease Deposits | 10,253 |
Long-term Lessor Maintenance Deposits | 22,584 |
Deferred Tax Asset | 36,216 |
Other Assets | 6,357 |
Total Other Assets | 512,012 |
Total Assets | 1,053,267 |
Current Liabilities: | |
Accounts Payable | 34,035 |
Accrued Salaries, Wages, and Benefits | 16,368 |
Accrued Transportation Taxes | 5,883 |
Air Traffic Liabilities | 101,075 |
Derivative Liabilities | 1,174 |
Over-market Liabilities | 9,281 |
Finance Lease Obligations | 11,460 |
Loyalty Program Liabilities | 7,016 |
Operating Lease Obligations | 34,492 |
Current Maturities of Long-term Debt | 26,118 |
Other Current Liabilities | 6,841 |
Total Current Liabilities | 253,743 |
Long-term Liabilities: | |
Over-market Liabilities | 28,128 |
Finance Lease Obligations | 95,710 |
Loyalty Program Liabilities | 15,053 |
Operating Lease Obligations | 112,707 |
Long-term Debt | 256,345 |
Other Long-term Liabilities | 7,764 |
Total Long-term Liabilities | 515,707 |
Total Liabilities | 769,450 |
Commitments and Contingencies (Note 17) | |
Stockholders' Equity: | |
Common stock with $0.01 par value, 995,000,000 shares authorized, 57,158,467 and 46,839,659 issued at June 30, 2021 and December 31, 2020, respectively. | 468 |
Loans to Stockholders | (3,500) |
Additional Paid in Capital | 248,525 |
Retained Earnings | 38,324 |
Total Stockholders' Equity | 283,817 |
Total Liabilities and Stockholders' Equity | 1,053,267 |
Aircraft and Flight Equipment | |
Property & Equipment, net: | |
Property & Equipment | 331,685 |
Leasehold Improvements and Ground Equipment | |
Property & Equipment, net: | |
Property & Equipment | 13,526 |
Computer Hardware and Software | |
Property & Equipment, net: | |
Property & Equipment | 7,845 |
Finance Lease Assets | |
Property & Equipment, net: | |
Property & Equipment | 117,833 |
Rotable Parts | |
Property & Equipment, net: | |
Property & Equipment | 8,691 |
Previously Reported | |
Stockholders' Equity: | |
Common stock with $0.01 par value, 995,000,000 shares authorized, 57,158,467 and 46,839,659 issued at June 30, 2021 and December 31, 2020, respectively. | 239,162 |
Additional Paid in Capital | $ 9,831 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) $ in Thousands | Dec. 31, 2020USD ($)$ / sharesshares |
CONDENSED CONSOLIDATED BALANCE SHEETS | |
Accounts Receivable, allowance for credit losses | $ | $ 224 |
Inventory, reserve for obsolescence | $ | $ 996 |
Common stock-par value (in dollars per share) | $ / shares | $ 0.01 |
Common stock-shares authorized | 94,443,000 |
Common stock-shares authorized | 995,000,000 |
Common stock-shares issued | 46,839,659 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS $ in Thousands | 3 Months Ended |
Apr. 10, 2018USD ($)$ / sharesshares | |
Financial Designation, Predecessor and Successor [Fixed List] | Predecessor |
Operating Revenues: | |
Operating Revenues | $ 197,452 |
Operating Expenses: | |
Aircraft Fuel | 45,790 |
Salaries, Wages, and Benefits | 36,964 |
Aircraft Rent | 28,329 |
Maintenance | 9,508 |
Sales and Marketing | 10,854 |
Depreciation and Amortization | 2,526 |
Ground Handling | 8,619 |
Landing Fees and Airport Rent | 10,481 |
Special Items, net | 271 |
Other Operating, net | 17,994 |
Total Operating Expenses | 171,336 |
Operating Income (Loss) | 26,116 |
Non-operating Income (Expense): | |
Interest Income | 96 |
Interest Expense | (339) |
Other, net | 37 |
Total Non-operating Income (Expense), net | (206) |
Income (Loss) before Income Tax | 25,910 |
Net Income (Loss) | $ 25,910 |
Net Income / (Loss) per share to common stockholders: | |
Basic | $ / shares | $ 0.26 |
Diluted | $ / shares | $ 0.26 |
Shares used for computation: | |
Weighted Average Common Shares Outstanding - Basic | shares | 100,000,000 |
Weighted Average Common Shares Outstanding - Diluted | shares | 100,000,000 |
Pro Forma | |
Non-operating Income (Expense): | |
Income Tax Expense / (Benefit) | $ 6,036 |
Net Income (Loss) | $ 19,874 |
Net Income / (Loss) per share to common stockholders: | |
Pro Forma Net Income per share-Basic | $ / shares | $ 0.20 |
Pro Forma Net Income per share-Diluted | $ / shares | $ 0.20 |
Shares used for computation: | |
Pro Forma shares used for computation-Basic | shares | 100,000,000 |
Pro Forma shares used for computation-Diluted | shares | 100,000,000 |
Passenger | |
Operating Revenues: | |
Operating Revenues | $ 172,897 |
Other | |
Operating Revenues: | |
Operating Revenues | $ 24,555 |
CONSOLIDATED STATEMENTS OF CHAN
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY - USD ($) | Warrants | Common StockPreviously Reported | Common Stock | Loans to Stockholders | APICPreviously Reported | APIC | Retained Earnings (Deficit)Cumulative Effect of New ASU | Retained Earnings (Deficit) | Cumulative Effect of New ASU | Total |
Financial Designation, Predecessor and Successor [Fixed List] | Predecessor | |||||||||
Balances, at Beginning of period at Dec. 31, 2017 | $ 34,422,000 | |||||||||
Balances, at Beginning of period (in shares) at Dec. 31, 2017 | 100,000,000 | |||||||||
Stockholder's Equity | ||||||||||
Net Income (Loss) | $ 25,910,000 | |||||||||
Distributions to Stockholder | (10,549,000) | |||||||||
Balances, at End of period at Apr. 10, 2018 | $ 49,783,000 | |||||||||
Balances, at End of period (in shares) at Apr. 10, 2018 | 100,000,000 | |||||||||
Balances, at Beginning of period at Dec. 31, 2017 | $ 34,422,000 | |||||||||
Balances, at Beginning of period (in shares) at Dec. 31, 2017 | 100,000,000 | |||||||||
Stockholder's Equity | ||||||||||
Initial Public Offering Expense Adjustment (in shares) | 1,416,645 | |||||||||
Balances, at End of period at Dec. 31, 2018 | $ 239,141,000 | $ (3,500,000) | $ 373,000 | $ (3,477,000) | $ (367,000) | $ (3,477,000) | $ 235,647,000 | |||
Balances, at End of period (in shares) at Dec. 31, 2018 | 40,005,885 | 6,743,400 | ||||||||
Stockholder's Equity | ||||||||||
Capital Purchase on Warrants | $ 165,711,000 | |||||||||
Capital Purchase on Warrants (in shares) | 40,005,885 | |||||||||
Capital Purchase on Shares | $ 22,064,000 | $ 22,064,000 | ||||||||
Capital Purchase on Shares (in shares) | 5,326,755 | |||||||||
Financial Designation, Predecessor and Successor [Fixed List] | Successor | |||||||||
Balances, at Beginning of period at Apr. 10, 2018 | $ 49,783,000 | |||||||||
Balances, at Beginning of period (in shares) at Apr. 10, 2018 | 100,000,000 | |||||||||
Stockholder's Equity | ||||||||||
Additional Capital Contribution | $ 43,866,000 | $ 43,866,000 | ||||||||
Stockholders Capital Contribution | $ 7,500,000 | (3,500,000) | 4,000,000 | |||||||
Initial Public Offering Expense Adjustment (in shares) | 1,416,645 | |||||||||
Net Income (Loss) | (367,000) | (367,000) | ||||||||
Stock-based Compensation | 373,000 | 373,000 | ||||||||
Balances, at End of period at Dec. 31, 2018 | $ 239,141,000 | (3,500,000) | 373,000 | $ (3,477,000) | (367,000) | $ (3,477,000) | 235,647,000 | |||
Balances, at End of period (in shares) at Dec. 31, 2018 | 40,005,885 | 6,743,400 | ||||||||
Stockholder's Equity | ||||||||||
Initial Public Offering Expense Adjustment (in shares) | 56,665 | |||||||||
Net Income (Loss) | 46,072,000 | 46,072,000 | ||||||||
Amazon Warrants | 3,594,000 | 3,594,000 | ||||||||
Stock-based Compensation | 1,888,000 | 1,888,000 | ||||||||
Balances, at End of period at Dec. 31, 2019 | $ 239,141,000 | $ 68,000 | (3,500,000) | $ 5,855,000 | 244,928,000 | 42,228,000 | 283,724,000 | |||
Balances, at End of period (in shares) at Dec. 31, 2019 | 40,005,885 | 6,800,065 | ||||||||
Stockholder's Equity | ||||||||||
Exercise of Apollo Warrants | $ 400,000 | (379,000) | 21,000 | |||||||
Exercise of Apollo Warrants (in shares) | (40,005,885) | 40,005,885 | ||||||||
Net Income (Loss) | 7,251,000 | 7,251,000 | ||||||||
Stock-based Compensation | 369,000 | 369,000 | ||||||||
Balances, at End of period at Mar. 31, 2020 | $ 468,000 | (3,500,000) | 244,918,000 | 49,479,000 | 291,365,000 | |||||
Balances, at End of period (in shares) at Mar. 31, 2020 | 46,805,950 | |||||||||
Balances, at Beginning of period at Dec. 31, 2019 | 239,141,000 | $ 68,000 | (3,500,000) | 5,855,000 | 244,928,000 | 42,228,000 | 283,724,000 | |||
Balances, at Beginning of period (in shares) at Dec. 31, 2019 | 40,005,885 | 6,800,065 | ||||||||
Stockholder's Equity | ||||||||||
Net Income (Loss) | 1,211,000 | |||||||||
Balances, at End of period at Jun. 30, 2020 | $ 468,000 | (3,500,000) | 245,306,000 | 43,439,000 | 285,713,000 | |||||
Balances, at End of period (in shares) at Jun. 30, 2020 | 46,805,950 | |||||||||
Balances, at Beginning of period at Dec. 31, 2019 | 239,141,000 | $ 68,000 | (3,500,000) | 5,855,000 | 244,928,000 | 42,228,000 | 283,724,000 | |||
Balances, at Beginning of period (in shares) at Dec. 31, 2019 | 40,005,885 | 6,800,065 | ||||||||
Stockholder's Equity | ||||||||||
Exercise of Apollo Warrants | $ 21,000 | 21,000 | ||||||||
Exercise of Apollo Warrants (in shares) | (40,005,885) | 40,005,885 | ||||||||
Net Income (Loss) | (3,904,000) | (3,904,000) | ||||||||
Amazon Warrants | 1,866,000 | 1,866,000 | ||||||||
Stock-based Compensation | $ 33,709 | 2,110,000 | 2,110,000 | |||||||
Balances, at End of period at Dec. 31, 2020 | 239,162,000 | $ 468,000 | (3,500,000) | 9,831,000 | 248,525,000 | 38,324,000 | 283,817,000 | |||
Balances, at End of period (in shares) at Dec. 31, 2020 | 46,839,659 | |||||||||
Balances, at Beginning of period at Mar. 31, 2020 | $ 468,000 | (3,500,000) | 244,918,000 | 49,479,000 | 291,365,000 | |||||
Balances, at Beginning of period (in shares) at Mar. 31, 2020 | 46,805,950 | |||||||||
Stockholder's Equity | ||||||||||
Net Income (Loss) | (6,040,000) | (6,040,000) | ||||||||
Stock-based Compensation | 388,000 | 388,000 | ||||||||
Balances, at End of period at Jun. 30, 2020 | $ 468,000 | (3,500,000) | 245,306,000 | 43,439,000 | 285,713,000 | |||||
Balances, at End of period (in shares) at Jun. 30, 2020 | 46,805,950 | |||||||||
Balances, at Beginning of period at Dec. 31, 2020 | 239,162,000 | $ 468,000 | (3,500,000) | 9,831,000 | 248,525,000 | 38,324,000 | 283,817,000 | |||
Balances, at Beginning of period (in shares) at Dec. 31, 2020 | 46,839,659 | |||||||||
Stockholder's Equity | ||||||||||
Shares Surrendered by Stockholders | $ (1,000) | 3,500,000 | (3,499,000) | |||||||
Shares Surrendered by Stockholders (in shares) | (140,737) | |||||||||
Stockholders Capital Contribution | $ 105,000 | 224,552,000 | 224,657,000 | |||||||
Initial Public Offering Expense Adjustment (in shares) | 10,454,545 | |||||||||
Net Income (Loss) | 12,416,000 | 12,416,000 | ||||||||
Income Tax Receivable Agreement | (115,200,000) | (115,200,000) | ||||||||
Amazon Warrants | 1,400,000 | 1,400,000 | ||||||||
Stock-based Compensation | 2,870,000 | 2,870,000 | ||||||||
Balances, at End of period at Mar. 31, 2021 | $ 572,000 | 473,848,000 | (64,460,000) | 409,960,000 | ||||||
Balances, at End of period (in shares) at Mar. 31, 2021 | 57,153,467 | |||||||||
Balances, at Beginning of period at Dec. 31, 2020 | $ 239,162,000 | $ 468,000 | $ (3,500,000) | $ 9,831,000 | 248,525,000 | 38,324,000 | 283,817,000 | |||
Balances, at Beginning of period (in shares) at Dec. 31, 2020 | 46,839,659 | |||||||||
Stockholder's Equity | ||||||||||
Net Income (Loss) | 64,169,000 | |||||||||
Balances, at End of period at Jun. 30, 2021 | $ 572,000 | 476,368,000 | (12,707,000) | 464,233,000 | ||||||
Balances, at End of period (in shares) at Jun. 30, 2021 | 57,158,467 | |||||||||
Balances, at Beginning of period at Mar. 31, 2021 | $ 572,000 | 473,848,000 | (64,460,000) | 409,960,000 | ||||||
Balances, at Beginning of period (in shares) at Mar. 31, 2021 | 57,153,467 | |||||||||
Stockholder's Equity | ||||||||||
Stockholders Capital Contribution | 349,000 | 349,000 | ||||||||
Net Income (Loss) | 51,753,000 | 51,753,000 | ||||||||
Amazon Warrants | 1,400,000 | 1,400,000 | ||||||||
Stock-based Compensation | 744,000 | 744,000 | ||||||||
Balances, at End of period at Jun. 30, 2021 | $ 572,000 | $ 476,368,000 | $ (12,707,000) | $ 464,233,000 | ||||||
Balances, at End of period (in shares) at Jun. 30, 2021 | 57,158,467 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | 12 Months Ended | |
Apr. 10, 2018 | Dec. 31, 2018 | Dec. 31, 2020 | Dec. 31, 2019 | |
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS | ||||
Financial Designation, Predecessor and Successor [Fixed List] | Predecessor | Successor | ||
Net Income (Loss) | $ 25,910 | $ (367) | $ (3,904) | $ 46,072 |
Adjustments to reconcile Net Income to Cash from Operating Activities: | ||||
Depreciation and Amortization | 2,526 | 14,405 | 48,086 | 34,877 |
Reduction in Operating Lease Right-of-use Assets | 25,880 | 33,541 | ||
Loss on Asset Transactions, net | (811) | 413 | 1,249 | |
Unrealized Loss (Gain) on Fuel Derivatives | 12,006 | 12,206 | (10,791) | |
Amortization of Over-market Liabilities | (17,275) | (10,421) | (14,064) | |
Deferred Income Taxes | 147 | (789) | 14,022 | |
Amazon Warrants Vested | 1,866 | |||
Stock-based Compensation Expense | 373 | 2,110 | 1,888 | |
Amortization of Debt Issuance Costs | 252 | 1,523 | 481 | |
Changes in Operating Assets and Liabilities: | ||||
Accounts Receivable | 8,148 | 20,732 | (6,282) | (11,353) |
Due From Predecessor Parent | (7,370) | |||
Inventory | (293) | 156 | (614) | (869) |
Prepaid Expenses | (5,519) | (6,171) | 15 | 2,278 |
Lessor Maintenance Deposits | (3,148) | (14,193) | (9,415) | (17,466) |
Aircraft Lease Deposits | (1,151) | 133 | 1,290 | (1,179) |
Other Assets | (718) | (5,447) | (566) | |
Accounts Payable | 21,690 | (9,710) | (7,174) | 9,037 |
Accrued Transportation Taxes | 1,287 | (1,868) | (7,845) | 3,359 |
Air Traffic Liabilities | (33,983) | 33,470 | (15,584) | 11,309 |
Loyalty Program Liabilities | 71 | (13,216) | (823) | (5,925) |
Reduction in Operating Lease Obligations | (28,352) | (34,365) | ||
Other Liabilities | (3,585) | (3,581) | 3,635 | 1,737 |
Net Cash Provided by (Used in) Operating Activities | 4,583 | 13,764 | 374 | 63,272 |
Cash Flows from Investing Activities: | ||||
Purchases of Property & Equipment | (2,577) | (78,687) | (96,298) | (69,816) |
Proceeds from the sale of Property & Equipment | 200 | |||
Purchase of Investments | (118) | (5,372) | (927) | (3,394) |
Proceeds from the Sale of Investments | 101 | 3,236 | 997 | 3,646 |
Net Cash Used in Investing Activities | (2,594) | (80,823) | (96,028) | (69,564) |
Cash Flows from Financing Activities: | ||||
Cash Contributions from Stockholders | 47,866 | |||
Cash Distributions to Stockholder | (10,549) | |||
Proceeds Received from Exercise of Apollo Warrants | 21 | |||
Proceeds from Borrowings | 63,341 | 265,307 | 41,630 | |
Proceeds received for Amazon Warrants | 4,667 | |||
Repayment of Finance Lease Obligations | (49) | (3,160) | (89,697) | (8,258) |
Repayment of Borrowings | (82) | (5,854) | (69,906) | (10,153) |
Debt Issuance Costs | (4,186) | (557) | ||
Net Cash Provided by Financing Activities | (10,680) | 102,193 | 101,539 | 27,329 |
Net Increase (Decrease) in Cash, Cash Equivalents and Restricted Cash | (8,691) | 35,133 | 5,885 | 21,037 |
Cash, Cash Equivalents and Restricted Cash-Beginning of the Period | 16,999 | 8,308 | 64,478 | 43,441 |
Cash, Cash Equivalents and Restricted Cash-End of the Period | 8,308 | 43,441 | 70,363 | 64,478 |
Supplemental information: | ||||
Cash Payments for Interest | $ 402 | 4,364 | 20,304 | 16,424 |
Cash Payments for Income Taxes, net | 11 | 47 | 385 | |
Lease Deposits Applied Against the Purchase of Aircraft | 19,976 | |||
Aircraft and Flight Equipment Acquired through Finance Leases | 84,773 | 108,978 | ||
Right-of-use Assets Acquired through Operating Leases | 5,470 | |||
Purchases of Property & Equipment in Accounts Payable | $ 734 | $ 991 | ||
Loans to Stockholders | $ 3,500 |
CONSOLIDATED STATEMENTS OF CA_2
CONSOLIDATED STATEMENTS OF CASH FLOWS (Parentheticals) - USD ($) $ in Thousands | Jun. 30, 2021 | Dec. 31, 2020 | Jun. 30, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | Apr. 10, 2018 | Dec. 31, 2017 |
Reconciliation of Cash, Cash Equivalents and Restricted Cash | |||||||
Cash and Equivalents | $ 310,723 | $ 62,028 | $ 32,084 | $ 51,006 | $ 29,600 | ||
Restricted Cash | 4,762 | 8,335 | 2,568 | 13,472 | 13,841 | $ 8,308 | |
Total Cash, Cash Equivalents and Restricted Cash | $ 315,485 | $ 70,363 | $ 34,652 | $ 64,478 | $ 43,441 | $ 8,308 | $ 16,999 |
COMPANY BACKGROUND
COMPANY BACKGROUND | 6 Months Ended | 12 Months Ended |
Jun. 30, 2021 | Dec. 31, 2020 | |
COMPANY BACKGROUND | ||
COMPANY BACKGROUND | 1. COMPANY BACKGROUND Sun Country Airlines Holdings, Inc. is the parent company of Sun Country, Inc., which is a certificated air carrier providing scheduled passenger service, air cargo service, charter air transportation and related services. Services are provided to the general public, cargo customers, military branches, wholesale tour operators, individual entities, schools and companies for air transportation to various U.S. and international destinations. Except as otherwise stated, the financial information, accounting policies, and activities of Sun Country Airlines Holdings, Inc. are referred to as those of the Company (the “Company” or “Sun Country”). Stock Split In March 2021, the Company effected an approximately 18.8886 for 1 stock split of its common stock (the “Stock Split”), with exercise prices for outstanding warrants and options adjusted accordingly by dividing such prices by the Stock Split ratio. The par value of the common stock was not adjusted as a result of the Stock Split. As a result of the Stock Split, the Company issued an additional 44,226,587 shares of common stock. All references to common stock, warrants to purchase common stock, stock options, per share amounts and related information contained in the accompanying Condensed Consolidated Financial Statements and applicable disclosures have been retroactively adjusted to reflect the effect of the Stock Split for all periods. Approval of the Omnibus Incentive Plan In March 2021, the stockholders approved the Sun Country Airlines Holdings, Inc. 2021 Omnibus Incentive Plan (the “Plan”). The Plan authorizes that no more than 3,600,000 shares of Common Stock may be delivered in the aggregate pursuant to Awards granted under the Plan. An “Award” means any Incentive Stock Option, Nonqualified Stock Option, Stock Appreciation Right, Restricted Stock, Restricted Stock Unit, Other Stock-Based Award, or Other Cash-Based Award granted under the Plan. Upon implementation of this new Plan, there were no more grants under the October 2018 equity incentive plan. Awards already issued under the 2018 plan are not impacted by the new Plan. Initial Public Offering of Common Stock and Other Stock Sales On March 16, 2021, the Company priced its initial public offering of 9,090,909 shares of common stock to the public at $24.00 per share. The stock began trading on the NASDAQ on March 17, 2021 under the symbol SNCY. The underwriters had an option to purchase an additional 1,363,636 shares from the Company at the public offering price, which they exercised. In total, all 10,454,545 shares were issued on March 19, 2021 and the net proceeds to the Company were $225,006 after deducting underwriting discounts and commissions, and other offering expenses. Concurrently with the closing of the initial public offering, SCA Horus Holdings, LLC, an affiliate of investment funds managed by affiliates of Apollo Global Management (the “Apollo Stockholder”), also completed a concurrent private placement in which the Apollo Stockholder sold 2,216,312 and 2,216,308 shares of common stock to PAR Investment Partners, L.P. and certain funds or accounts managed by an investment adviser subsidiary of Blackrock, Inc., respectively. Each of the two sales In May 2021, the Apollo Stockholder sold 7,250,000 shares of the Company’s common stock at a public offering price of $34.50 per share. The underwriters in this offering exercised their option to purchase an additional 1,087,500 shares at the public offering price, bringing the total offering to 8,337,500 shares. The Company incurred offering expenses of $640 and did not receive any of the proceeds from the offering. All proceeds went to the Apollo Stockholder. 1. COMPANY BACKGROUND (continued) Amazon Agreement On December 13, 2019, the Company signed a six-year contract (with two, two-year extension options, for a maximum term of 10 years) with Amazon.com Services, Inc. (together with its affiliates, “Amazon”) to provide cargo services under an Air Transportation Services Agreement (the “ATSA”). The agreement is structured for the Company to provide crew, maintenance, and insurance (“CMI”) services to Amazon. Sun Country began flying for Amazon in May 2020. On June 27, 2020, Amazon and the Company signed an amendment to the December 2019 agreement that increased the number of aircraft Sun Country operates from 10 to 12. In December 2019, in connection with the ATSA, the Company issued warrants to Amazon to purchase an aggregate of up to 9,482,606 shares of common stock at an exercise price of approximately $15.17 per share. The exercise period of these warrants is through the eighth anniversary of the issue date. Of the 9,482,606 total Amazon warrants issued, 632,183 vested upon execution of the ATSA in December 2019. Thereafter, an additional 63,217 warrants will vest for each milestone of $8,000 in qualifying payments made by Amazon to the Company. During the three and six months ended June 30, 2021, 189,652 and 379,304 warrants vested, respectively. The cumulative warrants vested as of June 30, 2021 were 1,264,356. No warrants vested during the six months ended June 30, 2020. | 1. COMPANY BACKGROUND Sun Country Airlines Holdings, Inc. f/k/a SCA Acquisition Holdings, LLC (the “Successor”) was formed on December 8, 2017 by funds managed by affiliates of Apollo Global Management (“Apollo”) for the purpose of purchasing (the “Acquisition”) Sun Country, Inc. d/b/a Sun Country Airlines (the “Predecessor”). Sun Country, Inc. f/k/a MN Airlines, LLC is a privately-owned certified air carrier providing scheduled passenger service, air cargo service, charter air transportation and related services. Except as otherwise stated, the financial information, accounting policies, and activities of Sun Country Airlines are referred to as those of the Company (the “Company”, “SCA” or “Sun Country”). On April 11, 2018 (the “Acquisition Date”), SCA Acquisition Holdings, LLC acquired 100 percent of MN Airlines’ stockholder equity. The Acquisition was accounted for as a business combination using the purchase method of accounting, which requires, among other things, that assets acquired and liabilities assumed be recognized on the balance sheet at their fair value as of the Acquisition Date. Reorganization Transactions On January 31, 2020, all 40,005,885 outstanding Apollo Warrants were exercised to purchase common stock of SCA Acquisition Holdings, LLC. Also on January 31, 2020, SCA Acquisition Holdings, LLC was converted into a Delaware corporation pursuant to a statutory conversion and changed its name to Sun Country Airlines Holdings, Inc. In connection with the conversion to a corporation, all of the outstanding shares of SCA Acquisition Holdings, LLC common stock with a $0.01 par value were converted into shares of Sun Country Airlines Holdings, Inc. common stock. The outstanding warrants held by Amazon to purchase shares of SCA Acquisition Holdings, LLC common stock were converted into warrants to purchase shares of Sun Country Airlines Holdings, Inc. common stock and all of the outstanding options to purchase shares of SCA Acquisition Holdings, LLC common stock were converted into options to purchase shares of Sun Country Airlines Holdings, Inc. common stock. Amazon Agreement On December 13, 2019, the Company signed a six-year contract (with two, two-year extension options, for a maximum term of 10 years) with Amazon.com Services, Inc. (together with its affiliates, “Amazon”) to provide air cargo services (“Amazon Agreement”). The option to renew the Amazon Agreement for two additional two-year terms is at Amazon’s sole discretion, subject to Amazon providing Sun Country with at least 180 days’ prior written notice before the expiration of the then-current term. Sun Country began flying for Amazon in the second quarter of 2020. On June 27, 2020, Amazon and the Company signed an amendment to the December 13, 2019 agreement that added two aircraft. As of December 31, 2020, Sun Country operates 12 Boeing 737-800 cargo aircraft for Amazon. Amazon supplies the aircraft and reimburses the Company for certain operating expenses, including fuel and heavy maintenance. The aircraft fly under the Company’s air carrier operating certificate and the Company supplies the crew, non-heavy maintenance and insurance for the aircraft. Amazon pays a fixed monthly fee per aircraft as well as a set rate per flight cycle and block hour flown. 1. COMPANY BACKGROUND (continued) In December 2019, in connection with the Amazon Agreement, the Company issued warrants to Amazon to purchase an aggregate of up to 9,482,606 shares of common stock at an exercise price of approximately $15.17 per share, which represented approximately 15% of the Company’s common stock on that date. The exercise period of these warrants is through the eighth anniversary of the issue date. The Amazon warrants were valued at $7.38 per share. The fair value of the warrants was determined using a Monte Carlo simulation which involves inputs such as expected volatility, the risk-free rate of return and the probability of achieving varying outcomes under the Amazon Agreement. The fair value of warrants that are expected to vest in the future will be recorded as contra-revenue over the vesting term of the warrants on a pro-rata basis as the flights occur. For so long as Amazon holds these warrants or any shares of common stock issued upon exercise of the warrants and the Amazon Agreement remains in effect, Amazon will have the right to nominate a member or an observer to SCA’s board of directors. Of the 9,482,606 total Amazon warrants issued, 632,183 vested upon execution of the Amazon Agreement on December 13, 2019. Thereafter, an additional 63,217 warrants will vest for each milestone of $8 million in payments made by Amazon to the Company, excluding reimbursable and direct pass-through expenses. During the year ended December 31, 2020, 252,869 warrants vested. |
BASIS OF PRESENTATION AND SUMMA
BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 6 Months Ended | 12 Months Ended |
Jun. 30, 2021 | Dec. 31, 2020 | |
BASIS OF PRESENTATION | ||
BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 2. BASIS OF PRESENTATION The accompanying unaudited Condensed Consolidated Financial Statements of Sun Country Airlines Holdings, Inc. should be read in conjunction with the consolidated financial statements contained in the Company’s Annual Report for the year ended December 31, 2020, which is included in the Company’s Final Prospectus dated March 16, 2021. During the six months ended June 30, 2021, there were no significant changes to the Company’s critical accounting policies. Certain prior period Stockholders’ Equity amounts were reclassified to conform to the current period presentation. This involved reducing the Common Stock values to $0.01 times the shares outstanding and reclassifying those dollars to Additional Paid-In Capital. These reclasses were $238,694 as of December 31, 2020, June 30, 2020 and March 31, 2020. The reclass as of December 31, 2019 was $239,073. Management believes that all adjustments necessary for the fair presentation of results, consisting of normally recurring items, have been included in the unaudited Condensed Consolidated Financial Statements for the interim periods presented. All material intercompany balances and transactions have been eliminated in consolidation. The preparation of financial statements in accordance with accounting principles generally accepted in the United States (“GAAP”) requires management to make certain estimates and assumptions that affect the reported amounts of assets and liabilities, revenues and expenses, and the disclosure of contingent assets and liabilities at the date of the financial statements. Actual results could differ from those estimates. Significant areas of judgment relate to passenger revenue recognition, maintenance under the built-in overhaul method, equity-based compensation, tax receivable agreement, lease accounting, impairment of goodwill, impairment of long-lived and intangible assets, air traffic liabilities, the loyalty program, as well as the valuation of Amazon warrants. Due to severe impacts from the global coronavirus (“COVID-19”) pandemic, seasonal variations in the demand for air travel, the volatility of aircraft fuel prices and other factors, operating results for the three and six months ended June 30, 2021 are not necessarily indicative of operating results for future quarters or for the year ended December 31, 2021. Air travel is also significantly impacted by general economic conditions, the amount of disposable income available to consumers, unemployment levels, corporate travel budgets, extreme or severe weather and natural disasters, disease outbreaks, fears of terrorism or war, and other factors beyond the Company’s control. 2. BASIS OF PRESENTATION (continued) The Company operates its fiscal year on a calendar year basis. Recently Adopted Accounting Standards Income Taxes - Simplifying the Accounting for Income Taxes— Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes | 2. BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Principles of Consolidation— The Company operates its fiscal year on a calendar year basis. Use of Estimates— Change in Presentation— A summary of significant accounting policies consistently applied in the preparation of the accompanying financial statements is as follows: Cash and Equivalents— 2. BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) Restricted Cash— Investments— Accounts Receivable— January 1, 2018 Lessor Maintenance Deposits— Maintenance reserve payments that are expected to be recoverable via reimbursable expenses are reflected as Lessor Maintenance Deposits on the accompanying Consolidated Balance Sheets. These deposits are expected to be reimbursed to SCA upon performance of maintenance activities. Upon completion of the maintenance event, the lessor is billed and the amount due is recorded in Account Receivable. Amounts not deemed probable of recovery are expensed as incurred. At the Acquisition Date, the Company established a contra-asset to represent the Company’s obligation to perform planned maintenance events on leased aircraft held as of the Acquisition Date. As reimbursable maintenance events are performed and maintenance expense is incurred, the contra-asset is recognized as a reduction to Maintenance expense. The Company’s lease agreements entered into subsequent to the Acquisition Date are structured to allow SCA to access and recover the unused maintenance reserve payments. As such, maintenance reserve payments related to these lease agreements are expected to be recovered in full and are reflected as Lessor Maintenance Deposits on the accompanying Consolidated Balance Sheets. Maintenance reserve payments related to seasonal aircraft are expensed when incurred. Inventory— 2. BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) Property & Equipment— Airframes 10 Engines—Core 7 Engines—Initial Greentime (time remaining until the first scheduled major maintenance event) 1st scheduled maintenance event Leasehold Improvements, Aircraft, other 3 Office and Ground Equipment 5 Computer Hardware and Software 3 Property and Equipment under Finance Leases 3 Rotable Parts 6 Modifications that enhance the operating performance or extend the useful lives of leased airframes are considered leasehold improvements and are capitalized and depreciated over the economic life of the asset or the term of the lease, whichever is shorter. Similar modifications made to owned aircraft are capitalized and depreciated consistent with the Company’s policy. The Company capitalizes certain internal and external costs associated with the acquisition and development of internal-use software for new products, and enhancements to existing products, that have reached the application development stage and meet recoverability tests. Capitalized costs include external direct costs of materials and services utilized in developing or obtaining internal-use software, and labor cost for employees who are directly associated with, and devote time, to internal-use software projects. Finance leases are recorded at net present value of future minimum lease payments. The Company depreciates Rotable Parts to an estimated residual value using the pooling life method. Depreciation under the pooling life method is calculated over the estimated average useful life of the related aircraft. Evaluation of Long-Lived Assets— April 11, 2018 January 1, 2018 Equity Incentive Plan— Stockholders’ Equity— In conjunction with the issuance of 1,416,645 shares of Common Stock in 2018 to two stockholders, the Company issued, recourse promissory notes of $3,500 which are included as Loans to Stockholders on the Consolidated Statements of Changes in Stockholders’ Equity. In February of 2021, the promissory notes were repaid in full with equivalent shares of stock. 2. BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) As of December 31, 2020, Amazon held approximately 885,052 vested warrants to acquire common stock of the Company at an exercise price of approximately $15.17 per share. Deferred Offering Costs— Goodwill and Other Intangible Assets— The value of Goodwill and Other Indefinite-lived Intangible Assets is assessed under either a qualitative or quantitative approach. Under a qualitative approach, SCA considers various market factors, including certain key assumptions, such as the market value of other airlines, fuel prices, the overall economy, passenger yields and changes to the regulatory environment. SCA analyzes these factors to determine if events and circumstances have affected the fair value of Goodwill and Other Indefinite-lived Intangible Assets. If it is determined that it is more likely than not that the asset may be impaired, the Company uses a quantitative approach to determine the reporting unit or intangible asset’s fair value incorporating the key assumptions listed below. An impairment charge is recorded for the amount of carrying value that exceeds the determined fair value as of the testing date. When the Company evaluates Goodwill for impairment using a quantitative approach, the Company estimates the fair value of the consolidated reporting unit by considering both comparable public company multiples (a market approach) and projected discounted future cash flows (an income approach). When the Company performs a quantitative impairment assessment of indefinite-lived intangible assets, fair value is estimated based on (1) recent market transactions, where available, (2) the royalty method for the Sun Country tradename (which assumes hypothetical royalties generated from using SCA’s tradename) or (3) projected discounted future cash flows (an income approach). The Company performed its most recent annual Goodwill and Other Indefinite-Lived Intangible Assets impairment analysis as of October 1, 2020 and did not recognize any impairment losses for the years ended December 31, 2020 or 2019 or for the periods April 11, 2018 to December 31, 2018 and January 1, 2018 to April 10, 2018. See Note 3—Impact of the COVID-19 Pandemic. Long-term Debt— Revenue Recognition— The Company initially defers ticket sales as an air traffic liability and recognizes revenue when the passenger flight occurs. Unused non-refundable tickets expire at the date of scheduled travel and are recorded as revenue unless the customer notifies the Company in advance of such date that the customer will not travel. If notification is made, a travel credit is created for the face value less applicable change fees. Travel credits can be redeemed toward future travel for up to 12 months after the date of the original booking. A portion of travel credits will expire unused. The Company records an estimate for travel credits that will expire unused in passenger revenue. These estimates are based on historical experience of travel credit activity and consider other facts, such as recent program changes and modifications that could affect the ultimate usage patterns of tickets and travel credits. Due to inherent uncertainly of the current operating environment as a result of COVID-19, adjustments to these estimates could be material in the future. 2. BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) Ancillary revenue for baggage fees, seat selection fees, and on-board sales is recognized when the associated flight occurs. Prior to adoption of the new revenue recognition model effective January 1, 2019, the Company recognized revenue for change fees as the transactions occurred. Under the new standard, revenue for change fees is deferred and recognized when the passenger travel is provided. Fees received in advance of the flight date are initially recorded as an air traffic liability. Charter revenue is recognized at the time of departure when transportation is provided. Cargo revenue is typically recognized based on hours flown, number of flights, and the amount of aircraft resources provided during a reporting period. Pursuant to ASC 606, Revenue from Contracts with Customers, the Amazon Agreement contains three performance obligations: Flight Services, Heavy Maintenance and Fuel. As Sun Country is the principal in providing Flight Services, revenue and related costs are recognized gross on the Statement of Operations. Sun Country acts as the agent in providing the Heavy Maintenance and Fuel performance obligations, which are reimbursed by Amazon based on the actual costs incurred. Consumption of aircraft fuel and heavy maintenance are recognized in revenue, net of the associated costs incurred to fulfill the performance obligations. The transaction price is allocated to the performance obligations based on their relative standalone selling price. The transaction price for flight services, which includes an upfront payment for startup costs, is reduced by the estimated value of warrants to be issued to Amazon based on expected performance under the Amazon Agreement. Loyalty Program— Co-branded Credit Card Program— Airframe and Engine Maintenance— The Company applies the Built-in Overhaul method for significant maintenance costs of owned airframe and engines. Under this method, the value of time remaining until the first scheduled major maintenance event (“greentime”) is capitalized and amortized until that first major maintenance event, assuming no residual value. In addition, the value in excess of the greentime is capitalized and amortized over the useful life. These expenses are reported as a component of Depreciation and Amortization on the accompanying Consolidated Statements of Operations. The estimated period until the next scheduled major maintenance event is estimated based on assumptions including estimated cycles, hours, and months, required maintenance intervals, and the age/ condition of related parts. Certain SCA aircraft lease agreements contain provisions that require SCA to return aircraft to the lessor in a certain maintenance condition. A liability associated with returning leased aircraft is accrued when incurrence of lease return costs becomes probable. The amount of these costs typically can be estimated near the end of the lease term, after the aircraft has completed its last maintenance cycle prior to being returned. 2. BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) Income Taxes— Concentration Risk— Approximately 57%, 58% and 48% of the Company’s fuel purchases were made from two vendors for the years ended December 31, 2020, 2019 and 2018, respectively. Approximately 52% of the Company’s workforce were under union contracts as of December 31, 2020 with three different unions: Air Line Pilots Association (“ALPA”), International Brotherhood of Teamsters (“IBT”) and Transport Workers Union (“TWU”). Approximately 98% of the Company’s union workforce are under contracts that have expired or will be expiring within a year. The following table shows the Company’s airline employee groups represented by unions: Employee Group Number of Active Employees Represented Union Date on which Collective Bargaining Agreement Becomes Amendable Sun Country Pilots 395 ALPA October 31, 2020 Sun Country Flight Attendants 466 IBT December 31, 2019 Sun Country Dispatchers 22 TWU November 30, 2024 Recently Adopted Accounting Standards Revenue from Contracts with Customers— Revenue from Contracts with Customers The adoption of the New Revenue Standard impacts the Company’s accounting for outstanding loyalty points earned through travel by SCA loyalty program members. There is no change in accounting for issuances of loyalty points to SCA’s co-branded card partner as those are currently reported in accordance with the New Revenue Standard. Through December 31, 2018, the Company used the incremental cost method to account for the portion of the loyalty program liabilities related to points earned through travel, which were valued based on the estimated incremental cost of carrying one additional passenger. The New Revenue Standard required the Company to change to the deferred revenue method and apply a relative standalone selling price approach whereby a portion of each passenger ticket sale attributable to loyalty points earned is deferred and recognized in passenger revenue upon future redemption. Upon adoption of the New Revenue Standard, the Company reclassified certain ancillary revenues from Other Revenue to Passenger Revenue. In addition, certain fees previously recognized when incurred by the customer are deferred and recognized as revenue when passenger travel is provided. 2. BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) Upon adoption of the standard on January 1, 2019 the Company made an adjustment to reduce Retained Earnings by $3,477. Leases— Leases Upon adoption of the standard on January 1, 2019 the Company recorded an Operating Lease Right-of-use (“ROU”) Asset of $178,577 (net of balance sheet reclassifications) and Operating Lease Liabilities of $204,790 on the Consolidated Balance Sheet. This ROU Asset was net of $27,004 reclassified from Over-market Liabilities and $791 reclassified from Prepaid Rent. Capitalized Software Costs— Intangibles—Goodwill and Other—Internal-Use Software (Subtopic 350-40): Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract Non-employee Share-based Payment Accounting— Improvements to Non-employee Share-based Payment Accounting Compensation—Stock Compensation Compensation—Stock Compensation Revenue from Contracts with Customers (Topic 606) Changes to the Disclosure Requirements for Fair Value Measurement— Fair Value Measurement (Topic 820): Disclosure Framework—Changes to the Disclosure Requirements for Fair Value Measurement Financial Instruments—Credit Losses— Financial Instruments—Credit Losses : Measurement of Credit Losses on Financial Instruments Simplifying the Test for Goodwill Impairment— Simplifying the Test for Goodwill Impairment 2. BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) Recently Issued Accounting Standards Income Taxes - Simplifying the Accounting for Income Taxes— Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes |
IMPACT OF THE COVID19 PANDEMIC
IMPACT OF THE COVID19 PANDEMIC | 6 Months Ended | 12 Months Ended |
Jun. 30, 2021 | Dec. 31, 2020 | |
IMPACT OF THE COVID19 PANDEMIC | ||
IMPACT OF THE COVID19 PANDEMIC | 3. IMPACT OF THE COVID-19 PANDEMIC On March 11, 2020 the World Health Organization declared COVID-19 a global pandemic causing a massive market disruption to the aviation industry. While U.S. domestic passenger volumes have increased to date, those levels are still down when compared to the same time frame in 2019. The growth in the U.S. domestic air traffic since the trough in April 2020 has been led by leisure and visiting family and relatives (“VFR”) travelers as business travel remains more subdued with corporate workforces continuing to “work-from-home” and in-person meetings continuing to be conducted via videoconferencing and other virtual channels. Equity research analysts and other industry executives believe that the positive trends in leisure and VFR travel will continue as COVID-19 vaccines continue to become more widely distributed in 2021. COVID-19 vaccines have become widely available in the US according to the Centers for Disease Control and Prevention (“the CDC”). The initial beneficiaries of the travel rebound are expected to be leisure and VFR focused Low-Cost Carriers (“LCCs”) and Ultra Low-Cost Carriers (“ULCCs”), while the more international and business travel exposed legacy network airlines are expected to lag behind. As COVID-19 has spread globally, many countries have imposed strict international travel restrictions. The U.S. market has recovered markedly faster than most other countries as a result of widespread vaccine distribution igniting the leisure travel recovery. However, given the uncertainty regarding COVID-19 variants, including but not limited to the Delta variant, the demand recovery may be impacted in both international and domestic travel. Since the beginning of the COVID-19 pandemic, the air cargo market has experienced solid growth both in terms of volumes and yields. While the pandemic has caused a worldwide economic recession, e-commerce has thrived due to a variety of factors such as consumers being unable or unwilling to visit brick-and-mortar stores due to social distancing, which translated into an acceleration of secular growth in e-commerce. Air cargo operators have been in a unique position to meet e-commerce demands that require a high level of speed, reliability and security. Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”) On March 27, 2020, the CARES Act was passed by the U.S. Government. The provisions in the act provide for economic relief to eligible individuals and businesses affected by COVID-19. As a provider of scheduled passenger service, air cargo service, charter air transportation and related services, the Company is eligible for and has received certain benefits outlined in the CARES Act including but not limited to payroll tax breaks, government grants and government loans. 3. IMPACT OF THE COVID-19 PANDEMIC (continued) The grant amount Further, in the second quarter, the Company received a grant of $34,547 under the American Rescue Plan Act of 2021 (“PSP3”) which was enacted on March 11, 2021, and authorizes Treasury to provide additional assistance to passenger air carriers and contractors that received financial assistance under the CARES Act. The grant amount recognized under PSP3 of $34,547 was recorded in Special Items, net during the second quarter. The CARES Act provides an employee retention credit (“CARES Employee Retention Credit”) which is a refundable tax credit against certain employment taxes. During the year ended December 31, 2020, the Company recorded $2,328 related to the CARES Employee Retention Credit within Special Items, net. In the first and second quarters of 2021, an additional $334 and $446, respectively, was recognized within Special Items, net. Under the CARES Act Loan Program, the Company received a $45,000 loan (the “CARES Act Loan”) from the Treasury on October 26, 2020, which was repaid in full on March 24, 2021. In accordance with any grants and/or loans received under the CARES Act, the Company is required to comply with the relevant provisions of the CARES Act and the related implementing agreements which, among other things, include the following: the requirement to use the Payroll Support Payments exclusively for the continuation of payment of crewmember and employee wages, salaries and benefits; the requirement that certain levels of commercial air service be maintained until March 1, 2021, or if ordered by the DOT, March 1, 2022; the prohibitions on share repurchases of listed securities and the payment of common stock (or equivalent) dividends until September 30, 2022; and restrictions on the payment of certain executive compensation until April 1, 2023. | 3. IMPACT OF THE COVID-19 PANDEMIC In December 2019, a novel strain of COVID-19 was reported in Wuhan, China. COVID-19 has since spread to almost every country in the world, including the United States. On March 11, 2020, the World Health Organization declared COVID-19 to constitute a “Public Health Emergency of International Concern” and the U.S. federal government declared COVID-19 a “National Emergency.” All major U.S. passenger airlines were negatively impacted by the declining demand environment resulting from the COVID-19 pandemic. The U.S. Department of State has issued international travel advisories and restrictions and the U.S. federal government has also implemented enhanced screenings and quarantine requirements in connection with the outbreak. In addition, the U.S. Centers for Disease Control has issued travel advisories for domestic travel within the United States. Certain Latin American countries where the Company operates scheduled passenger service have also restricted travel to residents only. Accordingly, the Company experienced a decline in flight bookings and an increase in cancellations beginning in March 2020, as a result of the outbreak. In addition, the federal government has encouraged social distancing efforts and limits on gathering size. Many popular tourist destinations have been closed, or operations are being curtailed, reducing the demand for leisure air travel. Although flight bookings for the second half of 2020 improved compared to the first half of 2020, they remain significantly below the prior year. The timing and pace of the recovery are uncertain as certain markets have reopened, some of which have since experienced a resurgence of COVID-19 cases, while others, particularly international markets, remain closed or are enforcing extended quarantines for most U.S. residents. Additionally, some states have instituted travel restrictions or advisories for travelers from other states. As of December 31, 2020, there were restrictions in several international countries that did not allow planes from the United States to travel to these countries. Federal, state, and local authorities have at various times instituted measures such as imposing self-quarantine requirements, issuing directives forcing businesses to temporarily close, restricting international air travel, and issuing shelter-in-place and similar orders limiting the movement of individuals. Additionally, certain businesses had restricted non-essential travel for their employees. It is evident that passenger air traffic demand in the foreseeable future will continue to fluctuate in response to fluctuations in COVID-19 reported cases, hospitalizations, deaths, treatment efficacy and the availability of vaccines. The Company’s charter air transportation services have also been impacted due to a decline in international military charter service, the suspension or cancellation of major U.S. professional and college sports, and the voluntary or mandated closing of casinos. In addition, the Company has experienced increased competition for domestic charters as competitors are now offering charter services with otherwise grounded aircraft due to a decline in their passenger service. In response to COVID-19 and the reduced consumer demand, the Company has significantly reduced planned capacity for scheduled and charter services. As the COVID-19 pandemic continues to evolve, the Company’s financial and operational outlook remains subject to change. Despite the pandemic’s impact on the Company’s passenger segment, the Company began providing air cargo service and generating cargo revenues under the Amazon Agreement in the second quarter of 2020 as planned. 3. IMPACT OF THE COVID-19 PANDEMIC (continued) Liquidity assessment as a result of COVID-19 impacts At the onset of the pandemic, the Company identified measures to reduce its operating costs and improve its liquidity position and implemented a temporary reduction of scheduled departures, deferred non-essential capital projects, placed a hiring freeze, and negotiated the deferral of aircraft rent payments. Further, on October 8, 2020, the Company announced the elimination of certain management positions. Based on the foregoing measures that the Company has taken to improve its liquidity position, along with the $62,312 grant received from the United States Department of the Treasury under the Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”), and the $45.0 million CARES Act Loan both received in 2020 the Company currently believes that it has sufficient liquidity to meet its near-term obligations. The extent of the impact of COVID-19 on the Company’s financial performance will depend on future developments, including the duration and spread of the outbreak and related travel advisories and restrictions and traveler sentiment. The impact of COVID-19 on overall demand for air travel is highly uncertain and cannot be predicted at the present time. Impairment Consideration The Company identified the impact of the COVID-19 pandemic on the Company’s operation as an indicator of potential impairment of its long-lived assets, and, as a result, performed an impairment test on its long-lived assets during each quarter of 2020. No impairment charges were recorded during 2020. Also during each quarter of 2020, the Company considered whether the projected financial impact of COVID-19 indicated that the fair value of goodwill and tradename asset may be lower than their carrying values. The Company’s considerations included future operating cash flows, changes in the market capitalization of competitors within the airline industry, and changes in the regulatory environment. Based on the assessments performed, the Company concluded that the assets were recoverable, and no impairment charges were recorded during 2020. CARES Act On March 27, 2020, the CARES Act was passed by the U.S. Government. The provisions in the act provide for economic relief to eligible individuals and businesses affected by COVID-19. As a provider of scheduled passenger service, air cargo service, charter air transportation and related services, the Company is eligible for certain benefits outlined in the CARES Act including but not limited to payroll tax breaks, government grants and government loans. On April 15, 2020, the Company was informed by the United States Department of the Treasury that it would receive a grant of $60,559 under the CARES Act Payroll Support Program. The Company received $20,187 in April 2020, and $10,093 in June, July August September 2020 In connection with the Payroll Support Program, the Company is required to comply with the relevant provisions of the CARES Act, including the requirement that the grant is used exclusively for the continued payment of employee salaries, wages, and benefits, and that the Company refrain from involuntary furloughs of employees or reducing pay rates or benefits through September 30, 2020. The Company must also comply with the provisions prohibiting the repurchase of common stock and the payment of common stock dividends until September 30, 2021, as well as those restricting the payment of certain executive compensation until March 24, 2022. Finally, until March 1, 2022, the Company is required to continue to provide air service to markets served prior to March 1, 2020, to the extent determined reasonable and practicable by the DOT subject to exemptions granted by the DOT to the Company. As of December 31, 2020 and through the date of this report, the Company believes it has complied with the provisions of the Payroll Support Program. 3. IMPACT OF THE COVID-19 PANDEMIC (continued) The CARES Act provides an employee retention credit (“CARES Employee Retention Credit”) which is a refundable tax credit against certain employment taxes of up to five thousand dollars per employee. The credit is equal to 50% of qualified wages paid to employees during a quarter, capped at ten thousand dollars of qualified annual wages through December 31, 2020. The Company qualified for the credit beginning on April 1, 2020. During the year ended December 31, 2020, the Company recorded $2,328 related to the CARES Employee Retention Credit within Special Items, net on the Company’s Consolidated Statements of Operations. The CARES Act also provides for the deferred payment of the employer portion of social security taxes through the end of 2020, with 50% of the deferred amount due December 31, 2021 and the remaining 50% due December 31, 2022. The amount deferred as of December 31, 2020 was $4,138, of which $2,069 is recorded in Accrued Salaries, Wages, and Benefits and $2,069 is recorded in Other Long-term Liabilities on the Company’s Consolidated Balance Sheets. Under the CARES Act Loan Program, the Company received a $45,000 loan from the U.S. Department of the Treasury on October 26, 2020. See Note 9—Debt. On January 22, 2021, the Company was informed by the United States Department of the Treasury that it would receive a grant of $32,208 under the Payroll Support Program Extension (PSP2) under the Consolidated Appropriations Act, 2021 (PSP Extension Law). The Company received $16,104 on February 2, 2021, and anticipates receiving the remaining $16,104 prior to the end of March 2021. All funds provided by the Treasury Department to PSP2 participants may only be used for the continuation of payment of employee salaries, wages, and benefits. |
BUSINESS COMBINATION
BUSINESS COMBINATION | 12 Months Ended |
Dec. 31, 2020 | |
BUSINESS COMBINATION | |
BUSINESS COMBINATION | 4. BUSINESS COMBINATION On the Acquisition Date, SCA Acquisition Holdings, LLC acquired 100 percent of MN Airlines’ stockholder equity. The final purchase price, determined in accordance with the definitions and target amounts specified in the sale agreement, was $187,775. The Company did not incur any material expenses related to the Acquisition prior to the Acquisition Date. The Acquisition was accounted for as a business combination using the purchase method of accounting, which requires, among other things, that assets acquired and liabilities assumed be recognized on the balance sheet at their fair value as of the Acquisition Date. The fair value of the assets acquired and liabilities assumed were determined using market, income and cost approaches, as described further below. This resulted in a new basis for the assets acquired and liabilities assumed of MN Airlines, LLC as of the Acquisition Date. The Company established a contra-asset after considering the fair value of Lessor Maintenance Reserve Deposits at the time of the sale and concluded that a market participant would not place any value on this asset, as they would need to incur maintenance expense on a dollar for dollar basis to obtain reimbursement from the lessor. The contra-asset represents the Successor’s obligation to perform planned maintenance events on leased aircraft held as of the Acquisition Date. As reimbursable maintenance events are performed and maintenance expense is incurred, the contra-asset is recognized as a reduction to Maintenance expense. Although the Successor continued with the same core operations after the Acquisition Date, the accompanying consolidated financial statements are presented for two 2018 periods: Successor, which relates to the 2018 period subsequent to the Acquisition Date, and Predecessor, relating to the period from January 1, 2018 through April 10, 2018. These separate periods are presented to reflect the new basis of accounting as of and subsequent to the Acquisition Date, and have been separated by a vertical line on the face of the Consolidated Financial Statements to highlight the fact that the financial information for such periods has been prepared under a different historical-cost basis of accounting. The Successor’s Consolidated Financial Statements also reflect the funding and recapitalization of the Successor, which occurred at the Acquisition Date. Successor— 4. BUSINESS COMBINATION (continued) Predecessor— Fair value of the assets acquired and the liabilities assumed as of the Acquisition Date are as follows: Assets: Restricted Cash $ 8,308 Investments 3,810 Accounts Receivable 31,796 Inventory 5,295 Prepaid Expenses 7,617 Property and Equipment 38,511 Goodwill 222,223 Other Intangible Assets 104,000 Aircraft Lease Deposits 17,923 Deferred Tax Asset 49,634 Other Assets 1,071 Total Assets 490,188 Liabilities: Accounts Payable 50,016 Accrued Salaries, Wages, and Benefits 9,006 Accrued Transportation Taxes 12,237 Air Traffic Liabilities 72,235 Over-market Liabilities 108,017 Finance Lease Obligations 10,038 Loyalty Program Liabilities 37,165 Long-term Debt 941 Other Liabilities 2,758 Total Liabilities 302,413 Total Purchase Price $ 187,775 Property and Equipment— Sun Country Airlines Tradename— 4. BUSINESS COMBINATION (continued) Customer Relationships— Goodwill— Deferred Tax Asset— Over-market Liabilities— As of the Acquisition Date, Sun Country’s existing leases include payments for maintenance reserves in addition to the stated aircraft lease payments. For a substantial portion of these maintenance reserve payments, the Company does not expect to be reimbursed by the lessor. The maintenance reserve payments were evaluated using an income approach, based on the expected differential cash flows between the existing contractual maintenance payments as compared to market terms for similar aircraft under current market assumptions. Significant assumptions used in the discounted cash flow analysis include the discount rate, expected aircraft utilization (impacting the nature and timing of maintenance events) and the estimated market terms for similar aircraft based on terms commensurate with the Company’s credit rating. These maintenance reserve payments were deemed unfavorable as a market participant would expect reimbursement based on more favorable terms, indicating that the balance expected not to be reimbursed is unfavorable to the Company. The Company recognized a liability of $75,238 representing over-market maintenance reserve lease terms compared to market terms of similar leases and will amortize this liability into earnings as a reduction to Aircraft Rent on a straight- line basis over the remaining life of each lease. Loyalty Program Liabilities— |
REVENUE
REVENUE | 6 Months Ended | 12 Months Ended |
Jun. 30, 2021 | Dec. 31, 2020 | |
REVENUE | ||
REVENUE | 4. REVENUE Sun Country is a certificated air carrier generating Operating Revenues from Scheduled service, Charter service, Ancillary, Cargo and Other revenue. Scheduled service revenue mainly consists of base fares. Charter service revenue is primarily generated through service provided to the U.S. Department of Defense, collegiate and professional sports teams and casinos. Ancillary revenues consist of revenue earned from air travel-related services such as baggage fees, seat selection fees and on-board sales. Cargo consists of revenue earned from flying cargo aircraft under the ATSA. Other revenue consists primarily of revenue from services in connection with Sun Country Vacation products. The significant categories comprising Operating Revenues are as follows: Three Months Ended June 30, Six Months Ended June 30, 2021 2020 2021 2020 Scheduled service $ 67,073 $ 17,882 $ 121,693 $ 132,110 Charter service 28,898 8,491 54,703 37,718 Ancillary 29,159 4,968 52,929 39,999 Passenger 125,130 31,341 229,325 209,827 Cargo 22,098 3,219 43,684 3,219 Other 1,961 816 3,793 2,660 Total Operating Revenue $ 149,189 $ 35,376 $ 276,802 $ 215,706 4. REVENUE (continued) The Company attributes and measures its Operating Revenue by geographic region as defined by the Department of Transportation for airline reporting based upon the origin of each passenger and cargo flight segment. The Company’s operations are highly concentrated in the U.S. but include service to many international locations, primarily based on scheduled service to Latin America during the winter season and on military charter services. Total Operating Revenue by geographic region are as follows: Three Months Ended June 30, Six Months Ended June 30, 2021 2020 2021 2020 Domestic $ 142,774 $ 34,307 $ 262,020 $ 197,345 Latin America 6,266 1,038 14,228 18,114 Other 149 31 554 247 Total Operating Revenue $ 149,189 $ 35,376 $ 276,802 $ 215,706 Contract Balances The Company’s contract assets primarily relate to costs incurred to get the 12 Amazon cargo aircraft ready for service. The balances are included in Other Current Assets and Other Assets on the Condensed Consolidated Balance Sheets. The amount expensed during the three and six months ended June 30, 2021 was $169 and $307, respectively, and is included in Maintenance expense. There was nothing expensed in the six months ended June 30, 2020, since the Amazon cargo services were just getting started. The Company’s significant contract liabilities are comprised of 1) ticket sales for transportation that has not yet been provided (reported as Air Traffic Liabilities on the Condensed Consolidated Balance Sheets), 2) outstanding loyalty points that may be redeemed for future travel and other non-air travel awards (reported as Loyalty Program Liabilities on the Condensed Consolidated Balance Sheets) and 3) the Amazon Deferred Up-front Payment received (reported within Other Liabilities on the Condensed Consolidated Balance Sheets). Contract Assets and Liabilities are as follows: June 30, 2021 December 31, 2020 Contract Assets Costs to fulfill contract with Amazon $ 3,203 $ 3,614 Air Traffic Liabilities $ 113,771 $ 101,075 Loyalty Program Liabilities 20,877 22,069 Amazon Deferred Up-front Payment 4,772 5,240 Total Contract Liabilities $ 139,420 $ 128,384 The balance in the Air Traffic Liabilities fluctuates with seasonal travel patterns. Most tickets can be purchased no more than twelve months in advance, therefore any revenue associated with tickets sold for future travel will be recognized within that timeframe. For the six month period ended June 30, 2021, $82,206 of revenue was recognized in Passenger revenue that was included in the Air Traffic Liabilities as of December 31, 2020. 4. REVENUE (continued) As part of the ATSA executed in December 2019, Amazon paid the Company $10,300 toward start-up costs. Upon signing the ATSA, Amazon received 632,183 fully vested warrants to purchase the Company’s common stock, with a fair value of $4,667. This fair value was assigned to a portion of the $10,300 cash received from Amazon and the remaining $5,633 was recorded in Other Liabilities on the Company's Condensed Consolidated Balance Sheet. This deferred up-front payment is being amortized into revenue on a pro-rata basis over the initial six years of the ATSA. For the three and six months ended June 30, 2021, $237 and $468 was amortized into Cargo revenue, respectively. For each of the three and six months ended June 30, 2020, $38 was amortized into Cargo revenue. Loyalty Program The Sun Country Rewards program provides loyalty awards to program members based on accumulated loyalty points. Loyalty points are earned as a result of travel and purchases using the Company’s co- branded credit card. The balance of the Loyalty Program Liabilities fluctuates based on seasonal patterns, which impact the volume of loyalty points awarded through travel or issued to co-branded credit card and other partners (deferral of revenue) and loyalty points redeemed (recognition of revenue). Changes in the Loyalty Program Liabilities are as follows: 2021 2020 Balance—January 1 $ 22,069 $ 22,892 Loyalty Points Earned 1,904 2,621 Loyalty Points Redeemed (1) (3,096) (3,395) Balance—June 30 $ 20,877 $ 22,118 (1) Principally relates to revenue recognized from the redemption of loyalty points for both air and non-air travel awards. Loyalty points are combined in one homogenous pool and are not separately identifiable. As such, the revenue recognized is comprised of points that were part of the Loyalty Program Liabilities balance at the beginning of the period, as well as points that were earned during the period. The timing of loyalty point redemptions can vary significantly, however most new points, that are not left to expire, are redeemed within two years. Given the inherent uncertainty of the current operating environment due to COVID-19, the Company will continue to monitor redemption patterns and will adjust estimates in the future, which could be material. | 5. REVENUE Sun Country is a certified air carrier generating Operating Revenues from Scheduled service, Charter service, Ancillary, Cargo and Other revenue. Scheduled service revenue mainly consists of base fares. Charter service revenue is primarily generated through service provided to the U.S. Department of Defense, collegiate and professional sports teams and casinos. Ancillary revenues consist of revenue earned from air travel-related services such as baggage fees, seat selection fees and on-board sales. Cargo consists of revenue earned from flying cargo aircraft under the Amazon Agreement. Other revenue consists primarily of revenue from services in connection with Sun Country Vacation products. The significant categories comprising Operating Revenues are as follows: Successor Predecessor Year Ended December 31, For the Period April 11, 2018 to For the Period January 1, 2018 to 2020 2019 December 31, 2018 April 10, 2018 Scheduled service $ 193,047 $ 396,113 $ 224,507 $ 132,234 Charter service 98,130 174,562 111,317 40,663 Ancillary (1) 68,055 118,158 — — Passenger 359,232 688,833 335,824 172,897 Cargo 36,809 — — — Ancillary (1) — — 41,065 15,670 Other 5,445 12,551 8,042 8,885 Total Operating Revenue $ 401,486 $ 701,384 $ 384,931 $ 197,452 (1) The Company attributes and measures its Operating Revenue by geographic region as defined by the DOT for airline reporting based upon the origin of each passenger and cargo flight segment. The Company’s operations are highly concentrated in the U.S. but include service to many international locations, primarily based on scheduled service to Latin America during the winter season and on military charter services. Total Operating Revenue by geographic region are as follows: Successor Predecessor Year Ended December 31, For the Period April 11, 2018 to For the Period January 1, 2018 to 2020 2019 December 31, 2018 April 10, 2018 Domestic $ 382,463 $ 666,332 $ 368,456 $ 173,995 Latin America 18,515 33,716 15,628 23,003 Other 508 1,336 847 454 Total Operating Revenue $ 401,486 $ 701,384 $ 384,931 $ 197,452 Contract Balances The Company’s contract assets primarily relate to costs incurred to get the 12 Amazon cargo aircraft ready for service. The balances are included in Other Current Assets and Other Assets on the Consolidated Balance Sheets. The amount expensed during 2020 was $271 and is included in Maintenance expense. The Company’s significant contract liabilities are comprised of 1) ticket sales for transportation that has not yet been provided (reported as Air Traffic Liabilities on the Consolidated Balance Sheets), 2) outstanding loyalty points that may be redeemed for future travel and other non-air travel awards (reported as Loyalty Program Liabilities on the Consolidated Balance Sheets) and 3) Amazon start-up cost payments received (reported within Other Liabilities on the Consolidated Balance Sheets). 5. REVENUE (continued) Contract Assets and Liabilities are as follows: December 31, 2020 2019 Contract Assets Costs to fulfill contract with Amazon $ 3,614 $ — Air Traffic Liabilities $ 101,075 $ 116,660 Loyalty Program Liabilities 22,069 22,892 Amazon Deferred Start-up Costs Payments Received 5,240 1,633 Total Contract Liabilities $ 128,384 $ 141,185 The balance in the Air Traffic Liabilities fluctuates with seasonal travel patterns. Most tickets can be purchased no more than twelve months in advance, therefore any revenue associated with tickets sold for future travel will be recognized within that timeframe. For the year ended December 31, 2020, $110,868 of revenue was recognized in Passenger Revenue that was included in the Air Traffic Liabilities as of December 31, 2019 and $4,502 in cash refunded to customers, mainly due to COVID-19 related flight cancellations. Of the December 31, 2019 Air Traffic Liabilities remaining as of December 31, 2020, $1,045 relates to COVID-19 extensions and $245 relates to gift certificates. As part of the Amazon Agreement executed in December 2019, Amazon paid the Company $10,300 toward start-up costs, of which $6,300 was received as of December 31, 2019 and the remainder was received in February 2020. Upon signing this agreement, Amazon received 632,183 fully vested warrants to purchase the Company’s common stock, with a fair value of $4,667. This fair value was assigned to a portion of the $10,300 cash received from Amazon and the remaining $5,633 is being amortized into Cargo revenue on a pro-rata basis over the initial six years of the Amazon Agreement. For the year ended December 31, 2020, $393 has been amortized into Cargo revenue. Loyalty Program The Sun Country Rewards program provides loyalty awards to program members based on accumulated loyalty points. Loyalty points are earned as a result of travel and purchases using the Company’s co-branded credit card. The balance of the Loyalty Program Liabilities fluctuates based on seasonal patterns, which impact the volume of loyalty points awarded through travel or issued to co-branded credit card and other partners (deferral of revenue) and loyalty points redeemed (recognition of revenue). Changes in the Loyalty Program Liabilities are as follows: 2020 2019 Balance—December 31, 2018 $ 23,950 ASC 606 adoption adjustment (January 1, 2019) 4,867 Balance—January 1 $ 22,892 $ 28,817 Loyalty Points Earned 4,015 6,483 Loyalty Points Redeemed (1) (4,838) (12,408) Balance—December 31 $ 22,069 $ 22,892 (1) Principally relates to revenue recognized from the redemption of loyalty points for both air and non-air travel awards. Loyalty points are combined in one homogenous pool and are not separately identifiable. As such, the redemptions are comprised of points that were part of the Loyalty Program Liabilities balance at the beginning of the period, as well as loyalty points that were earned during the period. The timing of loyalty point redemptions can vary significantly, however most new points, that are not left to expire, are redeemed within two years. Given the inherent uncertainty of the current operating environment due to COVID-19, the Company will continue to monitor redemption patterns and will adjust estimates in the future, which could be material. |
EARNINGS PER SHARE
EARNINGS PER SHARE | 6 Months Ended | 12 Months Ended |
Jun. 30, 2021 | Dec. 31, 2020 | |
EARNINGS PER SHARE | ||
EARNINGS PER SHARE | 5. EARNINGS PER SHARE Basic earnings per share, which excludes dilution, is computed by dividing Net Income available to common stockholders by the weighted average number of shares of common stock outstanding for the period. Diluted earnings per share reflects the potential dilution that could occur if securities or other contracts to issue common stock were exercised or converted into common stock. The number of incremental shares from the assumed issuance of shares relating to share based awards is calculated by applying the treasury stock method. 5. EARNINGS PER SHARE (continued) The following table shows the computation of basic and diluted earnings per share: Three Months Ended June 30, Six Months Ended June 30, 2021 2020 2021 2020 Numerator: Net Income (Loss) $ 51,753 $ (6,040) $ 64,169 $ 1,211 Denominator: Weighted Average Common Shares Outstanding—Basic 57,156,159 46,805,950 52,850,041 46,805,950 Dilutive effect of Stock Options and Warrants (1) 4,826,282 — 4,553,552 1,437,196 Weighted Average Common Shares Outstanding—Diluted 61,982,441 46,805,950 57,403,593 48,243,146 Basic earnings (loss) per share $ 0.91 $ (0.13) $ 1.21 $ 0.03 Diluted earnings (loss) per share $ 0.83 $ (0.13) $ 1.12 $ 0.02 (1) There were 3,547,524 and 3,636,773 performance-based stock options outstanding at June 30, 2021 and 2020, respectively. As a result of the Company’s initial public offering, 75% of these options are expected to meet the performance conditions and are included in dilutive options at June 30, 2021. At June 30, 2020, these options were excluded from the calculation of diluted EPS since the performance conditions were not considered likely to be met. Prior to their exercise on January 31, 2020, all 40,005,885 warrants held by the Apollo Stockholder were included in basic and diluted weighted average shares outstanding as they were equity classified, had an exercise price of approximately $0.0005, and all necessary conditions for issuance were met. Warrants held by Amazon are included in dilutive weighted average shares outstanding as of the date the warrants vest. The unvested warrants held by Amazon have not been included in dilutive shares as their performance condition had not been satisfied. | 6. EARNINGS PER SHARE Basic earnings per share, which excludes dilution, is computed by dividing Net Income available to common stockholders by the weighted average number of common shares outstanding for the period. Diluted earnings per share reflects the potential dilution that could occur if securities or other contracts to issue common stock were exercised or converted into common stock. The number of incremental shares from the assumed issuance of shares relating to share based awards is calculated by applying the treasury stock method. The following table shows the computation of basic and diluted earnings per share: Successor Predecessor Year Ended December 31, For the Period April 11, 2018 to For the Period January 1, 2018 to 2020 2019 December 31, 2018 April 10, 2018 Numerator: Net income / (Loss) $ (3,904) $ 46,072 $ (367) $ 25,910 Denominator: Weighted Average Common Shares Outstanding—Basic 46,806,042 46,773,038 46,700,990 100,000,000 Dilutive effects of Warrants — — — — Dilutive effect of Stock Options and Warrants (1) — 1,136,375 — — Weighted Average Common Shares Outstanding—Diluted 46,806,042 47,909,413 46,700,990 100,000,000 Basic earnings / (loss) per share $ (0.08) $ 0.99 $ (0.01) $ 0.26 Diluted earnings / (loss) per share $ (0.08) $ 0.96 $ (0.01) $ 0.26 (1) There were 3,577,252 , 3,502,925 and 3,583,923 performance-based stock options outstanding as of December 31, 2020, 2019 and 2018, respectively, that were excluded from the calculation of diluted EPS. Additionally, in loss periods, the inclusion of unvested options would have an anti-dilutive effect. Prior to their exercise on January 31, 2020, all 40,005,885 warrants held by Apollo were included in basic and diluted weighted average shares outstanding as they were equity classified, had an exercise price of approximately $0.0005, and all necessary conditions for issuance were met. Warrants held by Amazon are included in diluted weighted average shares outstanding as of the date the warrants vested. The unvested warrants held by Amazon have not been included in diluted shares as their performance condition had not yet been satisfied. |
PROPERTY & EQUIPMENT
PROPERTY & EQUIPMENT | 6 Months Ended | 12 Months Ended |
Jun. 30, 2021 | Dec. 31, 2020 | |
AIRCRAFT | ||
PROPERTY & EQUIPMENT | 6. AIRCRAFT Aircraft Fleet The following tables summarize the Company’s aircraft fleet activity for the six months ended June 30, 2021 and 2020, respectively: December 31, 2020 Additions Removals June 30, 2021 Passenger: Owned 14 6 — 20 Finance leases 5 2 — 7 Operating leases 12 — (6) 6 Sun Country Airlines' Fleet 31 8 (6) 33 Cargo: Aircraft Operated for Amazon 12 — — 12 Total Aircraft Operated 43 8 (6) 45 6. AIRCRAFT (continued) The six aircraft purchased during the six months ended June 30, 2021 were financed through the Delayed Draw Term Loan Facility (see Note 7). All six of these were previously under operating leases. During June 2021, the Company obtained an additional two aircraft under finance leases. December 31, 2019 Additions Removals June 30, 2020 Passenger: Owned 5 9 — 14 Finance leases 10 — (5) 5 Operating leases 14 — (2) 12 Seasonal leases 2 — (2) — Sun Country Airlines' Fleet 31 9 (9) 31 Cargo: Aircraft Operated for Amazon — 7 — 7 Total Aircraft Operated 31 16 (9) 38 The nine aircraft purchased during the six months ended June 30, 2020 were financed through equipment trust certificates (see Note 7). Two of these aircraft were previously under operating leases, five were previously under finance leases, and the other two aircraft were new to the Company’s fleet. In addition, the Company refinanced three previously owned and financed aircraft in January 2020 utilizing equipment trust certificates (see Note 7). As of June 30, 2021, Sun Country operated a fleet of Boeing 737-NG aircraft, consisting of 44 Boeing 737-800s and 1 Boeing 737-700. The Accumulated Depreciation on owned assets was $67,495 and $52,048 as of June 30, 2021 and December 31, 2020, respectively. Depreciation expense on these assets was $9,642 and $6,370 for the three months ended June 30, 2021 and 2020, respectively. Depreciation expense was $18,442 and $11,491 for the six months ended June 30, 2021 and 2020, respectively. The Accumulated Amortization on Finance Lease Assets was $21,209 and $13,018 as of June 30, 2021 and December 31, 2020, respectively. Amortization Expense on these assets was $2,692 and $4,665 for the three months ended June 30, 2021 and 2020, respectively. Amortization Expense was $5,384 and $8,955 for the six months ended June 30, 2021 and 2020, respectively. Depreciation expense on owned assets and amortization expense on Finance Lease Assets are each classified in Depreciation and Amortization on the Condensed Consolidated Statements of Operations. Aircraft Lease Payment Deferrals During the year ended December 31, 2020 the Company negotiated rent payment deferrals with a majority of its aircraft lessors due to COVID-19 cash flow impacts. There were no amounts deferred as of June 30, 2021 since the final payments were made in the second quarter of 2021. The amount deferred as of December 31, 2020 was $7,569, consisting of $2,133 under finance leases and $5,436 under operating leases. These deferrals were classified within the current portion of the respective lease liabilities on the Condensed Consolidated Balance Sheet as of December 31, 2020. 6. AIRCRAFT (continued) Aircraft Maintenance Deposits Contra-Assets At April 11, 2018 (the “Acquisition Date”), the Company established a deposit contra-asset to represent the Company’s obligation to perform planned maintenance events on leased aircraft held as of the Acquisition Date. As of June 30, 2021 and December 31, 2020, the remaining balance of the contra-asset was $22,792 and $36,729, respectively. Of the $13,937 reduction in the contra-asset during the six months ended June 30, 2021, $12,749 related to the purchase of six aircrafts previously leased, whereupon the contra-assets and related maintenance deposits were written-off concurrently to Aircraft lease buy-out expense in Special Items, net (see Note 11). For the three months ended June 30, 2021 and 2020, the Company recognized $850 and none respectively, of the contra-asset as a reduction to Maintenance expense on the accompanying Condensed Consolidated Statements of Operations. For the six months ended June 30, 2021 and 2020, the Company recognized $850 and $328, respectively, of the contra-asset as a reduction to Maintenance expense. Over-market Liabilities At the Acquisition Date, the Company acquired liabilities related to its over-market lease rates and over-market maintenance reserve payments. As of the Acquisition Date, the Company recognized a liability representing lease terms which are unfavorable compared with market terms of similar leases. Upon adopting ASU 2016-02, Leases (Topic 842) effective January 1, 2019, this liability was reclassified as an offset to the Operating Lease Right-of-use Assets. The remaining unamortized balance of this contra-asset as of June 30, 2021 and December 31, 2020 was $11,444 and $16,501, respectively and is recorded within Operating Lease Right-of-Use Assets. During the six months ended June 30, 2021, the Company purchased six aircraft which were previously under leases with unfavorable terms, contributing to $3,765 of the decrease. As of the Acquisition Date, Sun Country’s existing leases included payments for maintenance reserves in addition to the stated aircraft lease payments. For a substantial portion of these maintenance reserve payments, the Company does not expect to be reimbursed by the lessor. Therefore, a liability was established representing over-market maintenance reserve lease terms compared to market terms of similar leases. The remaining balance of this liability at June 30, 2021 and December 31, 2020 was $16,892 and $37,409, respectively. Of the $20,517 reduction in the over-market maintenance reserve liabilities during the six months ended June 30, 2021, $17,435 related to the purchase of six aircrafts previously leased. The over-market liabilities for those aircraft are included in Aircraft lease buy-out expense in Special Items, net (see Note 11). Aircraft Rent expense for the three months ended June 30, 2021 and 2020, includes credits of $1,618 and $3,726, respectively, for the amortization of over-market liabilities established at the Acquisition Date related to lease rates and maintenance reserves. The Aircraft Rent expense credits for the six months ended June 30, 2021 and 2020 were $4,373 and $7,830, respectively. | 7. PROPERTY & EQUIPMENT During the year ended December 31, 2020, the Company purchased nine aircraft and a spare engine. See Note 10 for further information on leased aircraft. 7. PROPERTY & EQUIPMENT (continued) Aircraft Fleet The following tables summarize the Company’s aircraft fleet activity for the years ended December 31, 2020 and 2019, respectively: December 31, 2019 Additions Removals December 31, 2020 Passenger: Owned 5 9 — 14 Finance leases 10 — (5) 5 Operating leases 14 — (2) 12 Seasonal leases 2 — (2) — Sun Country Airlines’ Fleet 31 9 (9) 31 Cargo Aircraft Operated for Amazon — 12 — 12 Total Aircraft Operated 31 21 (9) 43 The nine passenger aircraft purchased during the year ended December 31, 2020 were financed through equipment trust certificates (see Note 9). Two of these aircraft were previously under operating leases, five were previously under finance leases, and the other two aircraft were new to the Company’s fleet. In addition to the nine purchases discussed above, the Company refinanced three previously owned aircraft in January 2020 utilizing equipment trust certificates (see Note 9). The 12 cargo aircraft added during 2020 relate to the Amazon Agreement (see Note 1). December 31, 2018 Additions Removals December 31, 2019 Owned 3 2 — 5 Finance leases 5 5 — 10 Operating leases 19 — (5) 14 Seasonal leases 3 2 (3) 2 Sun Country Airlines’ Fleet 30 9 (8) 31 In December 2019, the Company purchased its first aircraft utilizing equipment trust certificates. The Company purchased one of its aircraft previously under an operating lease agreement in February 2019. In addition, the Company entered into a new finance lease for an aircraft in each of March, April, May and December 2019. Also, in December 2019, the Company amended an operating lease, which converted it to a finance lease. Lastly, one of the Company’s operating leases expired in August 2019 and two in December 2019. The Accumulated Depreciation on owned assets was $52,048 and $21,030 as of December 31, 2020 and 2019, respectively. Depreciation expense was $31,657 and $17,347 for the years ended December 31, 2020 and 2019, respectively, and was $6,731 and $2,315 for the period from April 11, 2018 through December 31, 2018 and the period January 1, 2018 through April 10, 2018, respectively. 7. PROPERTY & EQUIPMENT (continued) The Accumulated Amortization on Finance Lease Assets was $13,018 and $6,698 as of December 31, 2020 and 2019, respectively. Amortization Expense was $11,948 and $13,104 for the years ended December 31, 2020 and 2019, respectively, and was $4,476 and $119 for the period from April 11, 2018 through December 31, 2018 and the period January 1, 2018 through April 10, 2018, respectively. Depreciation expense on Owned Assets and amortization expense on Finance Lease Assets are classified in Depreciation and Amortization on the Consolidated Statements of Operations. |
GOODWILL AND OTHER INTANGIBLE A
GOODWILL AND OTHER INTANGIBLE ASSETS | 12 Months Ended |
Dec. 31, 2020 | |
GOODWILL AND OTHER INTANGIBLE ASSETS | |
GOODWILL AND OTHER INTANGIBLE ASSETS | 8. GOODWILL AND OTHER INTANGIBLE ASSETS Components of Goodwill and Other Intangible Assets were as follows: December 31, 2020 Gross Carrying Amount Accumulated Amortization Net Carrying Value Goodwill $ 222,223 $ — $ 222,223 Intangible Assets with Finite Lives: Customer Relationships 48,000 (10,890) 37,110 Intangible Assets with Indefinite Lives: Tradename 56,000 — 56,000 Total Other Intangible Assets 104,000 (10,890) 93,110 Total Goodwill and Other Intangible Assets $ 326,223 $ (10,890) $ 315,333 December 31, 2019 Gross Carrying Amount Accumulated Amortization Net Carrying Value Goodwill $ 222,223 $ — $ 222,223 Intangible Assets with Finite Lives: Customer Relationships 48,000 (6,890) 41,110 Intangible Assets with Indefinite Lives: Tradename 56,000 — 56,000 Total Other Intangible Assets 104,000 (6,890) 97,110 Total Goodwill and Other Intangible Assets $ 326,223 $ (6,890) $ 319,333 All Goodwill is related to the Passenger Operating segment. Finite-Lived Intangible Assets are amortized over an estimated useful life based on several factors, including the effects of demand, competition, contractual relationship and other business factors. The Company concluded that the Customer Relationships Finite-Lived Intangible Assets has an estimated life of 12 years and is being amortized over this period on a straight-line basis. SCA recognized $4,000 of amortization expense on intangible assets with finite-lives during each of the years ended December 31, 2020 and 2019. For the period April 11, 2018 to December 31, 2018, SCA recognized $2,890 of amortization expense. Amortization is classified in Depreciation and Amortization on the Consolidated Statements of Operations. As of December 31, 2020, estimated annual amortization expense for each of the next five fiscal years |
DEBT
DEBT | 6 Months Ended | 12 Months Ended |
Jun. 30, 2021 | Dec. 31, 2020 | |
DEBT | ||
DEBT | 7. DEBT Lines of Credit— Long-term Debt— Under the CARES Act Loan Program, on October 26, 2020, the Company was awarded a $45,000 loan, which was secured by the Company’s loyalty program and certain cash deposit accounts. 7. DEBT (continued) The Company was in compliance with all covenants in its debt agreements at June 30, 2021. Long-term Debt included the following: June 30, 2021 December 31, 2020 Notes payable under the Company's 2019-1 EETC agreement dated December 2019, with original loan amounts of $248,587 payable in bi-annual installments, in June and December, through December 2027. These notes bear interest at an annual rate of between 4.13% and 6.95% and the weighted average interest rate is 4.78%. $ 211,605 $ 227,347 Delayed Draw Term Loan Facility (see terms and conditions above) 79,494 — U. S. Department of the Treasury CARES Act Loan (see terms and conditions above) — 45,419 Notes payable to Wilmington Trust Company. Notes bear interest at an annual rate of 8.45% and were scheduled to mature Nov. 2023 to Feb. 2024. In April 2021, these notes were repaid. — 12,506 Other Notes payable. These notes bear interest at an annual rate of approximately 5.0% and mature March 2029. 493 529 Total Debt 291,592 285,801 Less: Unamortized debt issuance costs (4,113) (3,338) Less: Current Maturities of Long-term Debt (19,795) (26,118) Total Long-term Debt $ 267,684 $ 256,345 Future maturities of the outstanding Debt are as follows: Debt Principal Amortization of Debt Payments Issuance Costs Net Debt Remainder of 2021 $ 10,661 $ (509) $ 10,152 2022 30,367 (983) 29,384 2023 42,358 (908) 41,450 2024 44,000 (785) 43,215 2025 49,087 (670) 48,417 Thereafter 115,119 (258) 114,861 Total as of June 30, 2021 $ 291,592 $ (4,113) $ 287,479 7. DEBT (continued) The table below presents the Company’s debt measured at fair value: June 30, 2021 December 31, 2020 Carrying Amount $ 291,592 $ 285,801 Fair Value $ 281,640 $ 279,119 The fair value of the Company’s debt was based on the discounted amount of future cash flows using the Company’s end-of-period incremental borrowing rate for similar obligations. The estimates were primarily based on Level 3 inputs. | 9. DEBT Lines of Credit — On February 10, 2021, the Company executed a new five-year credit agreement with a group of lenders that replaces the Company’s May 15, 2020 $25,000 revolving credit agreement. The new agreement provides for a $25,000 Revolving Credit Facility and a $90,000 Delayed Draw Term Loan Facility, which are collectively referred to as the “Credit Facilities.” The interest rate on borrowings is based on the greatest of various alternative base rates, with a minimum of 2%, plus an applicable margin of 4% to 5%. There is a commitment fee on the unused Revolving Credit Facility of 0.5%. The proceeds from the Revolving Credit Facility can be used for general corporate purposes. The proceeds from Delayed Draw Term Loans are to be used solely to finance the acquisition of aircraft or engines to be registered in the U.S. The Credit Facilities have financial covenants that require a minimum EBITDAR (ranging from $62,100 to $87,700) and a minimum liquidity of $30,000 at the close of any business day. Long-term Debt— In December of 2019, the Company purchased one aircraft under the 2019-1 EETC. In the first quarter of 2020, under the 2019-1 EETC, SCA purchased two additional aircraft, purchased one previously under operating lease, and refinanced three aircraft previously owned and financed. The purchase of the remaining six aircraft previously under operating or finance leases occurred in the second quarter of 2020. The total appraised value of the 13 aircraft is approximately $292,450. The Certificates bear interest at the following rates per annum: Class A, 4.13% relating to a tranche of seven of the financed aircraft and 4.25% relating to a tranche of six of the financed aircraft; Class B, 4.66% relating to a tranche of seven of the financed aircraft and 4.78% related to a tranche of six of the financed aircraft; and Class C, 6.95%. The expected maturity date of Class A is December 15, 2027, the Class B is December 15, 2025 and the Class C is December 15, 2023. These trusts meet the definition of a variable interest entity (“VIE”) and must be considered for consolidation in the Company’s Consolidated Financial Statements. This assessment considers both quantitative and qualitative factors including the purpose for which these trusts were established and the nature of the risks. The main purpose of the trust structure is to enhance the credit worthiness of the debt obligation and lower the total borrowing cost. The Company concluded that it is not the primary beneficiary in these trusts because the Company’s involvement is limited to principal and interest payments on the related notes. Therefore, these trusts have not been consolidated in the Company’s Consolidated Financial Statements. 9. DEBT (continued) Under the CARES Act Loan Program, on October 26, 2020, the Company was awarded a forty-five million dollar loan, which is secured by SCA’s loyalty program and certain cash deposit accounts. The loan bears interest at a rate per annum equal to the Adjusted LIBO Rate plus 6.50% and is due to be repaid on the earlier of (i) October 24, 2025 or (ii) six months prior to the expiration date of any material loyalty program securing the loan. During the term of the loan, the Company must maintain aggregate liquidity of not less than ten million dollars, measured at the close of every business day. There are also provisions that may accelerate payments under the loan if certain collateral and debt service coverage ratios are not met. Additionally, because of the timing of the expiration of the Company’s loyalty program agreement, early loan repayments shall be made based on cash flows from the loyalty program, beginning approximately January 2023. The loan program allows for the Payment-In-Kind (“PIK”) of certain interest amounts throughout the debt term The Company elected to PIK $419 of accrued interest in the fourth quarter of 2020 and it was added to the principal balance. Long-term Debt included the following: December 31, 2020 December 31, 2019 Notes payable under the Company’s 2019-1 EETC agreement dated December 2019, with original loan amounts of $248,587 payable in bi-annual installments through December 2027. These notes bear interest at an annual rate of between 4.13% and 6.95% and are secured by the equipment for which the loan was used $ 227,347 $ 28,280 U. S. Department of the Treasury CARES Act Loan (see terms and conditions above) 45,419 — Notes payable to Wilmington Trust Company dated October and November 2018, with original loan amounts totaling $55,671 payable in monthly installments through November 2023. These notes bore interest at an annual rate of 8.45%. They were refinanced in January 2020 through 2019-1 EETC notes — 46,617 Note payable to Wilmington Trust Company dated February 2019, with an original loan amount of $12,750 payable in monthly installments of $151 through January 2024, and then final lump sum payment of $2,825 in February 2024. This note bears interest at an annual rate of 8.45% and is secured by the equipment for which the loan was used 9,813 11,237 Note payable to Wilmington Trust Company dated November 2018, with an original loan amount of $3,671 payable in monthly installments of $44 through October 2023, and then final lump sum payment of $1,101 in November 2023. This note bears interest at an annual rate of 8.45% and is secured by the equipment for which the loan was used 2,693 3,105 Note payable to Alliance Bank dated February 2019, with an original loan amount of $600 payable in monthly installments of $5 through March 2029. This note bears interest at an annual rate of 5.0% 519 569 Notes payable to Riverland Bank dated between April 2015 and May 2016, with original loan amounts totaling $734 payable in monthly installments with expirations between April 2020 and April 2021. The notes bear interest at an annual rate of 5.15% and are secured by the equipment for which the loan was used 10 97 Total Debt 285,801 89,905 Less: Unamortized debt issuance costs (3,338) (2,988) Less: Current Maturities of Long-term Debt (26,118) (13,197) Total Long-term Debt $ 256,345 $ 73,720 9. DEBT (continued) Future maturities of the outstanding Debt are as follows: Year Ending December 31 Debt Principal Payments Amortization of Debt Issuance Costs Net Debt 2021 $ 26,928 $ (810) $ 26,118 2022 28,846 (752) 28,094 2023 43,819 (678) 43,141 2024 67,659 (554) 67,105 2025 64,810 (342) 64,468 Thereafter 53,739 (202) 53,537 Total $ 285,801 $ (3,338) $ 282,463 The table below presents the Company’s debt measured at fair value: December 31, 2020 December 31, 2019 Carrying Amount $ 285,801 $ 89,905 Fair Value $ 279,119 $ 96,342 The fair value of the Company’s debt was based on the discounted amount of future cash flows using the Company’s end-of-year incremental borrowing rate for similar obligations. The estimates were primarily based on Level 3 inputs. |
LEASES
LEASES | 12 Months Ended |
Dec. 31, 2020 | |
LEASES | |
LEASES | 10. LEASES The Company adopted ASC 842 using the modified retrospective transition approach with an effective date of January 1, 2019. The Company elected the package of practical expedients, which allows the Company to carryforward the historical assessment of the following: (1) whether the Company’s contracts are or contain leases, (2) lease classification, and (3) initial direct costs. The Company also elected to combine lease and non-lease components. Leases with an initial term of 12 months or less will be recognized in the Consolidated Statements of Operations on a straight-line basis over the lease term. These leases primarily relate to seasonal aircraft rentals. The Company classifies its Operating Leases into three categories: Aircraft, Real Estate, and Other. Aircraft leases consist of aircrafts and aircraft equipment under operating lease agreements. As of December 31, 2020, the Company had 17 leases for aircraft, of which five were under finance leases and 12 were Right-of-use operating leases. Real Estate leases consist of leased hangar and administration facilities and Other leases consist of non-aircraft equipment under operating lease agreements. Real Estate and Other leases have initial terms of up to ten years. Our fleet of 12 freighters is subleased directly from Amazon and we operate them pursuant to the Air Transportation Services Agreement (“ATSA”). Based upon review of the ATSA, the sublease arrangement does not qualify as a lease under ASC 842, Leases, because we do not control the use of the aircraft. As such, no right-of-use asset and lease liability The Company also has various airport terminal agreements which include provisions for variable lease payments which are based on several factors, including, but not limited to, number of carriers, enplaned passengers, and airports’ annual operating budgets. Due to the variable nature of the rates, these leases are not recorded on the Company’s Consolidated Balance Sheets as a right-of-use asset and lease liability. 10. LEASES (continued) The following table summarizes the lease-related assets and liabilities recorded on the Company’s Consolidated Balance Sheets: Classification December 31, 2020 December 31, 2019 Assets Finance lease assets, net Property and Equipment, net $ 104,815 $ 194,328 Operating lease assets Operating Lease Right-of-use Assets 121,269 147,148 Total lease assets $ 226,084 $ 341,476 Liabilities Current: Finance lease liabilities Short-term Finance Lease Obligations $ 11,460 $ 92,318 Operating lease liabilities Short-term Operating Lease Obligations 34,492 30,611 Long-term: Finance lease liabilities Long-term Finance Lease Obligations 95,710 105,037 Operating lease liabilities Long-term Operating Lease Obligations 112,707 141,879 Total lease liabilities $ 254,369 $ 369,845 The Company uses the rate implicit in the lease to discount lease payments to present value, however, the leases generally do not provide a readily determinable implicit rate. Therefore, the Company estimates the incremental borrowing rate to discount lease payments based on information available initially at adoption and at lease commencement going forward, taking into consideration recent debt issuances as well as publicly available data for instruments with similar characteristics. The Company’s lease agreements do not contain any residual value guarantees. SCA reviewed its operating leases for extension options that may be reasonably certain to be exercised and then would become part of the right-of-use assets and lease liabilities. As of December 31, 2020, the Company did not have any material operating leases with extension or termination options which are reasonably certain to be exercised. During the year ended December 31, 2020 the Company negotiated rent payment deferrals with a majority of its aircraft lessors. The amount deferred as of December 31, 2020 was $7,569, consisting of $2,133 under finance leases and $5,436 under operating leases. These deferrals are classified within the current portion of the respective lease liabilities on the Consolidated Balance Sheet. The following table provides details of the Company’s obligations under finance and operating leases as of December 31, 2020: Finance Operating Leases Leases Aircraft Real Estate Other Total 2021 $ 17,572 $ 38,076 $ 2,218 $ 1,675 $ 41,969 2022 15,460 32,842 1,962 1,561 36,365 2023 15,460 32,592 1,466 659 34,717 2024 25,177 24,476 1,466 — 25,942 2025 12,489 9,630 1,466 — 11,096 Thereafter 52,949 8,222 5,071 — 13,293 Total Minimum Lease Payments 139,107 145,838 13,649 3,895 163,382 Less: Amount Representing Interest (31,937) (18,034) (2,662) (265) (20,961) Present Value of Minimum Lease Payments 107,170 127,804 10,987 3,630 142,421 Plus: Tennant Improvements — — 4,778 — 4,778 Less: Short-term Obligations (11,460) (30,880) (2,105) (1,507) (34,492) Long-term Lease Obligations $ 95,710 $ 96,924 $ 13,660 $ 2,123 $ 112,707 10. LEASES (continued) The following table presents lease costs related to the Company’s Finance and Operating Leases: Successor Predecessor Year Ended December 31, For the Period April 11, 2018 to For the Period January 1, Classification 2020 2019 2018 April 10, 2018 Finance lease cost Amortization of leased assets Depreciation and Amortization $ 11,948 $ 13,104 $ 4,475 $ 119 Interest on lease liabilities Interest Expense 8,659 10,741 4,754 293 Operating lease cost Included in ROU asset—Aircraft Aircraft Rent (1) 30,717 40,043 33,315 16,177 Included in ROU asset—Other Ground Handling, Landing Fees and Airport Rent & Other Operating 4,872 5,415 3,832 1,648 Short-term Aircraft Rent 1,813 5,345 2,622 6,148 Variable—Aircraft Aircraft Rent (1) (1,541) 4,520 894 6,004 Variable—Other Landing Fees & Airport Rentals 1,049 1,345 702 440 Total Lease cost $ 57,517 $ 80,513 $ 50,594 $ 30,829 (1) The years ended December 31, 2020 and 2019, include credits of $14,110 and $20,386 , respectively, for the amortization of Over-market Liabilities established at the Acquisition Date. For the 2018 Successor and Predecessor periods, the credits were $17,275 and none , respectively. The following table presents Supplemental cash flow information related to leases, included in the Consolidated Statements of Cash Flows: For the Year Ended December 31, 2020 2019 Cash paid for amounts included in the measurement of lease liabilities: Operating Cash Flows for Operating Leases $ 34,576 $ 50,081 Operating Cash Flows for Finance Leases $ 8,659 $ 10,741 Financing Cash Flows for Finance Leases $ 89,697 $ 8,258 The table below presents lease-related terms and discount rates related to the Company’s Finance and Operating Leases: December 31, 2020 December 31, 2019 Weighted-average remaining lease term Operating Leases 4.8 years 6.0 years Finance Leases 8.6 years 6.0 years Weighted-average discount rates Operating Leases 6.0 % 5.8 % Finance Leases 6.1 % 6.0 % 10. LEASES (continued) During the years ended December 31, 2020 and 2019, the Company expensed $8,691 and $18,584 of maintenance reserve payments, respectively. The Company expensed $12,781 and $6,003 of maintenance reserve payments during the period April 11, 2018 to December 31, 2018 and from January 1, 2018 to April 10, 2018, respectively. These expenses are reflected in Aircraft Rent on the accompanying Consolidated Statements of Operations. At the Acquisition Date, the Company established a contra-asset to represent the Company’s obligation to perform planned maintenance events on leased aircraft held as of the Acquisition Date. As of December 31, 2020 and 2019, the remaining balance of the contra-asset was $36,729 and $43,844, respectively. Of the $7,115 reduction in the contra-asset during 2020, $5,624 related to the purchase of two aircrafts previously leased. For the years ended December 31, 2020 and 2019, the Company recognized $1,402 and $12,263, respectively, of the contra-asset as a reduction to Maintenance expense on the accompanying Consolidated Statements of Operations. For the period of April 11, 2018 to December 31, 2018, the Company recognized $6,516 as a reduction to Maintenance expense. |
STOCK BASED COMPENSATION
STOCK BASED COMPENSATION | 12 Months Ended |
Dec. 31, 2020 | |
STOCK-BASED COMPENSATION | |
STOCK-BASED COMPENSATION | 11. STOCK-BASED COMPENSATION In October of 2018, the Company adopted an equity incentive plan (the “Plan”) pursuant to which the Company may grant stock options, restricted stock, and restricted stock units to employees, consultants, and non-employee directors. Shares related to awards granted under the Plan that expire, are forfeited, or for any other reason are not issued or delivered will be available for subsequent awards under the Plan. The Plan authorizes issuance of up to 6,985,533 shares. As of December 31, 2020, there were 988,383 shares available for future grants. On November 7, 2018, the Company granted 5,827,511 stock options to certain employees, with 38.5% of the options vesting upon the passage of time, and 61.5% of the options vesting based on performance conditions. Additional stock options were awarded in 2019 and 2020 with the same time-vesting and performance ratios (see tables below). The 2018 time-based options vest proportionally (25% per year) on each of the first four anniversaries of the Acquisition Date. The 2019 and 2020 time-based options vest proportionally (25% per year) on each of the first four anniversaries of the grant date. The performance-based options vest when there is a Change in Control. All unexercised options awarded under the Plan expire on the tenth anniversary of the grant date. The stock option exercise prices range from $5.30 to $18.02 per share. Compensation expense related to time-based stock options is recognized in an amount equal to the fair value on the date of the grant and is recognized on a straight-line basis over the employee’s requisite service period, generally the vesting period of the award. Compensation expense related to performance-based stock options is recognized only if the performance condition becomes probable of occurring. 11. STOCK-BASED COMPENSATION (continued) A summary of stock option activity: Time-Based Stock Options Number of shares Weighted average exercise price per share Weighted average grant date fair value Weighted average remaining contractual term (years) Outstanding as of December 31, 2018 2,243,588 $ 5.29 $ 2.39 9.8 Granted 472,253 $ 7.93 $ 3.14 Forfeited (434,533) $ 5.29 $ 2.39 Outstanding as of December 31, 2019 2,281,308 $ 5.84 $ 2.54 9.0 Granted 221,941 $ 17.99 $ 7.02 Forfeited (173,788) $ 14.65 $ 5.70 Outstanding as of December 31, 2020 2,329,461 $ 6.36 $ 2.74 7.6 Exercisable as of December 31, 2020 1,054,059 $ 5.64 $ 2.50 Vested or expected to vest, December 31, 2020 2,329,461 $ 6.36 $ 2.74 11. STOCK-BASED COMPENSATION (continued) Performance-Based Stock Options Number of Weighted Weighted Weighted Outstanding as of December 31, 2018 3,583,923 $ 5.29 $ 1.50 9.8 Granted 746,836 $ 7.96 $ 2.01 Forfeited (827,812) $ 5.29 $ 1.50 Outstanding as of December 31, 2019 3,502,947 $ 5.86 $ 1.61 9.0 Granted 346,984 $ 17.99 $ 4.36 Forfeited (272,679) $ 14.65 $ 3.59 Outstanding as of December 31, 2020 3,577,252 $ 6.38 $ 1.72 7.6 Exercisable as of December 31, 2020 — $ — $ — Vested or expected to vest, December 31, 2020 — $ — $ — Stock compensation expense was $2,110 and $1,888 during the years ended December 31, 2020 and 2019, respectively, and was $373 during the period April 11, 2018 through December 31, 2018. Expense recorded in 2020 includes 30,820 shares of SCA’s common stock which was awarded to employees as part of their annual bonus compensation. As of December 31, 2020, there was $2,760 of total unrecognized compensation expense related to time-based stock options, which is expected to be fully recognized over a weighted average period of approximately 1.5 years. A third-party valuation advisor was utilized to assist management in determining the fair value of options granted using the Black-Scholes option-pricing model based on the grant price and assumptions regarding the expected term, expected volatility, dividends, and risk-free interest rates. The grant price was determined based on the fair value of the Company’s stock on the grant date. The fair value of the time-based stock options granted was estimated using the Black-Scholes option-pricing model with the following weighted-average assumptions used for grants: 2020 2019 Expected Term 5.59 years 5.67 years Expected Volatility 38.8 % 33.9 % Risk-free Interest Rate 1.7 % 1.7 % Expected Dividend Yield — — The expected term was based on vesting criteria and time to expiration. The expected volatility was based on historical volatility of stock prices and assets of a public company peer group. The risk-free interest rate was based on the implied risk-free rate using the expected term and yields of U.S Treasury stock and S&P bond yields. The fair value of performance-based stock options granted was estimated by simulating the future stock price using geometric brownian motion and risk-free rate of return at intervals specified in the grant agreement. The number of shares vested and future price at each interval were recorded for each simulation and then multiplied together and discounted to present value at the risk-free rate of return. |
FUEL DERIVATIVES AND RISK MANAG
FUEL DERIVATIVES AND RISK MANAGEMENT | 6 Months Ended | 12 Months Ended |
Jun. 30, 2021 | Dec. 31, 2020 | |
FUEL DERIVATIVES AND RISK MANAGEMENT | ||
FUEL DERIVATIVES AND RISK MANAGEMENT | 8. FUEL DERIVATIVES AND RISK MANAGEMENT The Company’s operations are inherently dependent upon the price of aircraft fuel. To manage economic risks associated with fluctuations in aircraft fuel prices, the Company periodically enters into fuel option and swap contracts. The Company does not apply hedge accounting to its fuel derivative contracts, nor does it hold or issue them for trading purposes. Fuel derivative contracts are recognized at fair value on the Condensed Consolidated Balance Sheets as Derivative Assets, if the fair value is in an asset position, or as Derivative Liabilities, if the fair value is in a liability position. The Company did not have any collateral held by counterparties to these agreements as of June 30, 2021 and December 31, 2020. Derivatives where the payment due date is greater than one year from the balance sheet date are classified as long-term. Changes in Derivative Assets (Liabilities) were as follows: Six Months Ended June 30, 2021 2020 Balance - January 1 $ (1,174) $ 2,233 Non-cash Gains (Losses) 3,599 (16,056) Contract Settlements (827) 4,990 Balance - June 30 $ 1,598 $ (8,833) Fuel Derivative Gains (Losses) consisted of the following: Three Months Ended June 30, Six Months Ended June 30, 2021 2020 2021 2020 Non-cash Gains (Losses) $ 1,213 $ 5,695 $ 3,599 $ (16,056) Cash Premiums Paid — (1,617) — (1,901) Total Fuel Derivative Gains (Losses) $ 1,213 $ 4,078 $ 3,599 $ (17,957) Fuel derivative gains and losses are classified in Aircraft Fuel on the Condensed Consolidated Statements of Operations. As of June 30, 2021, the Company had outstanding fuel derivative contracts covering 5.8 million gallons of crude oil and jet fuel that will settle between July 2021 and September 2021. | 12. FUEL DERIVATIVES AND RISK MANAGEMENT The Company’s operations are inherently dependent upon the price of aircraft fuel. To manage economic risks associated with fluctuations in aircraft fuel prices, the Company periodically enters into fuel option and swap contracts. The Company does not apply hedge accounting to its fuel derivative contracts, nor does it hold or issue them for trading purposes. Fuel derivative contracts are recognized at fair value on the Consolidated Balance Sheets as Derivative Assets, if the fair value is in an asset position, or as Derivative Liabilities, if the fair value is in a liability position. The Company did not have any collateral held by counterparties to these agreements as of December 31, 2020 and 2019. Derivatives where the payment due date is greater than one year from the balance sheet date are classified as long-term. Changes in Derivative Assets (Liabilities) were as follows: Year Ended December 31, 2020 2019 Balance—January 1 $ 2,233 $ (12,006) Non-cash gains (losses) (12,206) 10,791 Contract settlements 8,800 3,448 Balance—December 31 $ (1,173) $ 2,233 Fuel Derivative Gains (Losses) consisted of the following: Year Ended December 31, For the Period 2020 2019 December 31, 2018 Non-cash gains (losses) $ (12,206) $ 10,791 $ (12,006) Cash Premiums Paid (2,053) (665) (2,280) Total Fuel Derivative gains (losses) $ (14,259) $ 10,126 $ (14,286) There were fuel derivative gains in the second, third and fourth quarters of 2020, primarily due to the partial recovery of oil prices following the decline during the first quarter of 2020. There were no fuel derivatives outstanding during the period January 1, 2018 through April 10, 2018. Fuel derivative gains and losses are recognized in Aircraft Fuel expense on the Consolidated Statements of Operations. As of December 31, 2020, the Company had outstanding fuel derivative contracts covering 21.0 million gallons of crude oil and jet fuel that will settle between January 2021 and September 2021. Fuel Consortia The Company currently participates in fuel consortia at multiple airports. These agreements generally include cost-sharing provisions and environmental indemnities that are generally joint and several among the participating airlines. To the extent the consortium are legal entities, they meet the definition of a VIE and must be considered for consolidation in the Company’s Consolidated Financial Statements. The company concluded that it is not the primary beneficiary of any fuel consortia as SCA’s participation generally represents a small percentage of the overall fuel consortia interests and SCA does not have the ability to direct the activities of the consortia. |
FAIR VALUE MEASUREMENTS
FAIR VALUE MEASUREMENTS | 6 Months Ended | 12 Months Ended |
Jun. 30, 2021 | Dec. 31, 2020 | |
FAIR VALUE MEASUREMENTS | ||
FAIR VALUE MEASUREMENTS | 9. FAIR VALUE MEASUREMENTS Accounting standards define fair value as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. The standards also establish a fair value hierarchy, which requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. Under GAAP, there are three levels of inputs that may be used to measure fair value: Level 1 Level 2 Level 3 The Company uses the following valuation methodologies for financial instruments measured at fair value on a recurring basis. Derivative Instruments The following table summarizes the assets and liabilities measured at fair value on a recurring basis: June 30, 2021 Level 1 Level 2 Level 3 Total Assets Fuel Derivative Contracts $ — $ 1,598 $ — $ 1,598 Total Assets measured at fair value on a recurring basis $ — $ 1,598 $ — $ 1,598 December 31, 2020 Level 1 Level 2 Level 3 Total Liabilities Fuel Derivative Contracts $ — $ 1,174 $ — $ 1,174 Total Liabilities measured at fair value on a recurring basis $ — $ 1,174 $ — $ 1,174 Certain assets are measured at fair value on a nonrecurring basis. The Company’s non-financial assets, which primarily consist of property and equipment, goodwill and other intangible assets are not required to be measured at fair value on a recurring basis and are reported at carrying value. However, on a periodic basis whenever events or changes in circumstances indicate that their carrying value may not be recoverable, non-financial assets are assessed for impairment and, if applicable, written down to fair value using significant unobservable inputs, classified as Level 3. The Company’s debt portfolio consists of 2019-1 EETC certificates, borrowings under the Delayed Draw Term Loan Facility, and fixed-rate notes payable. See Note 7 for debt fair values. | 13. FAIR VALUE MEASUREMENTS Accounting standards define fair value as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. The standards also establish a fair value hierarchy, which requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. Under GAAP, there are three levels of inputs that may be used to measure fair value: Level 1—Quoted prices for identical assets or liabilities in active markets. Level 2—Observable inputs other than Level 1 prices, such as quoted prices for similar assets or liabilities in active markets; quoted prices for identical or similar assets or liabilities in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities. Level 3—Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. The Company uses the following valuation methodologies for financial instruments measured at fair value on a recurring basis. Derivative Instruments— The following table summarizes the assets and liabilities measured at fair value on a recurring basis: December 31, 2020 Level 1 Level 2 Level 3 Total Liabilities Fuel Derivative Contracts $ — $ 1,173 $ — $ 1,173 Total Liabilities measured at fair value on a recurring basis $ — $ 1,173 $ — $ 1,173 December 31, 2019 Level 1 Level 2 Level 3 Total Assets Fuel Derivative Contracts $ — $ 2,233 $ — $ 2,233 Total Assets measured at fair value on a recurring basis $ — $ 2,233 $ — $ 2,233 Certain assets are measured at fair value on a nonrecurring basis. The Company’s non-financial assets, which primarily consist of property and equipment, goodwill and other intangible assets are not required to be measured at fair value on a recurring basis and are reported at carrying value. However, on a periodic basis whenever events or changes in circumstances indicate that their carrying may not be recoverable, non-financial assets are assessed for impairment and, if applicable, written down to fair value using significant unobservable inputs, classified as Level 3. The Company’s debt portfolio consists of EETC certificates and notes payable. See Note 9 for debt fair values. |
INCOME TAXES
INCOME TAXES | 6 Months Ended | 12 Months Ended |
Jun. 30, 2021 | Dec. 31, 2020 | |
INCOME TAXES | ||
INCOME TAXES | 10. INCOME TAXES The Company’s effective tax rate for the three and six months ended June 30, 2021 was 15.5% and 18.8%, respectively. The effective tax rate for the three and six months ended June 30, 2020 was 23.9% and 31.1%, respectively. The effective tax rate represents a blend of federal and state taxes and includes the impact of certain nondeductible or nontaxable items. The decrease in the three and six month rate is primarily due to a favorable permanent difference related to the Tax Receivable Agreement partially offset by nondeductible expense related to executive compensation disallowed under Internal Revenue Code Section 162(m). Tax Receivable Agreement In connection with the Company’s IPO, we entered into an income Tax Receivable Agreement (the “Tax Receivable Agreement” or “TRA”) with our pre-IPO stockholders (the “TRA holders”). The Tax Receivable Agreement provides for the payment by the Company to the TRA holders of 85% of the amount of cash savings, if any, in U.S. federal, state, local, and foreign income tax that the Company actually realizes (or are deemed to realize in certain circumstances) as a result of certain tax attributes that existed at the time of the IPO (the “Pre-IPO Tax Attributes”). The Company will retain the benefit of the remaining 15% of these cash savings. Payments under the Tax Receivable Agreement will not begin until at least 12 months after the closing of the Company’s IPO. In the event that the Company is prohibited from making payments under the Tax Receivable Agreement for tax benefits utilized during any periods pursuant to the CARES Act or other governmental programs, the Company is not required to make payments under the Tax Receivable Agreement for Pre-IPO Tax Attributes utilized in such periods. Based on our current participation in the CARES Act Program, the Company does not expect to make payments under the Tax Receivable Agreement until 2023. If we do not generate sufficient taxable income in the aggregate over the term of the Tax Receivable Agreement to utilize the tax benefits, then we would not be required to make the related TRA payments. Upon the closing of the IPO, the Company recognized a non-current liability of $115,200 which represented undiscounted aggregate payments that we expected to pay the TRA holders under the Tax Receivable Agreement, with an offset to Stockholders' Equity. Subsequent changes in the measurement of the liability are being adjusted through the Consolidated Statements of Operations. The Tax Receivable Agreement liability is an estimate and actual amounts payable under the Tax Receivable Agreement could differ from this estimate based on, among other things, (i) generation of future taxable income over the term of the Tax Receivable Agreement, (ii) the Company’s participation in future government programs, (iii) stock option activity during periods prior to the commencement of payments under the Tax Receivable Agreement and (iv) future changes in tax laws. These factors could result in an increase or decrease in the related liability which would be recognized in the Company’s earnings in the period of such change. In the second quarter of 2021, the Company reduced the TRA liability balance by $18,700, from $115,200 to $96,500. The offsetting credit was recorded in Other Non-operating Income. The decrease in the TRA liability was mainly due to the receipt of the PSP3 grant of $34,547, which extended the time period in which distributions made to shareholders are restricted from March 31, 2022 to September 30, 2022, and also resulted in an increase in forecasted 2021 pre-tax income. The remaining TRA liability balance of $96,500 is presented in “Long-term Liabilities” on the Condensed Consolidated Balance Sheet as of June 30, 2021. | 14. INCOME TAXES The Company’s effective tax rate for the years ended December 31, 2020 and 2019 were 16.6% and 23.5%, respectively, and for the period from April 11, 2018 to December 31, 2018 it was (77.9)%. The effective tax rate represents a blend of federal and state taxes and includes the impact of certain nondeductible items. The following table summarizes the significant components of the provision for income taxes from continuing operations: Successor Year Ended December 31, For the period 2020 2019 December 31, 2018 Current: Federal $ — $ — $ — State and Local 10 66 — Total Current Tax Expense 10 66 — Deferred: Federal (597) 12,509 129 State and Local (191) 1,513 32 Total Deferred Tax Expense / (Benefit) (788) 14,022 161 Total Income Tax Expense / (Benefit) $ (778) $ 14,088 $ 161 The income tax provision differs from that computed at the federal statutory corporate tax rate as follows: Successor Year Ended December 31, For the period 2020 2019 December 31, 2018 Expected Provision at Federal Statutory Tax Rate 21.0 % 21.0 % 21.0 % State Tax, net of Federal Impact 3.1 % 2.1 % (12.0) % Employee Parking (3.3) % 0.2 % (40.4) % Meals and Entertainment (2.2) % 0.2 % (42.9) % Other Permanent Adjustments (2.0) % 0.0 % (3.6) % Effective Tax Rate 16.6 % 23.5 % (77.9) % 14. INCOME TAXES (continued) The following table summarizes the significant components of the Company’s deferred taxes: December 31, 2020 2019 Deferred Tax Assets: Net Operating Loss $ 75,389 $ 24,680 Operating Lease Obligations 32,942 38,629 Finance Lease Obligations 20,095 45,392 Goodwill and Other Intangible Assets 12,586 15,325 Loyalty Program Liabilities 4,911 5,064 Accrued Maintenance 4,434 7,481 Other 4,318 2,769 Total Deferred Tax Assets 154,675 139,340 Deferred Tax Liabilities: Accelerated Depreciation (67,105) (24,858) Operating Lease Right-of-use Assets (27,892) (33,844) Finance Lease Assets (23,462) (44,696) Unrealized Gain on Fuel Derivatives — (514) Total Deferred Tax Liabilities (118,459) (103,912) Total Net Deferred Tax Assets $ 36,216 $ 35,428 As of December 31, 2020, the Company has $73,116 of federal net operating loss and $2,273 of state net operating loss, net of tax effect, available that may be applied against future tax liabilities. There is no expiration of federal net operating losses. The state net operating losses begin to expire in 2025. In assessing the realizability of Deferred Tax Assets, management considers whether it is more likely than not that some portion or all the Deferred Tax Assets will not be realized. The ultimate realization of the Deferred Tax Assets is dependent upon the generation of future taxable income during periods in which the temporary differences become deductible. Management considers the scheduled reversal of the liabilities (including the impact of available carryback and carryforward periods), projected future taxable income, and tax-planning strategies in making this assessment. As of December 31, 2020, management believes that it is more likely than not that the future results of the operations will generate sufficient taxable income to realize the tax benefits related to its Deferred Tax Assets. The Company recognizes the consolidated financial statement effect of a tax position when it is more likely than not, based on the technical merits, that the position will be sustained upon examination. If applicable, the Company reports both accrued interest and penalties related to unrecognized tax benefits as a component of Income Tax Expense in the Consolidated Statements of Operations. As of December 31, 2020 and 2019, the Company had no liability for unrecognized tax benefits recorded in its Consolidated Balance Sheets. The Company files income tax returns in the United States and various states. In the normal course of business, the Company is subject to potential income tax examination by the federal and state tax authorities in these jurisdictions for tax years that are open under local statute. For U.S. federal and state income tax purposes, the Company’s 2018 and 2019 tax returns remain open to examination. |
DEFINED CONTRIBUTION 401K
DEFINED CONTRIBUTION 401K | 12 Months Ended |
Dec. 31, 2020 | |
DEFINED CONTRIBUTION 401K | |
DEFINED CONTRIBUTION 401K | 15. DEFINED CONTRIBUTION 401(K) PLAN The Company has a 401(k) profit-sharing retirement plan covering substantially all employees. The plan allows employee contributions up to 50% of a participant’s eligible compensation, subject to limits established under the 401(k) plan and annual IRS elective deferral limits. SCA currently matches 100% of participants contribution up to a maximum of 4% for non-pilot participants’ and 6% for pilot participants’ eligible compensation. SCA is also required to make a non-discretionary 2% Company contribution for pilots based on gross earnings. The Company made 401(k) contributions as follows: Successor Predecessor Year Ended December 31, For the Period For the Period 2020 2019 December 31, 2018 April 10, 2018 Non-Discretionary $ 1,040 $ 908 $ 592 $ 308 Discretionary 4,263 4,246 2,436 1,026 Total 401(k) Contributions $ 5,303 $ 5,154 $ 3,028 $ 1,334 Contributions are classified in Salaries, Wages, and Benefits on the Consolidated Statements of Operations. |
SPECIAL ITEMS, NET
SPECIAL ITEMS, NET | 6 Months Ended | 12 Months Ended |
Jun. 30, 2021 | Dec. 31, 2020 | |
SPECIAL ITEMS, NET | ||
SPECIAL ITEMS, NET | 11. SPECIAL ITEMS, NET Special Items, net on the Condensed Consolidated Statements of Operations consisted of the following: Three Months Ended June 30, Six Months Ended June 30, 2021 2020 2021 2020 CARES Act grant recognition (1) $ (39,378) $ (31,516) $ (71,587) $ (31,516) CARES Act employee retention credit (2) (446) — (780) — Aircraft lease buy-out expense (3) 1,299 — 6,963 — Other 5 35 12 35 Total Special Items, net $ (38,520) $ (31,481) $ (65,392) $ (31,481) (1) In the quarter ended March 31, 2021, the Treasury awarded the Company a grant of $32,208 under PSP2. On April 22, 2021, the Company received an additional $4,831 from the Treasury as a top-off grant under PSP2. Further, during the quarter ended June 30, 2021, the Company received a grant of $34,547 under PSP3. (2) The CARES Act Employee Retention credit relates to a refundable tax credit against certain employment taxes. (3) Five aircraft were purchased in March 2021 that were previously under operating leases. One additional aircraft was purchased in April 2021 that was previously under an operating lease. Aircraft lease buy-out expense represents the net costs incurred to terminate the leases on those six aircraft. This includes the associated lease termination costs, write-off of previously capitalized maintenance deposits, and the write-off of over-market liabilities (see Note 6). | 16. SPECIAL ITEMS, NET Special Items, net on the Consolidated Statements of Operations consisted of the following: Successor Predecessor Year Ended December 31, For the Period For the Period 2020 2019 December 31, 2018 April 10, 2018 CARES Act grant recognition (1) $ (62,312) $ — $ — $ — CARES Act employee retention credit (2) (2,328) — — — Contractual obligations for retired technology (3) — 7,578 — — Sale of airport slot rights (4) — (1,200) — — Sun Country Rewards program modifications (5) — — (8,463) — Early-out payments and other outsourcing expenses (6) — — 1,757 271 Other (7) 77 714 — — Total Special Items, net $ (64,563) $ 7,092 $ (6,706) $ 271 (1) Relates to the credit recognized under the CARES Act Payroll Support Program through December 31, 2020. Under the Payroll Support Program, the United States Department of the Treasury provided the Company with a Payroll Support grant, which was to be used exclusively for the continuation of payments for salaries, wages, and benefits. (see Note 3 for more information). (2) Relates to the credit recognized under the CARES Act Employee Retention credit which is a refundable tax credit against certain employment taxes (see Note 3 for more information). (3) This was a charge related to contractual obligations for retired technology. In connection with implementing SCA’s new reservations systems, the Company incurred obligations under the contracts for existing systems that were being phased out ahead of their scheduled contract terms. 16. SPECIAL ITEMS, NET (continued) (4) Represents proceeds from the sale of unused airport slot rights. SCA does not hold any other remaining airport slot rights; therefore this gain does not reflect the Company’s continuing operations. (5) This reduction to expense is associated with changes to the terms of the Sun Country Rewards program. As of November 3, 2018, the Company modified policies within the program which accelerated loyalty point expiration, while making points more valuable for its members. (6) Related to early-out payments and other expenses incurred in connection with outsourcing certain operations personnel and other employee initiatives. These efforts were primarily related to airport station, flight attendants and ground handling employees. (7) Consists of employee relocation costs due to closing flight attendant bases and costs to exit the Company’s prior headquarters building. |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 6 Months Ended | 12 Months Ended |
Jun. 30, 2021 | Dec. 31, 2020 | |
COMMITMENTS AND CONTINGENCIES | ||
COMMITMENTS AND CONTINGENCIES | 12. COMMITMENTS AND CONTINGENCIES The Company has contractual obligations and commitments primarily with regard to lease arrangements, repayment of debt (see Note 7) and future purchases of aircraft. The Company is subject to various legal proceedings in the normal course of business and expenses legal costs as incurred. Management believes these proceedings will not have a materially adverse effect on the Company. | 17. COMMITMENTS AND CONTINGENCIES The Company has contractual obligations and commitments primarily with regard to lease arrangements (see Note 10) and repayment of debt (see Note 9). The Company is subject to various legal proceedings in the normal course of business and records legal costs as incurred. Management believes these proceedings will not have a materially adverse effect on the Company. |
OPERATING SEGMENTS
OPERATING SEGMENTS | 6 Months Ended | 12 Months Ended |
Jun. 30, 2021 | Dec. 31, 2020 | |
OPERATING SEGMENTS | ||
OPERATING SEGMENTS | 13. OPERATING SEGMENTS Operating segments are defined as components of an enterprise about which separate financial information is available that is evaluated regularly by the Chief Operating Decision Maker and is used in resource allocation and performance assessments. The Company’s Chief Operating Decision Maker is considered to be the Company’s Chief Executive Officer. The Company’s Chief Operating Decision Maker makes resource allocation decisions to maximize the Company’s consolidated financial results. Substantially all the Company’s tangible assets are located in the U.S. or relate to flight equipment, which is mobile across geographic markets. The Company has two operating segments: Passenger and Cargo. The Company’s Passenger segment has two internal passenger groups (Scheduled and Charter), but since they share resources and expenses are combined, they are considered one Passenger operating segment. The Company’s Passenger operations are highly concentrated in the U.S. but include service to many international locations, primarily based on scheduled service to Latin America during the winter season and on military charter services. All goodwill is related to the Passenger Operating Segment. 13. OPERATING SEGMENTS (continued) The Cargo segment began providing air cargo services under the ATSA in May 2020. Fuel consumed in Cargo operations is directly reimbursed by Amazon and therefore aircraft fuel revenue is presented net of such reimbursements on the Condensed Consolidated Statements of Operations. Fuel consumed in Cargo maintenance activities is included in the Cargo segment. Certain operating expenses are directly attributable to this operating segment. Certain operating expenses are allocated between the operating segments. Non-Fuel operating expenses are allocated based on metrics such as block hours, fleet count and departures, which best align with the nature of the respective expense. CARES Act credits, included in Special Items, net, are allocated based on the respective segment salaries, wages, and benefits. The following tables present financial information for the Company’s two operating segments: Passenger and Cargo. Assets by segment are not reviewed by the Chief Operating Decision Maker and have not been presented herein. Three Months Ended June 30, 2021 Three Months Ended June 30, 2020 Passenger Cargo Consolidated Passenger Cargo (1) Consolidated Operating Revenues $ 127,091 $ 22,098 $ 149,189 $ 32,157 $ 3,219 $ 35,376 Non-Fuel Operating Expenses 92,361 16,401 108,762 63,507 4,907 68,414 Aircraft Fuel 29,657 52 29,709 677 — 677 Special Items, net (28,784) (9,736) (38,520) (28,111) (3,370) (31,481) Total Operating Expenses 93,234 6,717 99,951 36,073 1,537 37,610 Operating Income (Loss) $ 33,857 $ 15,381 49,238 $ (3,916) $ 1,682 (2,234) Interest Income 9 63 Interest Expense (6,080) (5,442) Other, net 18,054 (325) Income (Loss) before Income Tax $ 61,221 $ (7,938) Six Months Ended June 30, 2021 Six Months Ended June 30, 2020 Passenger Cargo Consolidated Passenger Cargo (1) Consolidated Operating Revenues $ 233,118 $ 43,684 $ 276,802 $ 212,487 $ 3,219 $ 215,706 Non-Fuel Operating Expenses 179,566 34,472 214,038 173,046 4,907 177,953 Aircraft Fuel 53,912 72 53,984 56,238 — 56,238 Special Items, net (46,991) (18,401) (65,392) (28,111) (3,370) (31,481) Total Operating Expenses 186,487 16,143 202,630 201,173 1,537 202,710 Operating Income $ 46,631 $ 27,541 74,172 $ 11,314 $ 1,682 12,996 Interest Income 24 314 Interest Expense (13,201) (11,058) Other, net 18,049 (494) Income before Income Tax $ 79,044 $ 1,758 (1) As air cargo operations commenced in May 2020, there are limited Cargo amounts included in the three and six month periods ended June 30, 2020. | 18. OPERATING SEGMENTS Operating segments are defined as components of an enterprise about which separate financial information is available that is evaluated regularly by the chief operating decision maker and is used in resource allocation and performance assessments. The Company’s chief operating decision maker is considered to be the Company’s Chief Executive Officer. The Company’s chief operating decision maker makes resource allocation decisions to maximize the Company’s consolidated financial results. Substantially all the Company’s tangible assets are located in the U.S. or relate to flight equipment, which is mobile across geographic markets. For the years ended December 31, 2019 and 2018, the Company was managed as a single business unit that provided air transportation and other services for passengers. The Company has two internal passenger groups (Scheduled and Charter), but since they share resources and expenses are combined, they are considered one Passenger operating segment. The Passenger operating revenues include passenger and other revenue. The Company’s chief operating decision maker reviews discrete financial information on a combined basis for passenger and other revenues. The Company’s Passenger operations are highly concentrated in the U.S. but include service to many international locations, primarily based on scheduled service to Latin America during the winter season and on military charter services. In May 2020, the Company began providing air cargo services under the Amazon Agreement. Beginning in the fourth quarter of 2020, in conjunction with the full deployment of all 12 cargo aircraft under the Amazon Agreement and when our Chief Operating Decision Maker began to regularly review financial information for Cargo operations, Cargo services was identified as a separate operating segment. Certain operating expenses are directly attributable to this operating segment and certain operating expenses are allocated between the operating segments. Fuel consumed in Cargo operations is directly reimbursed by Amazon and therefore presented net on the Consolidated Statements of Operations. Non-Fuel operating expenses are allocated based on metrics such as block hours, fleet count and departures, which best align with the nature of the respective expense. The Special Items relate to CARES Act credits and are allocated based on the respective segment salaries, wages, and benefits. 18. OPERATING SEGMENTS (continued) The following table presents financial information for the Company’s two operating segments: Passenger and Cargo. Assets by segment are not reviewed by the Chief Operating Decision Maker and has not been presented herein. Year Ended December 31, 2020 Passenger Cargo Consolidated Operating Revenues $ 364,677 $ 36,809 $ 401,486 Non-Fuel Operating Expenses 332,742 32,530 365,272 Aircraft Fuel 83,392 — 83,392 Special Items, net (53,842) (10,721) (64,563) Total Operating Expenses 362,292 21,809 384,101 Operating Income $ 2,385 $ 15,000 $ 17,385 Interest Income $ 377 Interest Expense (22,073) Other Non-operating Income (Expense), net (371) Income / (Loss) before Income Tax $ (4,682) |
CONDENSED PARENT COMPANY FINANC
CONDENSED PARENT COMPANY FINANCIAL INFORMATION | 12 Months Ended |
Dec. 31, 2020 | |
CONDENSED PARENT COMPANY FINANCIAL INFORMATION | |
CONDENSED PARENT COMPANY FINANCIAL INFORMATION | 19. CONDENSED PARENT COMPANY FINANCIAL INFORMATION The following condensed parent company financial information is presented to show only the parent company, Sun Country Airlines Holdings, Inc. Condensed Balance Sheets December 31, 2020 2019 ASSETS Current Assets: Cash and Equivalents $ — $ 7 Total Current Assets — 7 Other Assets: Investment in Subsidiary 282,569 284,185 Other Assets 1,429 — Total Other Assets 283,998 284,185 Total Assets $ 283,998 $ 284,192 LIABILITIES AND STOCKHOLDERS’ EQUITY Current Liabilities: Other Current Liabilities $ 181 $ 468 Total Current Liabilities 181 468 Total Liabilities 181 468 Stockholders’ Equity: Common Stock 239,162 239,141 Loans to Stockholders (3,500) (3,500) Additional Paid In Capital 9,831 5,855 Retained Earnings 38,324 42,228 Total Stockholders’ Equity 283,817 283,724 Total Liabilities and Stockholders’ Equity $ 283,998 $ 284,192 19. CONDENSED PARENT COMPANY FINANCIAL INFORMATION (continued) Condensed Statements of Operations For the Period Year Ended December 31, April 11, 2018 to 2020 2019 December 31, 2018 Operating Expenses: Other Operating, net $ 179 $ 439 $ 564 Total Operating Expenses 179 439 564 Operating Income / (Loss) (179) (439) (564) Non-operating Income (Expense): Equity in Income / (Loss) of Subsidiaries (3,725) 46,283 197 Other, net — 228 — Total Non-operating Income/ (Expense), net (3,725) 46,511 197 Income / (Loss) before Income Tax (3,904) 46,072 (367) Income Tax Expense / (Benefit) — — — Net Income / (Loss) $ (3,904) $ 46,072 $ (367) Condensed Statements of Cash Flows For the Period Year Ended December 31, April 11, 2018 to 2020 2019 December 31, 2018 Cash Flows from Operating Activities: Net Cash Provided by Operating Activities $ — $ — $ — Cash Flows from Investing Activities: Net Payments to Subsidiary (28) — (47,866) Net Cash Used in Investing Activities (28) — (47,866) Cash Flows from Financing Activities: Cash Contributions from Stockholders — — 47,866 Net Payments from Subsidiary — 7 — Proceeds Received from Exercise of Apollo Warrants 21 — — Net Cash Provided by Financing Activities 21 7 47,866 Net Increase / (Decrease) in Cash, Cash Equivalents and Restricted Cash (7) 7 — Cash, Cash Equivalents and Restricted Cash—Beginning of the Period 7 — — Cash, Cash Equivalents and Restricted Cash—End of the Period $ — $ 7 $ — Basis of Presentation These condensed Parent company-only financial statements are not general-purpose financial statements and should be read in conjunction with the consolidated financial statements. The Parent’s significant accounting policies are consistent with those described in the consolidated financial statements, except that all subsidiaries are accounted for as equity method investments. 19. CONDENSED PARENT COMPANY FINANCIAL INFORMATION (continued) Restrictions and Covenants In accordance with any grants and/or loans received under the CARES Act, we are required to comply with the relevant provisions of the CARES Act and the related implementing agreements which, among other things, include the following: the requirement to use the Payroll Support Payments exclusively for the continuation of payment of crewmember and employee wages, salaries and benefits; the requirement that certain levels of commercial air service be maintained until March 1, 2021, or if ordered by the DOT, March 1, 2022; the prohibitions on share repurchases of listed securities and the payment of common stock (or equivalent) dividends until the later of March 31, 2022 and one year following repayment of the CARES Act Loan; and restrictions on the payment of certain executive compensation until the later of October 1, 2022 and one year following repayment of the CARES Act Loan. |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 6 Months Ended |
Jun. 30, 2021 | |
SUBSEQUENT EVENTS | |
SUBSEQUENT EVENTS | 14. SUBSEQUENT EVENTS The Company evaluated subsequent events for the period from the Balance Sheet date through July 28, 2021, the date that the Condensed Consolidated Financial Statements were available to be issued. * * * * * |
QUARTERLY FINANCIAL DATA (UNAUD
QUARTERLY FINANCIAL DATA (UNAUDITED) | 12 Months Ended |
Dec. 31, 2020 | |
QUARTERLY FINANCIAL DATA (UNAUDITED) | |
QUARTERLY FINANCIAL DATA (UNAUDITED) | 21. QUARTERLY FINANCIAL DATA (UNAUDITED) Quarterly results of operations for the years ended December 31, 2020 and 2019 are summarized below: First Second Third Fourth 2020 Operating Revenues $ 180,330 $ 35,376 $ 77,973 $ 107,807 Operating Income / (Loss) 15,230 (2,234) 8,817 (4,428) Net Income / (Loss) $ 7,251 $ (6,040) $ 2,927 $ (8,042) Earnings / (Loss) Per Share: Basic $ 0.16 $ (0.13) $ 0.06 $ (0.17) Diluted $ 0.15 $ (0.13) $ 0.06 $ (0.17) First Second Third Fourth 2019 Operating Revenues $ 196,669 $ 169,373 $ 171,478 $ 163,864 Operating Income 46,502 9,541 10,475 11,604 Net Income $ 33,368 $ 3,713 $ 3,973 $ 5,018 Earnings Per Share: Basic $ 0.71 $ 0.08 $ 0.08 $ 0.11 Diluted $ 0.71 $ 0.08 $ 0.08 $ 0.10 The sum of the quarterly net income (loss) per common stock share amounts does not equal the annual amount reported since per share amounts are computed independently for each quarter and for the full year based on respective weighted-average common shares outstanding and other dilutive potential common shares. |
BASIS OF PRESENTATION (Policies
BASIS OF PRESENTATION (Policies) | 6 Months Ended | 12 Months Ended |
Jun. 30, 2021 | Dec. 31, 2020 | |
BASIS OF PRESENTATION | ||
Principles of Consolidation | Principles of Consolidation— | |
Fiscal Year | The Company operates its fiscal year on a calendar year basis. | |
Use of Estimates | Use of Estimates— | |
Change in Presentation | Change in Presentation— | |
Cash and Equivalents | Cash and Equivalents— | |
Restricted Cash | Restricted Cash— | |
Investments | Investments— | |
Accounts Receivable | Accounts Receivable— January 1, 2018 | |
Lessor Maintenance Deposits | Lessor Maintenance Deposits— Maintenance reserve payments that are expected to be recoverable via reimbursable expenses are reflected as Lessor Maintenance Deposits on the accompanying Consolidated Balance Sheets. These deposits are expected to be reimbursed to SCA upon performance of maintenance activities. Upon completion of the maintenance event, the lessor is billed and the amount due is recorded in Account Receivable. Amounts not deemed probable of recovery are expensed as incurred. At the Acquisition Date, the Company established a contra-asset to represent the Company’s obligation to perform planned maintenance events on leased aircraft held as of the Acquisition Date. As reimbursable maintenance events are performed and maintenance expense is incurred, the contra-asset is recognized as a reduction to Maintenance expense. The Company’s lease agreements entered into subsequent to the Acquisition Date are structured to allow SCA to access and recover the unused maintenance reserve payments. As such, maintenance reserve payments related to these lease agreements are expected to be recovered in full and are reflected as Lessor Maintenance Deposits on the accompanying Consolidated Balance Sheets. Maintenance reserve payments related to seasonal aircraft are expensed when incurred. | |
Inventory | Inventory— 2. BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) Property & Equipment— Airframes 10 Engines—Core 7 Engines—Initial Greentime (time remaining until the first scheduled major maintenance event) 1st scheduled maintenance event Leasehold Improvements, Aircraft, other 3 Office and Ground Equipment 5 Computer Hardware and Software 3 Property and Equipment under Finance Leases 3 Rotable Parts 6 Modifications that enhance the operating performance or extend the useful lives of leased airframes are considered leasehold improvements and are capitalized and depreciated over the economic life of the asset or the term of the lease, whichever is shorter. Similar modifications made to owned aircraft are capitalized and depreciated consistent with the Company’s policy. The Company capitalizes certain internal and external costs associated with the acquisition and development of internal-use software for new products, and enhancements to existing products, that have reached the application development stage and meet recoverability tests. Capitalized costs include external direct costs of materials and services utilized in developing or obtaining internal-use software, and labor cost for employees who are directly associated with, and devote time, to internal-use software projects. Finance leases are recorded at net present value of future minimum lease payments. The Company depreciates Rotable Parts to an estimated residual value using the pooling life method. Depreciation under the pooling life method is calculated over the estimated average useful life of the related aircraft. | |
Property & Equipment | 2. BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) | |
Evaluation of Long-Lived Assets | Evaluation of Long-Lived Assets— April 11, 2018 January 1, 2018 | |
Equity Incentive Plan | Equity Incentive Plan— | |
Stockholders' Equity | Stockholders’ Equity— In conjunction with the issuance of 1,416,645 shares of Common Stock in 2018 to two stockholders, the Company issued, recourse promissory notes of $3,500 which are included as Loans to Stockholders on the Consolidated Statements of Changes in Stockholders’ Equity. In February of 2021, the promissory notes were repaid in full with equivalent shares of stock. 2. BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) As of December 31, 2020, Amazon held approximately 885,052 vested warrants to acquire common stock of the Company at an exercise price of approximately $15.17 per share. | |
Deferred Offering Costs | Deferred Offering Costs— | |
Goodwill and Other Intangible Assets | Goodwill and Other Intangible Assets— The value of Goodwill and Other Indefinite-lived Intangible Assets is assessed under either a qualitative or quantitative approach. Under a qualitative approach, SCA considers various market factors, including certain key assumptions, such as the market value of other airlines, fuel prices, the overall economy, passenger yields and changes to the regulatory environment. SCA analyzes these factors to determine if events and circumstances have affected the fair value of Goodwill and Other Indefinite-lived Intangible Assets. If it is determined that it is more likely than not that the asset may be impaired, the Company uses a quantitative approach to determine the reporting unit or intangible asset’s fair value incorporating the key assumptions listed below. An impairment charge is recorded for the amount of carrying value that exceeds the determined fair value as of the testing date. When the Company evaluates Goodwill for impairment using a quantitative approach, the Company estimates the fair value of the consolidated reporting unit by considering both comparable public company multiples (a market approach) and projected discounted future cash flows (an income approach). When the Company performs a quantitative impairment assessment of indefinite-lived intangible assets, fair value is estimated based on (1) recent market transactions, where available, (2) the royalty method for the Sun Country tradename (which assumes hypothetical royalties generated from using SCA’s tradename) or (3) projected discounted future cash flows (an income approach). The Company performed its most recent annual Goodwill and Other Indefinite-Lived Intangible Assets impairment analysis as of October 1, 2020 and did not recognize any impairment losses for the years ended December 31, 2020 or 2019 or for the periods April 11, 2018 to December 31, 2018 and January 1, 2018 to April 10, 2018. See Note 3—Impact of the COVID-19 Pandemic. | |
Long-term Debt | Long-term Debt— | |
Revenue Recognition | Revenue Recognition— The Company initially defers ticket sales as an air traffic liability and recognizes revenue when the passenger flight occurs. Unused non-refundable tickets expire at the date of scheduled travel and are recorded as revenue unless the customer notifies the Company in advance of such date that the customer will not travel. If notification is made, a travel credit is created for the face value less applicable change fees. Travel credits can be redeemed toward future travel for up to 12 months after the date of the original booking. A portion of travel credits will expire unused. The Company records an estimate for travel credits that will expire unused in passenger revenue. These estimates are based on historical experience of travel credit activity and consider other facts, such as recent program changes and modifications that could affect the ultimate usage patterns of tickets and travel credits. Due to inherent uncertainly of the current operating environment as a result of COVID-19, adjustments to these estimates could be material in the future. 2. BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) Ancillary revenue for baggage fees, seat selection fees, and on-board sales is recognized when the associated flight occurs. Prior to adoption of the new revenue recognition model effective January 1, 2019, the Company recognized revenue for change fees as the transactions occurred. Under the new standard, revenue for change fees is deferred and recognized when the passenger travel is provided. Fees received in advance of the flight date are initially recorded as an air traffic liability. Charter revenue is recognized at the time of departure when transportation is provided. Cargo revenue is typically recognized based on hours flown, number of flights, and the amount of aircraft resources provided during a reporting period. Pursuant to ASC 606, Revenue from Contracts with Customers, the Amazon Agreement contains three performance obligations: Flight Services, Heavy Maintenance and Fuel. As Sun Country is the principal in providing Flight Services, revenue and related costs are recognized gross on the Statement of Operations. Sun Country acts as the agent in providing the Heavy Maintenance and Fuel performance obligations, which are reimbursed by Amazon based on the actual costs incurred. Consumption of aircraft fuel and heavy maintenance are recognized in revenue, net of the associated costs incurred to fulfill the performance obligations. The transaction price is allocated to the performance obligations based on their relative standalone selling price. The transaction price for flight services, which includes an upfront payment for startup costs, is reduced by the estimated value of warrants to be issued to Amazon based on expected performance under the Amazon Agreement. | |
Loyalty Program | Loyalty Program— | |
Co-branded Credit Card Program | Co-branded Credit Card Program— | |
Airframe and Engine Maintenance | Airframe and Engine Maintenance— The Company applies the Built-in Overhaul method for significant maintenance costs of owned airframe and engines. Under this method, the value of time remaining until the first scheduled major maintenance event (“greentime”) is capitalized and amortized until that first major maintenance event, assuming no residual value. In addition, the value in excess of the greentime is capitalized and amortized over the useful life. These expenses are reported as a component of Depreciation and Amortization on the accompanying Consolidated Statements of Operations. The estimated period until the next scheduled major maintenance event is estimated based on assumptions including estimated cycles, hours, and months, required maintenance intervals, and the age/ condition of related parts. Certain SCA aircraft lease agreements contain provisions that require SCA to return aircraft to the lessor in a certain maintenance condition. A liability associated with returning leased aircraft is accrued when incurrence of lease return costs becomes probable. The amount of these costs typically can be estimated near the end of the lease term, after the aircraft has completed its last maintenance cycle prior to being returned. 2. BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) | |
Income Taxes | Income Taxes— | |
Concentration Risk | Concentration Risk— Approximately 57%, 58% and 48% of the Company’s fuel purchases were made from two vendors for the years ended December 31, 2020, 2019 and 2018, respectively. Approximately 52% of the Company’s workforce were under union contracts as of December 31, 2020 with three different unions: Air Line Pilots Association (“ALPA”), International Brotherhood of Teamsters (“IBT”) and Transport Workers Union (“TWU”). Approximately 98% of the Company’s union workforce are under contracts that have expired or will be expiring within a year. The following table shows the Company’s airline employee groups represented by unions: Employee Group Number of Active Employees Represented Union Date on which Collective Bargaining Agreement Becomes Amendable Sun Country Pilots 395 ALPA October 31, 2020 Sun Country Flight Attendants 466 IBT December 31, 2019 Sun Country Dispatchers 22 TWU November 30, 2024 | |
Recently Adopted And Issued Accounting Standards | Recently Adopted Accounting Standards Income Taxes - Simplifying the Accounting for Income Taxes— Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes | Recently Adopted Accounting Standards Revenue from Contracts with Customers— Revenue from Contracts with Customers The adoption of the New Revenue Standard impacts the Company’s accounting for outstanding loyalty points earned through travel by SCA loyalty program members. There is no change in accounting for issuances of loyalty points to SCA’s co-branded card partner as those are currently reported in accordance with the New Revenue Standard. Through December 31, 2018, the Company used the incremental cost method to account for the portion of the loyalty program liabilities related to points earned through travel, which were valued based on the estimated incremental cost of carrying one additional passenger. The New Revenue Standard required the Company to change to the deferred revenue method and apply a relative standalone selling price approach whereby a portion of each passenger ticket sale attributable to loyalty points earned is deferred and recognized in passenger revenue upon future redemption. Upon adoption of the New Revenue Standard, the Company reclassified certain ancillary revenues from Other Revenue to Passenger Revenue. In addition, certain fees previously recognized when incurred by the customer are deferred and recognized as revenue when passenger travel is provided. 2. BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) Upon adoption of the standard on January 1, 2019 the Company made an adjustment to reduce Retained Earnings by $3,477. Leases— Leases Upon adoption of the standard on January 1, 2019 the Company recorded an Operating Lease Right-of-use (“ROU”) Asset of $178,577 (net of balance sheet reclassifications) and Operating Lease Liabilities of $204,790 on the Consolidated Balance Sheet. This ROU Asset was net of $27,004 reclassified from Over-market Liabilities and $791 reclassified from Prepaid Rent. Capitalized Software Costs— Intangibles—Goodwill and Other—Internal-Use Software (Subtopic 350-40): Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract Non-employee Share-based Payment Accounting— Improvements to Non-employee Share-based Payment Accounting Compensation—Stock Compensation Compensation—Stock Compensation Revenue from Contracts with Customers (Topic 606) Changes to the Disclosure Requirements for Fair Value Measurement— Fair Value Measurement (Topic 820): Disclosure Framework—Changes to the Disclosure Requirements for Fair Value Measurement Financial Instruments—Credit Losses— Financial Instruments—Credit Losses : Measurement of Credit Losses on Financial Instruments Simplifying the Test for Goodwill Impairment— Simplifying the Test for Goodwill Impairment 2. BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) Recently Issued Accounting Standards Income Taxes - Simplifying the Accounting for Income Taxes— Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes |
BASIS OF PRESENTATION AND SUM_2
BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
BASIS OF PRESENTATION | |
Schedule of estimated useful lives of property and equipment | 2. BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) Property & Equipment— Airframes 10 Engines—Core 7 Engines—Initial Greentime (time remaining until the first scheduled major maintenance event) 1st scheduled maintenance event Leasehold Improvements, Aircraft, other 3 Office and Ground Equipment 5 Computer Hardware and Software 3 Property and Equipment under Finance Leases 3 Rotable Parts 6 |
Schedule of airline employee groups represented by unions | The following table shows the Company’s airline employee groups represented by unions: Employee Group Number of Active Employees Represented Union Date on which Collective Bargaining Agreement Becomes Amendable Sun Country Pilots 395 ALPA October 31, 2020 Sun Country Flight Attendants 466 IBT December 31, 2019 Sun Country Dispatchers 22 TWU November 30, 2024 |
BUSINESS COMBINATION (Tables)
BUSINESS COMBINATION (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
BUSINESS COMBINATION | |
Summary of fair value of the assets acquired and the liabilities assumed | Assets: Restricted Cash $ 8,308 Investments 3,810 Accounts Receivable 31,796 Inventory 5,295 Prepaid Expenses 7,617 Property and Equipment 38,511 Goodwill 222,223 Other Intangible Assets 104,000 Aircraft Lease Deposits 17,923 Deferred Tax Asset 49,634 Other Assets 1,071 Total Assets 490,188 Liabilities: Accounts Payable 50,016 Accrued Salaries, Wages, and Benefits 9,006 Accrued Transportation Taxes 12,237 Air Traffic Liabilities 72,235 Over-market Liabilities 108,017 Finance Lease Obligations 10,038 Loyalty Program Liabilities 37,165 Long-term Debt 941 Other Liabilities 2,758 Total Liabilities 302,413 Total Purchase Price $ 187,775 |
REVENUE (Tables)
REVENUE (Tables) | 6 Months Ended | 12 Months Ended |
Jun. 30, 2021 | Dec. 31, 2020 | |
REVENUE | ||
Schedule of significant categories comprising operating revenues | Three Months Ended June 30, Six Months Ended June 30, 2021 2020 2021 2020 Scheduled service $ 67,073 $ 17,882 $ 121,693 $ 132,110 Charter service 28,898 8,491 54,703 37,718 Ancillary 29,159 4,968 52,929 39,999 Passenger 125,130 31,341 229,325 209,827 Cargo 22,098 3,219 43,684 3,219 Other 1,961 816 3,793 2,660 Total Operating Revenue $ 149,189 $ 35,376 $ 276,802 $ 215,706 | Successor Predecessor Year Ended December 31, For the Period April 11, 2018 to For the Period January 1, 2018 to 2020 2019 December 31, 2018 April 10, 2018 Scheduled service $ 193,047 $ 396,113 $ 224,507 $ 132,234 Charter service 98,130 174,562 111,317 40,663 Ancillary (1) 68,055 118,158 — — Passenger 359,232 688,833 335,824 172,897 Cargo 36,809 — — — Ancillary (1) — — 41,065 15,670 Other 5,445 12,551 8,042 8,885 Total Operating Revenue $ 401,486 $ 701,384 $ 384,931 $ 197,452 (1) |
Schedule of operating revenue by geographic region | Three Months Ended June 30, Six Months Ended June 30, 2021 2020 2021 2020 Domestic $ 142,774 $ 34,307 $ 262,020 $ 197,345 Latin America 6,266 1,038 14,228 18,114 Other 149 31 554 247 Total Operating Revenue $ 149,189 $ 35,376 $ 276,802 $ 215,706 | Successor Predecessor Year Ended December 31, For the Period April 11, 2018 to For the Period January 1, 2018 to 2020 2019 December 31, 2018 April 10, 2018 Domestic $ 382,463 $ 666,332 $ 368,456 $ 173,995 Latin America 18,515 33,716 15,628 23,003 Other 508 1,336 847 454 Total Operating Revenue $ 401,486 $ 701,384 $ 384,931 $ 197,452 |
Summary of contract assets and liabilities | June 30, 2021 December 31, 2020 Contract Assets Costs to fulfill contract with Amazon $ 3,203 $ 3,614 Air Traffic Liabilities $ 113,771 $ 101,075 Loyalty Program Liabilities 20,877 22,069 Amazon Deferred Up-front Payment 4,772 5,240 Total Contract Liabilities $ 139,420 $ 128,384 | December 31, 2020 2019 Contract Assets Costs to fulfill contract with Amazon $ 3,614 $ — Air Traffic Liabilities $ 101,075 $ 116,660 Loyalty Program Liabilities 22,069 22,892 Amazon Deferred Start-up Costs Payments Received 5,240 1,633 Total Contract Liabilities $ 128,384 $ 141,185 |
Schedule of change in contract with customer, liability | 2021 2020 Balance—January 1 $ 22,069 $ 22,892 Loyalty Points Earned 1,904 2,621 Loyalty Points Redeemed (1) (3,096) (3,395) Balance—June 30 $ 20,877 $ 22,118 (1) Principally relates to revenue recognized from the redemption of loyalty points for both air and non-air travel awards. Loyalty points are combined in one homogenous pool and are not separately identifiable. As such, the revenue recognized is comprised of points that were part of the Loyalty Program Liabilities balance at the beginning of the period, as well as points that were earned during the period. | 2020 2019 Balance—December 31, 2018 $ 23,950 ASC 606 adoption adjustment (January 1, 2019) 4,867 Balance—January 1 $ 22,892 $ 28,817 Loyalty Points Earned 4,015 6,483 Loyalty Points Redeemed (1) (4,838) (12,408) Balance—December 31 $ 22,069 $ 22,892 (1) Principally relates to revenue recognized from the redemption of loyalty points for both air and non-air travel awards. Loyalty points are combined in one homogenous pool and are not separately identifiable. As such, the redemptions are comprised of points that were part of the Loyalty Program Liabilities balance at the beginning of the period, as well as loyalty points that were earned during the period. |
EARNINGS PER SHARE (Tables)
EARNINGS PER SHARE (Tables) | 6 Months Ended | 12 Months Ended |
Jun. 30, 2021 | Dec. 31, 2020 | |
EARNINGS PER SHARE | ||
Summary of computation of basic and diluted earnings per share | Three Months Ended June 30, Six Months Ended June 30, 2021 2020 2021 2020 Numerator: Net Income (Loss) $ 51,753 $ (6,040) $ 64,169 $ 1,211 Denominator: Weighted Average Common Shares Outstanding—Basic 57,156,159 46,805,950 52,850,041 46,805,950 Dilutive effect of Stock Options and Warrants (1) 4,826,282 — 4,553,552 1,437,196 Weighted Average Common Shares Outstanding—Diluted 61,982,441 46,805,950 57,403,593 48,243,146 Basic earnings (loss) per share $ 0.91 $ (0.13) $ 1.21 $ 0.03 Diluted earnings (loss) per share $ 0.83 $ (0.13) $ 1.12 $ 0.02 (1) There were 3,547,524 and 3,636,773 performance-based stock options outstanding at June 30, 2021 and 2020, respectively. As a result of the Company’s initial public offering, 75% of these options are expected to meet the performance conditions and are included in dilutive options at June 30, 2021. At June 30, 2020, these options were excluded from the calculation of diluted EPS since the performance conditions were not considered likely to be met. | Successor Predecessor Year Ended December 31, For the Period April 11, 2018 to For the Period January 1, 2018 to 2020 2019 December 31, 2018 April 10, 2018 Numerator: Net income / (Loss) $ (3,904) $ 46,072 $ (367) $ 25,910 Denominator: Weighted Average Common Shares Outstanding—Basic 46,806,042 46,773,038 46,700,990 100,000,000 Dilutive effects of Warrants — — — — Dilutive effect of Stock Options and Warrants (1) — 1,136,375 — — Weighted Average Common Shares Outstanding—Diluted 46,806,042 47,909,413 46,700,990 100,000,000 Basic earnings / (loss) per share $ (0.08) $ 0.99 $ (0.01) $ 0.26 Diluted earnings / (loss) per share $ (0.08) $ 0.96 $ (0.01) $ 0.26 (1) There were 3,577,252 , 3,502,925 and 3,583,923 performance-based stock options outstanding as of December 31, 2020, 2019 and 2018, respectively, that were excluded from the calculation of diluted EPS. Additionally, in loss periods, the inclusion of unvested options would have an anti-dilutive effect. |
PROPERTY & EQUIPMENT (Tables)
PROPERTY & EQUIPMENT (Tables) | 6 Months Ended | 12 Months Ended |
Jun. 30, 2021 | Dec. 31, 2020 | |
AIRCRAFT | ||
Summary of aircraft fleet activity | December 31, 2020 Additions Removals June 30, 2021 Passenger: Owned 14 6 — 20 Finance leases 5 2 — 7 Operating leases 12 — (6) 6 Sun Country Airlines' Fleet 31 8 (6) 33 Cargo: Aircraft Operated for Amazon 12 — — 12 Total Aircraft Operated 43 8 (6) 45 December 31, 2019 Additions Removals June 30, 2020 Passenger: Owned 5 9 — 14 Finance leases 10 — (5) 5 Operating leases 14 — (2) 12 Seasonal leases 2 — (2) — Sun Country Airlines' Fleet 31 9 (9) 31 Cargo: Aircraft Operated for Amazon — 7 — 7 Total Aircraft Operated 31 16 (9) 38 | The following tables summarize the Company’s aircraft fleet activity for the years ended December 31, 2020 and 2019, respectively: December 31, 2019 Additions Removals December 31, 2020 Passenger: Owned 5 9 — 14 Finance leases 10 — (5) 5 Operating leases 14 — (2) 12 Seasonal leases 2 — (2) — Sun Country Airlines’ Fleet 31 9 (9) 31 Cargo Aircraft Operated for Amazon — 12 — 12 Total Aircraft Operated 31 21 (9) 43 The 12 cargo aircraft added during 2020 relate to the Amazon Agreement (see Note 1). December 31, 2018 Additions Removals December 31, 2019 Owned 3 2 — 5 Finance leases 5 5 — 10 Operating leases 19 — (5) 14 Seasonal leases 3 2 (3) 2 Sun Country Airlines’ Fleet 30 9 (8) 31 |
GOODWILL AND OTHER INTANGIBLE_2
GOODWILL AND OTHER INTANGIBLE ASSETS (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
GOODWILL AND OTHER INTANGIBLE ASSETS | |
Schedule of goodwill and other intangible assets | December 31, 2020 Gross Carrying Amount Accumulated Amortization Net Carrying Value Goodwill $ 222,223 $ — $ 222,223 Intangible Assets with Finite Lives: Customer Relationships 48,000 (10,890) 37,110 Intangible Assets with Indefinite Lives: Tradename 56,000 — 56,000 Total Other Intangible Assets 104,000 (10,890) 93,110 Total Goodwill and Other Intangible Assets $ 326,223 $ (10,890) $ 315,333 December 31, 2019 Gross Carrying Amount Accumulated Amortization Net Carrying Value Goodwill $ 222,223 $ — $ 222,223 Intangible Assets with Finite Lives: Customer Relationships 48,000 (6,890) 41,110 Intangible Assets with Indefinite Lives: Tradename 56,000 — 56,000 Total Other Intangible Assets 104,000 (6,890) 97,110 Total Goodwill and Other Intangible Assets $ 326,223 $ (6,890) $ 319,333 |
DEBT (Tables)
DEBT (Tables) | 6 Months Ended | 12 Months Ended |
Jun. 30, 2021 | Dec. 31, 2020 | |
DEBT | ||
Summary of long term debt | June 30, 2021 December 31, 2020 Notes payable under the Company's 2019-1 EETC agreement dated December 2019, with original loan amounts of $248,587 payable in bi-annual installments, in June and December, through December 2027. These notes bear interest at an annual rate of between 4.13% and 6.95% and the weighted average interest rate is 4.78%. $ 211,605 $ 227,347 Delayed Draw Term Loan Facility (see terms and conditions above) 79,494 — U. S. Department of the Treasury CARES Act Loan (see terms and conditions above) — 45,419 Notes payable to Wilmington Trust Company. Notes bear interest at an annual rate of 8.45% and were scheduled to mature Nov. 2023 to Feb. 2024. In April 2021, these notes were repaid. — 12,506 Other Notes payable. These notes bear interest at an annual rate of approximately 5.0% and mature March 2029. 493 529 Total Debt 291,592 285,801 Less: Unamortized debt issuance costs (4,113) (3,338) Less: Current Maturities of Long-term Debt (19,795) (26,118) Total Long-term Debt $ 267,684 $ 256,345 | December 31, 2020 December 31, 2019 Notes payable under the Company’s 2019-1 EETC agreement dated December 2019, with original loan amounts of $248,587 payable in bi-annual installments through December 2027. These notes bear interest at an annual rate of between 4.13% and 6.95% and are secured by the equipment for which the loan was used $ 227,347 $ 28,280 U. S. Department of the Treasury CARES Act Loan (see terms and conditions above) 45,419 — Notes payable to Wilmington Trust Company dated October and November 2018, with original loan amounts totaling $55,671 payable in monthly installments through November 2023. These notes bore interest at an annual rate of 8.45%. They were refinanced in January 2020 through 2019-1 EETC notes — 46,617 Note payable to Wilmington Trust Company dated February 2019, with an original loan amount of $12,750 payable in monthly installments of $151 through January 2024, and then final lump sum payment of $2,825 in February 2024. This note bears interest at an annual rate of 8.45% and is secured by the equipment for which the loan was used 9,813 11,237 Note payable to Wilmington Trust Company dated November 2018, with an original loan amount of $3,671 payable in monthly installments of $44 through October 2023, and then final lump sum payment of $1,101 in November 2023. This note bears interest at an annual rate of 8.45% and is secured by the equipment for which the loan was used 2,693 3,105 Note payable to Alliance Bank dated February 2019, with an original loan amount of $600 payable in monthly installments of $5 through March 2029. This note bears interest at an annual rate of 5.0% 519 569 Notes payable to Riverland Bank dated between April 2015 and May 2016, with original loan amounts totaling $734 payable in monthly installments with expirations between April 2020 and April 2021. The notes bear interest at an annual rate of 5.15% and are secured by the equipment for which the loan was used 10 97 Total Debt 285,801 89,905 Less: Unamortized debt issuance costs (3,338) (2,988) Less: Current Maturities of Long-term Debt (26,118) (13,197) Total Long-term Debt $ 256,345 $ 73,720 |
Schedule of future maturities of the outstanding debt | Debt Principal Amortization of Debt Payments Issuance Costs Net Debt Remainder of 2021 $ 10,661 $ (509) $ 10,152 2022 30,367 (983) 29,384 2023 42,358 (908) 41,450 2024 44,000 (785) 43,215 2025 49,087 (670) 48,417 Thereafter 115,119 (258) 114,861 Total as of June 30, 2021 $ 291,592 $ (4,113) $ 287,479 | Year Ending December 31 Debt Principal Payments Amortization of Debt Issuance Costs Net Debt 2021 $ 26,928 $ (810) $ 26,118 2022 28,846 (752) 28,094 2023 43,819 (678) 43,141 2024 67,659 (554) 67,105 2025 64,810 (342) 64,468 Thereafter 53,739 (202) 53,537 Total $ 285,801 $ (3,338) $ 282,463 |
Schedule of debt measured at fair value | June 30, 2021 December 31, 2020 Carrying Amount $ 291,592 $ 285,801 Fair Value $ 281,640 $ 279,119 | December 31, 2020 December 31, 2019 Carrying Amount $ 285,801 $ 89,905 Fair Value $ 279,119 $ 96,342 |
LEASES (Tables)
LEASES (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
LEASES | |
Summary of lease-related assets and liabilities | The following table summarizes the lease-related assets and liabilities recorded on the Company’s Consolidated Balance Sheets: Classification December 31, 2020 December 31, 2019 Assets Finance lease assets, net Property and Equipment, net $ 104,815 $ 194,328 Operating lease assets Operating Lease Right-of-use Assets 121,269 147,148 Total lease assets $ 226,084 $ 341,476 Liabilities Current: Finance lease liabilities Short-term Finance Lease Obligations $ 11,460 $ 92,318 Operating lease liabilities Short-term Operating Lease Obligations 34,492 30,611 Long-term: Finance lease liabilities Long-term Finance Lease Obligations 95,710 105,037 Operating lease liabilities Long-term Operating Lease Obligations 112,707 141,879 Total lease liabilities $ 254,369 $ 369,845 |
Summary of obligations under finance leases | The following table provides details of the Company’s obligations under finance and operating leases as of December 31, 2020: Finance Operating Leases Leases Aircraft Real Estate Other Total 2021 $ 17,572 $ 38,076 $ 2,218 $ 1,675 $ 41,969 2022 15,460 32,842 1,962 1,561 36,365 2023 15,460 32,592 1,466 659 34,717 2024 25,177 24,476 1,466 — 25,942 2025 12,489 9,630 1,466 — 11,096 Thereafter 52,949 8,222 5,071 — 13,293 Total Minimum Lease Payments 139,107 145,838 13,649 3,895 163,382 Less: Amount Representing Interest (31,937) (18,034) (2,662) (265) (20,961) Present Value of Minimum Lease Payments 107,170 127,804 10,987 3,630 142,421 Plus: Tennant Improvements — — 4,778 — 4,778 Less: Short-term Obligations (11,460) (30,880) (2,105) (1,507) (34,492) Long-term Lease Obligations $ 95,710 $ 96,924 $ 13,660 $ 2,123 $ 112,707 |
Summary of obligations under operating leases | The following table provides details of the Company’s obligations under finance and operating leases as of December 31, 2020: Finance Operating Leases Leases Aircraft Real Estate Other Total 2021 $ 17,572 $ 38,076 $ 2,218 $ 1,675 $ 41,969 2022 15,460 32,842 1,962 1,561 36,365 2023 15,460 32,592 1,466 659 34,717 2024 25,177 24,476 1,466 — 25,942 2025 12,489 9,630 1,466 — 11,096 Thereafter 52,949 8,222 5,071 — 13,293 Total Minimum Lease Payments 139,107 145,838 13,649 3,895 163,382 Less: Amount Representing Interest (31,937) (18,034) (2,662) (265) (20,961) Present Value of Minimum Lease Payments 107,170 127,804 10,987 3,630 142,421 Plus: Tennant Improvements — — 4,778 — 4,778 Less: Short-term Obligations (11,460) (30,880) (2,105) (1,507) (34,492) Long-term Lease Obligations $ 95,710 $ 96,924 $ 13,660 $ 2,123 $ 112,707 |
Summary of lease costs related to the Finance and Operating Leases | The following table presents lease costs related to the Company’s Finance and Operating Leases: Successor Predecessor Year Ended December 31, For the Period April 11, 2018 to For the Period January 1, Classification 2020 2019 2018 April 10, 2018 Finance lease cost Amortization of leased assets Depreciation and Amortization $ 11,948 $ 13,104 $ 4,475 $ 119 Interest on lease liabilities Interest Expense 8,659 10,741 4,754 293 Operating lease cost Included in ROU asset—Aircraft Aircraft Rent (1) 30,717 40,043 33,315 16,177 Included in ROU asset—Other Ground Handling, Landing Fees and Airport Rent & Other Operating 4,872 5,415 3,832 1,648 Short-term Aircraft Rent 1,813 5,345 2,622 6,148 Variable—Aircraft Aircraft Rent (1) (1,541) 4,520 894 6,004 Variable—Other Landing Fees & Airport Rentals 1,049 1,345 702 440 Total Lease cost $ 57,517 $ 80,513 $ 50,594 $ 30,829 (1) The years ended December 31, 2020 and 2019, include credits of $14,110 and $20,386 , respectively, for the amortization of Over-market Liabilities established at the Acquisition Date. For the 2018 Successor and Predecessor periods, the credits were $17,275 and none , respectively. |
Summary of supplemental cash flow information related to leases | The following table presents Supplemental cash flow information related to leases, included in the Consolidated Statements of Cash Flows: For the Year Ended December 31, 2020 2019 Cash paid for amounts included in the measurement of lease liabilities: Operating Cash Flows for Operating Leases $ 34,576 $ 50,081 Operating Cash Flows for Finance Leases $ 8,659 $ 10,741 Financing Cash Flows for Finance Leases $ 89,697 $ 8,258 |
Summary of lease-related terms and discount rates | The table below presents lease-related terms and discount rates related to the Company’s Finance and Operating Leases: December 31, 2020 December 31, 2019 Weighted-average remaining lease term Operating Leases 4.8 years 6.0 years Finance Leases 8.6 years 6.0 years Weighted-average discount rates Operating Leases 6.0 % 5.8 % Finance Leases 6.1 % 6.0 % |
STOCK-BASED COMPENSATION (Table
STOCK-BASED COMPENSATION (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
STOCK-BASED COMPENSATION | |
Summary of stock option activity | Time-Based Stock Options Number of shares Weighted average exercise price per share Weighted average grant date fair value Weighted average remaining contractual term (years) Outstanding as of December 31, 2018 2,243,588 $ 5.29 $ 2.39 9.8 Granted 472,253 $ 7.93 $ 3.14 Forfeited (434,533) $ 5.29 $ 2.39 Outstanding as of December 31, 2019 2,281,308 $ 5.84 $ 2.54 9.0 Granted 221,941 $ 17.99 $ 7.02 Forfeited (173,788) $ 14.65 $ 5.70 Outstanding as of December 31, 2020 2,329,461 $ 6.36 $ 2.74 7.6 Exercisable as of December 31, 2020 1,054,059 $ 5.64 $ 2.50 Vested or expected to vest, December 31, 2020 2,329,461 $ 6.36 $ 2.74 11. STOCK-BASED COMPENSATION (continued) Performance-Based Stock Options Number of Weighted Weighted Weighted Outstanding as of December 31, 2018 3,583,923 $ 5.29 $ 1.50 9.8 Granted 746,836 $ 7.96 $ 2.01 Forfeited (827,812) $ 5.29 $ 1.50 Outstanding as of December 31, 2019 3,502,947 $ 5.86 $ 1.61 9.0 Granted 346,984 $ 17.99 $ 4.36 Forfeited (272,679) $ 14.65 $ 3.59 Outstanding as of December 31, 2020 3,577,252 $ 6.38 $ 1.72 7.6 Exercisable as of December 31, 2020 — $ — $ — Vested or expected to vest, December 31, 2020 — $ — $ — |
Schedule of stock options valuation assumptions | 2020 2019 Expected Term 5.59 years 5.67 years Expected Volatility 38.8 % 33.9 % Risk-free Interest Rate 1.7 % 1.7 % Expected Dividend Yield — — |
FUEL DERIVATIVES AND RISK MAN_2
FUEL DERIVATIVES AND RISK MANAGEMENT (Tables) | 6 Months Ended | 12 Months Ended |
Jun. 30, 2021 | Dec. 31, 2020 | |
FUEL DERIVATIVES AND RISK MANAGEMENT | ||
Schedule of changes in derivative assets (liabilities) | Six Months Ended June 30, 2021 2020 Balance - January 1 $ (1,174) $ 2,233 Non-cash Gains (Losses) 3,599 (16,056) Contract Settlements (827) 4,990 Balance - June 30 $ 1,598 $ (8,833) | Year Ended December 31, 2020 2019 Balance—January 1 $ 2,233 $ (12,006) Non-cash gains (losses) (12,206) 10,791 Contract settlements 8,800 3,448 Balance—December 31 $ (1,173) $ 2,233 |
Schedule of fuel derivative gains (losses) | Three Months Ended June 30, Six Months Ended June 30, 2021 2020 2021 2020 Non-cash Gains (Losses) $ 1,213 $ 5,695 $ 3,599 $ (16,056) Cash Premiums Paid — (1,617) — (1,901) Total Fuel Derivative Gains (Losses) $ 1,213 $ 4,078 $ 3,599 $ (17,957) | Year Ended December 31, For the Period 2020 2019 December 31, 2018 Non-cash gains (losses) $ (12,206) $ 10,791 $ (12,006) Cash Premiums Paid (2,053) (665) (2,280) Total Fuel Derivative gains (losses) $ (14,259) $ 10,126 $ (14,286) |
FAIR VALUE MEASUREMENTS (Tables
FAIR VALUE MEASUREMENTS (Tables) | 6 Months Ended | 12 Months Ended |
Jun. 30, 2021 | Dec. 31, 2020 | |
FAIR VALUE MEASUREMENTS | ||
Summary of assets and liabilities measured at fair value on a recurring basis | June 30, 2021 Level 1 Level 2 Level 3 Total Assets Fuel Derivative Contracts $ — $ 1,598 $ — $ 1,598 Total Assets measured at fair value on a recurring basis $ — $ 1,598 $ — $ 1,598 December 31, 2020 Level 1 Level 2 Level 3 Total Liabilities Fuel Derivative Contracts $ — $ 1,174 $ — $ 1,174 Total Liabilities measured at fair value on a recurring basis $ — $ 1,174 $ — $ 1,174 | December 31, 2020 Level 1 Level 2 Level 3 Total Liabilities Fuel Derivative Contracts $ — $ 1,173 $ — $ 1,173 Total Liabilities measured at fair value on a recurring basis $ — $ 1,173 $ — $ 1,173 December 31, 2019 Level 1 Level 2 Level 3 Total Assets Fuel Derivative Contracts $ — $ 2,233 $ — $ 2,233 Total Assets measured at fair value on a recurring basis $ — $ 2,233 $ — $ 2,233 |
INCOME TAXES (Table)
INCOME TAXES (Table) | 12 Months Ended |
Dec. 31, 2020 | |
INCOME TAXES | |
Summary of the significant components of the provision for income taxes from continuing operations | Successor Year Ended December 31, For the period 2020 2019 December 31, 2018 Current: Federal $ — $ — $ — State and Local 10 66 — Total Current Tax Expense 10 66 — Deferred: Federal (597) 12,509 129 State and Local (191) 1,513 32 Total Deferred Tax Expense / (Benefit) (788) 14,022 161 Total Income Tax Expense / (Benefit) $ (778) $ 14,088 $ 161 |
Summary of difference of income tax provision from that computed at the federal statutory corporate tax rate | Successor Year Ended December 31, For the period 2020 2019 December 31, 2018 Expected Provision at Federal Statutory Tax Rate 21.0 % 21.0 % 21.0 % State Tax, net of Federal Impact 3.1 % 2.1 % (12.0) % Employee Parking (3.3) % 0.2 % (40.4) % Meals and Entertainment (2.2) % 0.2 % (42.9) % Other Permanent Adjustments (2.0) % 0.0 % (3.6) % Effective Tax Rate 16.6 % 23.5 % (77.9) % |
Summary of the significant components of the deferred taxes | December 31, 2020 2019 Deferred Tax Assets: Net Operating Loss $ 75,389 $ 24,680 Operating Lease Obligations 32,942 38,629 Finance Lease Obligations 20,095 45,392 Goodwill and Other Intangible Assets 12,586 15,325 Loyalty Program Liabilities 4,911 5,064 Accrued Maintenance 4,434 7,481 Other 4,318 2,769 Total Deferred Tax Assets 154,675 139,340 Deferred Tax Liabilities: Accelerated Depreciation (67,105) (24,858) Operating Lease Right-of-use Assets (27,892) (33,844) Finance Lease Assets (23,462) (44,696) Unrealized Gain on Fuel Derivatives — (514) Total Deferred Tax Liabilities (118,459) (103,912) Total Net Deferred Tax Assets $ 36,216 $ 35,428 |
DEFINED CONTRIBUTION 401K (Tabl
DEFINED CONTRIBUTION 401K (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
DEFINED CONTRIBUTION 401K | |
Schedule of 401(k) contributions | Successor Predecessor Year Ended December 31, For the Period For the Period 2020 2019 December 31, 2018 April 10, 2018 Non-Discretionary $ 1,040 $ 908 $ 592 $ 308 Discretionary 4,263 4,246 2,436 1,026 Total 401(k) Contributions $ 5,303 $ 5,154 $ 3,028 $ 1,334 |
SPECIAL ITEMS, NET (Tables)
SPECIAL ITEMS, NET (Tables) | 6 Months Ended | 12 Months Ended |
Jun. 30, 2021 | Dec. 31, 2020 | |
SPECIAL ITEMS, NET | ||
Schedule of special items, net | Three Months Ended June 30, Six Months Ended June 30, 2021 2020 2021 2020 CARES Act grant recognition (1) $ (39,378) $ (31,516) $ (71,587) $ (31,516) CARES Act employee retention credit (2) (446) — (780) — Aircraft lease buy-out expense (3) 1,299 — 6,963 — Other 5 35 12 35 Total Special Items, net $ (38,520) $ (31,481) $ (65,392) $ (31,481) (1) In the quarter ended March 31, 2021, the Treasury awarded the Company a grant of $32,208 under PSP2. On April 22, 2021, the Company received an additional $4,831 from the Treasury as a top-off grant under PSP2. Further, during the quarter ended June 30, 2021, the Company received a grant of $34,547 under PSP3. (2) The CARES Act Employee Retention credit relates to a refundable tax credit against certain employment taxes. (3) Five aircraft were purchased in March 2021 that were previously under operating leases. One additional aircraft was purchased in April 2021 that was previously under an operating lease. Aircraft lease buy-out expense represents the net costs incurred to terminate the leases on those six aircraft. This includes the associated lease termination costs, write-off of previously capitalized maintenance deposits, and the write-off of over-market liabilities (see Note 6). | Successor Predecessor Year Ended December 31, For the Period For the Period 2020 2019 December 31, 2018 April 10, 2018 CARES Act grant recognition (1) $ (62,312) $ — $ — $ — CARES Act employee retention credit (2) (2,328) — — — Contractual obligations for retired technology (3) — 7,578 — — Sale of airport slot rights (4) — (1,200) — — Sun Country Rewards program modifications (5) — — (8,463) — Early-out payments and other outsourcing expenses (6) — — 1,757 271 Other (7) 77 714 — — Total Special Items, net $ (64,563) $ 7,092 $ (6,706) $ 271 (1) Relates to the credit recognized under the CARES Act Payroll Support Program through December 31, 2020. Under the Payroll Support Program, the United States Department of the Treasury provided the Company with a Payroll Support grant, which was to be used exclusively for the continuation of payments for salaries, wages, and benefits. (see Note 3 for more information). (2) Relates to the credit recognized under the CARES Act Employee Retention credit which is a refundable tax credit against certain employment taxes (see Note 3 for more information). (3) This was a charge related to contractual obligations for retired technology. In connection with implementing SCA’s new reservations systems, the Company incurred obligations under the contracts for existing systems that were being phased out ahead of their scheduled contract terms. 16. SPECIAL ITEMS, NET (continued) (4) Represents proceeds from the sale of unused airport slot rights. SCA does not hold any other remaining airport slot rights; therefore this gain does not reflect the Company’s continuing operations. (5) This reduction to expense is associated with changes to the terms of the Sun Country Rewards program. As of November 3, 2018, the Company modified policies within the program which accelerated loyalty point expiration, while making points more valuable for its members. (6) Related to early-out payments and other expenses incurred in connection with outsourcing certain operations personnel and other employee initiatives. These efforts were primarily related to airport station, flight attendants and ground handling employees. (7) Consists of employee relocation costs due to closing flight attendant bases and costs to exit the Company’s prior headquarters building. |
OPERATING SEGMENTS (Tables)
OPERATING SEGMENTS (Tables) | 6 Months Ended | 12 Months Ended |
Jun. 30, 2021 | Dec. 31, 2020 | |
OPERATING SEGMENTS | ||
Summary of financial information for the operating segments | Three Months Ended June 30, 2021 Three Months Ended June 30, 2020 Passenger Cargo Consolidated Passenger Cargo (1) Consolidated Operating Revenues $ 127,091 $ 22,098 $ 149,189 $ 32,157 $ 3,219 $ 35,376 Non-Fuel Operating Expenses 92,361 16,401 108,762 63,507 4,907 68,414 Aircraft Fuel 29,657 52 29,709 677 — 677 Special Items, net (28,784) (9,736) (38,520) (28,111) (3,370) (31,481) Total Operating Expenses 93,234 6,717 99,951 36,073 1,537 37,610 Operating Income (Loss) $ 33,857 $ 15,381 49,238 $ (3,916) $ 1,682 (2,234) Interest Income 9 63 Interest Expense (6,080) (5,442) Other, net 18,054 (325) Income (Loss) before Income Tax $ 61,221 $ (7,938) Six Months Ended June 30, 2021 Six Months Ended June 30, 2020 Passenger Cargo Consolidated Passenger Cargo (1) Consolidated Operating Revenues $ 233,118 $ 43,684 $ 276,802 $ 212,487 $ 3,219 $ 215,706 Non-Fuel Operating Expenses 179,566 34,472 214,038 173,046 4,907 177,953 Aircraft Fuel 53,912 72 53,984 56,238 — 56,238 Special Items, net (46,991) (18,401) (65,392) (28,111) (3,370) (31,481) Total Operating Expenses 186,487 16,143 202,630 201,173 1,537 202,710 Operating Income $ 46,631 $ 27,541 74,172 $ 11,314 $ 1,682 12,996 Interest Income 24 314 Interest Expense (13,201) (11,058) Other, net 18,049 (494) Income before Income Tax $ 79,044 $ 1,758 (1) As air cargo operations commenced in May 2020, there are limited Cargo amounts included in the three and six month periods ended June 30, 2020. | Year Ended December 31, 2020 Passenger Cargo Consolidated Operating Revenues $ 364,677 $ 36,809 $ 401,486 Non-Fuel Operating Expenses 332,742 32,530 365,272 Aircraft Fuel 83,392 — 83,392 Special Items, net (53,842) (10,721) (64,563) Total Operating Expenses 362,292 21,809 384,101 Operating Income $ 2,385 $ 15,000 $ 17,385 Interest Income $ 377 Interest Expense (22,073) Other Non-operating Income (Expense), net (371) Income / (Loss) before Income Tax $ (4,682) |
CONDENSED PARENT COMPANY FINA_2
CONDENSED PARENT COMPANY FINANCIAL INFORMATION (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
CONDENSED PARENT COMPANY FINANCIAL INFORMATION | |
Schedule of condensed financial statements | Condensed Balance Sheets December 31, 2020 2019 ASSETS Current Assets: Cash and Equivalents $ — $ 7 Total Current Assets — 7 Other Assets: Investment in Subsidiary 282,569 284,185 Other Assets 1,429 — Total Other Assets 283,998 284,185 Total Assets $ 283,998 $ 284,192 LIABILITIES AND STOCKHOLDERS’ EQUITY Current Liabilities: Other Current Liabilities $ 181 $ 468 Total Current Liabilities 181 468 Total Liabilities 181 468 Stockholders’ Equity: Common Stock 239,162 239,141 Loans to Stockholders (3,500) (3,500) Additional Paid In Capital 9,831 5,855 Retained Earnings 38,324 42,228 Total Stockholders’ Equity 283,817 283,724 Total Liabilities and Stockholders’ Equity $ 283,998 $ 284,192 19. CONDENSED PARENT COMPANY FINANCIAL INFORMATION (continued) Condensed Statements of Operations For the Period Year Ended December 31, April 11, 2018 to 2020 2019 December 31, 2018 Operating Expenses: Other Operating, net $ 179 $ 439 $ 564 Total Operating Expenses 179 439 564 Operating Income / (Loss) (179) (439) (564) Non-operating Income (Expense): Equity in Income / (Loss) of Subsidiaries (3,725) 46,283 197 Other, net — 228 — Total Non-operating Income/ (Expense), net (3,725) 46,511 197 Income / (Loss) before Income Tax (3,904) 46,072 (367) Income Tax Expense / (Benefit) — — — Net Income / (Loss) $ (3,904) $ 46,072 $ (367) Condensed Statements of Cash Flows For the Period Year Ended December 31, April 11, 2018 to 2020 2019 December 31, 2018 Cash Flows from Operating Activities: Net Cash Provided by Operating Activities $ — $ — $ — Cash Flows from Investing Activities: Net Payments to Subsidiary (28) — (47,866) Net Cash Used in Investing Activities (28) — (47,866) Cash Flows from Financing Activities: Cash Contributions from Stockholders — — 47,866 Net Payments from Subsidiary — 7 — Proceeds Received from Exercise of Apollo Warrants 21 — — Net Cash Provided by Financing Activities 21 7 47,866 Net Increase / (Decrease) in Cash, Cash Equivalents and Restricted Cash (7) 7 — Cash, Cash Equivalents and Restricted Cash—Beginning of the Period 7 — — Cash, Cash Equivalents and Restricted Cash—End of the Period $ — $ 7 $ — |
QUARTERLY FINANCIAL DATA (UNA_2
QUARTERLY FINANCIAL DATA (UNAUDITED) (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
QUARTERLY FINANCIAL DATA (UNAUDITED) | |
Schedule of quarterly financial data | First Second Third Fourth 2020 Operating Revenues $ 180,330 $ 35,376 $ 77,973 $ 107,807 Operating Income / (Loss) 15,230 (2,234) 8,817 (4,428) Net Income / (Loss) $ 7,251 $ (6,040) $ 2,927 $ (8,042) Earnings / (Loss) Per Share: Basic $ 0.16 $ (0.13) $ 0.06 $ (0.17) Diluted $ 0.15 $ (0.13) $ 0.06 $ (0.17) First Second Third Fourth 2019 Operating Revenues $ 196,669 $ 169,373 $ 171,478 $ 163,864 Operating Income 46,502 9,541 10,475 11,604 Net Income $ 33,368 $ 3,713 $ 3,973 $ 5,018 Earnings Per Share: Basic $ 0.71 $ 0.08 $ 0.08 $ 0.11 Diluted $ 0.71 $ 0.08 $ 0.08 $ 0.10 |
COMPANY BACKGROUND (Details)
COMPANY BACKGROUND (Details) $ / shares in Units, $ in Thousands | Jun. 27, 2020aircraft | Jun. 26, 2020aircraft | Dec. 13, 2019USD ($)item$ / sharesshares | Jun. 30, 2021$ / sharesshares | Jun. 30, 2020item | Jun. 30, 2021aircraft$ / sharesshares | Jun. 30, 2020aircraftshares | Dec. 31, 2020USD ($)aircraft$ / sharesshares | Dec. 31, 2019$ / sharesshares | Jan. 31, 2020$ / sharesshares | Jan. 30, 2020$ / shares | Apr. 11, 2018$ / shares |
Outstanding shares | 40,005,885 | |||||||||||
Additions | aircraft | 8 | 16 | 21 | |||||||||
Warrants issued | 9,482,606 | |||||||||||
Exercise price (in dollars per share) | $ / shares | $ 0.0005 | $ 0.0005 | ||||||||||
Common stock-par value (in dollars per share) | $ / shares | $ 0.01 | $ 0.01 | $ 0.01 | $ 0 | $ 0 | |||||||
Apollo | ||||||||||||
Outstanding shares | 40,005,885 | |||||||||||
Exercise price (in dollars per share) | $ / shares | $ 0.0005 | |||||||||||
Common stock-par value (in dollars per share) | $ / shares | $ 0.01 | |||||||||||
Amazon Agreement | ||||||||||||
Term of agreement | 6 years | 2 years | ||||||||||
Number of extension option | item | 2 | 2 | ||||||||||
Term of agreement | 2 years | 180 days | ||||||||||
Threshold term of agreement | 10 years | |||||||||||
Additions | aircraft | 2 | |||||||||||
Number of aircrafts operated | aircraft | 12 | 10 | ||||||||||
Warrants issued | 9,482,606 | 9,482,606 | ||||||||||
Exercise price (in dollars per share) | $ / shares | $ 15.17 | $ 15.17 | ||||||||||
Percentage of common stock issued | 15.00% | |||||||||||
Value of warrants (in dollars per share) | $ / shares | $ 7.38 | |||||||||||
Warrants vested | 632,183 | 189,652 | 379,304 | 0 | 632,183 | |||||||
Number of warrants that vest on achievement of each milestone | 63,217 | 63,217 | ||||||||||
Milestone achievement for warrants to vest | $ | $ 8,000 | $ 8,000 | ||||||||||
Cumulative warrants vested | 1,264,356 | 1,264,356 | 252,869 | |||||||||
Amazon Agreement | Cargo | ||||||||||||
Additions | aircraft | 12 | |||||||||||
MN Airlines, LLC | ||||||||||||
Equity acquired (as a percent) | 100.00% |
BASIS OF PRESENTATION AND SUM_3
BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Accounts Receivable (Details) - USD ($) $ in Thousands | Dec. 31, 2018 | Apr. 11, 2018 | Apr. 10, 2018 | Apr. 10, 2018 | Mar. 31, 2018 | Dec. 31, 2020 | Dec. 31, 2019 | Jun. 30, 2021 |
Accounts Receivable | ||||||||
Accounts Receivable | $ 28,690 | $ 22,408 | $ 25,989 | |||||
Accounts receivable write offs | $ 0 | $ 0 | $ 0 | $ 0 | $ 0 | 982 | 343 | |
Aircraft Lessors Related to Maintenance Deposits | ||||||||
Accounts Receivable | ||||||||
Accounts Receivable | $ 2,178 | $ 5,862 |
BASIS OF PRESENTATION AND SUM_4
BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Inventory (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | 12 Months Ended | |
Apr. 10, 2018 | Dec. 31, 2018 | Dec. 31, 2020 | Dec. 31, 2019 | |
PROPERTY & EQUIPMENT | ||||
Estimated residual value (as a percent) | 10.00% | |||
Parts Related to Flight Equipment | ||||
PROPERTY & EQUIPMENT | ||||
Depreciation expense | $ 92 | $ 308 | $ 481 | $ 426 |
BASIS OF PRESENTATION AND SUM_5
BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Property and Equipment (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | 12 Months Ended | |
Apr. 10, 2018 | Dec. 31, 2018 | Dec. 31, 2020 | Dec. 31, 2019 | |
PROPERTY & EQUIPMENT | ||||
Impairment of its long-lived assets | $ 0 | $ 0 | $ 0 | $ 0 |
Airframes | Minimum | ||||
PROPERTY & EQUIPMENT | ||||
Estimated useful life | 10 years | |||
Airframes | Maximum | ||||
PROPERTY & EQUIPMENT | ||||
Estimated useful life | 25 years | |||
Engines - Core | Minimum | ||||
PROPERTY & EQUIPMENT | ||||
Estimated useful life | 7 years | |||
Engines - Core | Maximum | ||||
PROPERTY & EQUIPMENT | ||||
Estimated useful life | 12 years | |||
Leasehold Improvements and Ground Equipment | Minimum | ||||
PROPERTY & EQUIPMENT | ||||
Estimated useful life | 3 years | |||
Leasehold Improvements and Ground Equipment | Maximum | ||||
PROPERTY & EQUIPMENT | ||||
Estimated useful life | 25 years | |||
Office and Ground Equipment | Minimum | ||||
PROPERTY & EQUIPMENT | ||||
Estimated useful life | 5 years | |||
Office and Ground Equipment | Maximum | ||||
PROPERTY & EQUIPMENT | ||||
Estimated useful life | 7 years | |||
Computer Hardware and Software | Minimum | ||||
PROPERTY & EQUIPMENT | ||||
Estimated useful life | 3 years | |||
Computer Hardware and Software | Maximum | ||||
PROPERTY & EQUIPMENT | ||||
Estimated useful life | 5 years | |||
Finance Lease Assets | Minimum | ||||
PROPERTY & EQUIPMENT | ||||
Estimated useful life | 3 years | |||
Finance Lease Assets | Maximum | ||||
PROPERTY & EQUIPMENT | ||||
Estimated useful life | 25 years | |||
Rotable Parts | Minimum | ||||
PROPERTY & EQUIPMENT | ||||
Estimated useful life | 6 years | |||
Rotable Parts | Maximum | ||||
PROPERTY & EQUIPMENT | ||||
Estimated useful life | 16 years |
BASIS OF PRESENTATION AND SUM_6
BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Stockholders' Equity (Details) - USD ($) $ / shares in Units, $ in Thousands | Jan. 31, 2020 | Dec. 31, 2018 | Jun. 30, 2021 | Dec. 31, 2020 | Jan. 30, 2020 | Dec. 31, 2019 | Apr. 11, 2018 |
Stockholders' Equity | |||||||
Common stock-shares issued | 57,158,467 | 46,839,659 | 6,800,065 | 5,326,755 | |||
Common stock-par value (in dollars per share) | $ 0.01 | $ 0.01 | $ 0 | $ 0 | |||
Exercise price (in dollars per share) | $ 0.0005 | $ 0.0005 | |||||
Initial Public Offering Expense Adjustment (in shares) | 1,416,645 | ||||||
Loans to Stockholders | $ 3,500 | $ 3,500 | $ 3,500 | ||||
Apollo | |||||||
Stockholders' Equity | |||||||
Common stock-par value (in dollars per share) | $ 0.01 | ||||||
Warrants issued (in shares) | 40,005,885 | ||||||
Exercise price (in dollars per share) | $ 0.0005 | ||||||
Exercise of Apollo Warrants (in shares) | 40,005,885 | ||||||
Amazon | |||||||
Stockholders' Equity | |||||||
Warrants issued (in shares) | 885,052 | ||||||
Exercise price (in dollars per share) | $ 15.17 |
BASIS OF PRESENTATION AND SUM_7
BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Deferred Offering Costs (Details) - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
BASIS OF PRESENTATION | ||
Deferred offering costs | $ 4,552 | $ 2,268 |
BASIS OF PRESENTATION AND SUM_8
BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Goodwill and Other Intangible Assets (Details) | 12 Months Ended |
Dec. 31, 2020aircraftsegment | |
Goodwill and Other Intangible Assets | |
Number of reporting units | segment | 2 |
Cargo | |
Goodwill and Other Intangible Assets | |
Number of aircrafts operated | aircraft | 12 |
BASIS OF PRESENTATION AND SUM_9
BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Revenue Recognition (Details) | 12 Months Ended |
Dec. 31, 2020item | |
Revenue Recognition | |
Travel credit redemption period | 12 months |
Co-branded Credit Card Program | |
Revenue Recognition | |
Performance obligations | 2 |
Amazon Agreement | |
Revenue Recognition | |
Performance obligations | 3 |
BASIS OF PRESENTATION AND SU_10
BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Concentration Risk (Details) - employee | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
ALPA | |||
Concentration Risk | |||
Number of Active Employees Represented | 395 | ||
IBT | |||
Concentration Risk | |||
Number of Active Employees Represented | 466 | ||
TWU | |||
Concentration Risk | |||
Number of Active Employees Represented | 22 | ||
Accounts Receivable | Customer Concentration Risk | Amazon | |||
Concentration Risk | |||
Percentage of concentration risk | 41.00% | ||
Accounts Receivable | Customer Concentration Risk | Major Financial Credit Card Institutions | |||
Concentration Risk | |||
Percentage of concentration risk | 8.00% | 19.00% | |
Accounts Receivable | Customer Concentration Risk | One Financial Institution | |||
Concentration Risk | |||
Percentage of concentration risk | 5.00% | 16.00% | |
Fuel Purchases | Supplier Concentration Risk | Two Vendors | |||
Concentration Risk | |||
Percentage of concentration risk | 57.00% | 58.00% | 48.00% |
Workforce Under Union Contracts | Unionized Employees Concentration Risk | |||
Concentration Risk | |||
Percentage of concentration risk | 52.00% | ||
Workforce Under Union Contracts with Expiring Contracts | Unionized Employees Concentration Risk | |||
Concentration Risk | |||
Percentage of concentration risk | 98.00% |
BASIS OF PRESENTATION AND SU_11
BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Recently Adopted Accounting Standards (Details) - USD ($) $ in Thousands | Jun. 30, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 |
Recently Adopted Accounting Standards | ||||
Retained Earnings (Accumulated Deficit) | $ (12,707) | $ 38,324 | $ 42,228 | |
Operating lease assets | 70,715 | 121,269 | 147,148 | |
Operating Lease Right-of-use Liability | 142,421 | |||
Over-market Liabilities | $ 12,583 | $ 28,128 | $ 37,409 | |
Cumulative Effect of New ASU | ASU 2014-09 | ||||
Recently Adopted Accounting Standards | ||||
Retained Earnings (Accumulated Deficit) | $ (3,477) | |||
Cumulative Effect of New ASU | ASU 2016-02 | ||||
Recently Adopted Accounting Standards | ||||
Operating lease assets | 178,577 | |||
Operating Lease Right-of-use Liability | 204,790 | |||
Over-market Liabilities | 27,004 | |||
Prepaid rent | 791 | |||
Cumulative Effect of New ASU | ASU 2018-15 | ||||
Recently Adopted Accounting Standards | ||||
Hosting agreement capitalized costs | $ 2,167 |
IMPACT OF THE COVID19 PANDEMIC
IMPACT OF THE COVID19 PANDEMIC (Details) - USD ($) $ in Thousands | Oct. 26, 2020 | Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2021 | Jun. 30, 2020 | Dec. 31, 2020 |
IMPACT OF THE COVID19 PANDEMIC | ||||||
Grants recognized | $ 39,378 | $ 31,516 | $ 71,587 | $ 31,516 | $ 62,312 | |
Impairment charges | 0 | |||||
U. S. Department of the Treasury CARES Act Loan | ||||||
IMPACT OF THE COVID19 PANDEMIC | ||||||
Grants recognized | 62,312 | |||||
Loan received | $ 45,000 | $ 45,000 |
IMPACT OF THE COVID19 PANDEMI_2
IMPACT OF THE COVID19 PANDEMIC - CARES Act (Details) - USD ($) $ in Thousands | 1 Months Ended | 3 Months Ended | 6 Months Ended | 12 Months Ended | |||||||
Sep. 30, 2020 | Aug. 31, 2020 | Jul. 31, 2020 | Jun. 30, 2020 | Apr. 30, 2020 | Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2021 | Jun. 30, 2020 | Dec. 31, 2020 | Apr. 15, 2020 | |
Unusual or Infrequent Item, or Both [Line Items] | |||||||||||
Grants recognized | $ 39,378 | $ 31,516 | $ 71,587 | $ 31,516 | $ 62,312 | ||||||
CARES Act Payroll Support Program | |||||||||||
Unusual or Infrequent Item, or Both [Line Items] | |||||||||||
Grants receivable | $ 60,559 | ||||||||||
Amount of grant received | $ 10,093 | $ 10,093 | $ 10,093 | $ 10,093 | $ 20,187 | ||||||
Additional CARES Act grant | |||||||||||
Unusual or Infrequent Item, or Both [Line Items] | |||||||||||
Grants recognized | $ 1,753 |
IMPACT OF THE COVID19 PANDEMI_3
IMPACT OF THE COVID19 PANDEMIC - CARES Employee Retention Credit (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | 12 Months Ended | |
Jun. 30, 2021 | Mar. 31, 2021 | Jun. 30, 2021 | Dec. 31, 2020 | |
IMPACT OF THE COVID19 PANDEMIC | ||||
Maximum Cares Act Employee retention credit per employee | $ 5 | |||
Retention credit as a percentage of qualified wages paid to employees | 50.00% | |||
Maximum qualified annual wages | $ 10 | |||
CARES Act employee retention credit | $ 446 | $ 334 | $ 780 | $ 2,328 |
Percentage of deferred payment of the employer portion of social security taxes due December 31, 2021 | 50.00% | |||
Percentage of deferred payment of the employer portion of social security taxes due December 31, 2022 | 50.00% | |||
Amount deferred for employer portion of social security taxes | $ 4,138 | |||
Amount deferred for employer portion of social security taxes, current | 2,069 | |||
Amount deferred for employer portion of social security taxes, noncurrent | $ 2,069 |
IMPACT OF THE COVID19 PANDEMI_4
IMPACT OF THE COVID19 PANDEMIC - CARES Act Loan Program (Details) - USD ($) $ in Thousands | Oct. 26, 2020 | Dec. 31, 2020 |
U. S. Department of the Treasury CARES Act Loan | ||
Unusual or Infrequent Item, or Both [Line Items] | ||
Loan received | $ 45,000 | $ 45,000 |
IMPACT OF THE COVID19 PANDEMI_5
IMPACT OF THE COVID19 PANDEMIC - United States Department of the Treasury (Details) - USD ($) $ in Thousands | Feb. 02, 2021 | Mar. 31, 2021 | Jan. 22, 2021 |
Forecast | |||
Unusual or Infrequent Item, or Both [Line Items] | |||
Amount of grant received | $ 16,104 | ||
Subsequent Event | |||
Unusual or Infrequent Item, or Both [Line Items] | |||
Amount of grant received | $ 16,104 | ||
Payroll Support Program Extension | Subsequent Event | |||
Unusual or Infrequent Item, or Both [Line Items] | |||
Grants receivable | $ 32,208 |
BUSINESS COMBINATION - (Details
BUSINESS COMBINATION - (Details) - USD ($) $ in Thousands | Apr. 11, 2018 | Jun. 30, 2021 | Dec. 31, 2020 | Dec. 31, 2019 |
Assets: | ||||
Goodwill | $ 222,223 | $ 222,223 | $ 222,223 | |
MN Airlines, LLC | ||||
BUSINESS COMBINATION | ||||
Equity acquired (as a percent) | 100.00% | |||
Sale agreement amount | $ 187,775 | |||
Assets: | ||||
Restricted Cash | 8,308 | |||
Investments | 3,810 | |||
Accounts Receivable | 31,796 | |||
Inventory | 5,295 | |||
Prepaid Expenses | 7,617 | |||
Property and Equipment | 38,511 | |||
Goodwill | 222,223 | |||
Other Intangible Assets | 104,000 | |||
Aircraft Lease Deposits | 17,923 | |||
Deferred Tax Asset | 49,634 | |||
Other Assets | 1,071 | |||
Total Assets | 490,188 | |||
Liabilities: | ||||
Accounts Payable | 50,016 | |||
Accrued Salaries, Wages, and Benefits | 9,006 | |||
Accrued Transportation Taxes | 12,237 | |||
Air Traffic Liabilities | 72,235 | |||
Over-market Liabilities | 108,017 | |||
Finance Lease Obligations | 10,038 | |||
Loyalty Program Liabilities | 37,165 | |||
Long-term Debt | 941 | |||
Other Liabilities | 2,758 | |||
Total Liabilities | 302,413 | |||
Total Purchase Price | 187,775 | |||
Other disclosures | ||||
Tax deductible goodwill | 132,606 | |||
Unfavorable lease obligations | 32,779 | |||
Over-market maintenance service liability | 75,238 | |||
MN Airlines, LLC | Customer Relationships | ||||
Assets: | ||||
Other Intangible Assets | $ 48,000 | |||
Other disclosures | ||||
Useful life | 12 years | |||
MN Airlines, LLC | Trademarks | ||||
Assets: | ||||
Other Intangible Assets | $ 56,000 |
REVENUE - Disaggregation of Ope
REVENUE - Disaggregation of Operating Revenue (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | 9 Months Ended | 12 Months Ended | |||||||||||
Jun. 30, 2021 | Dec. 31, 2020 | Sep. 30, 2020 | Jun. 30, 2020 | Mar. 31, 2020 | Dec. 31, 2019 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Apr. 10, 2018 | Jun. 30, 2021 | Jun. 30, 2020 | Dec. 31, 2018 | Dec. 31, 2020 | Dec. 31, 2019 | |
REVENUE | |||||||||||||||
Financial Designation, Predecessor and Successor [Fixed List] | Predecessor | Successor | |||||||||||||
Operating Revenues | $ 149,189 | $ 107,807 | $ 77,973 | $ 35,376 | $ 180,330 | $ 163,864 | $ 171,478 | $ 169,373 | $ 196,669 | $ 197,452 | $ 276,802 | $ 215,706 | $ 384,931 | $ 401,486 | $ 701,384 |
Domestic | |||||||||||||||
REVENUE | |||||||||||||||
Operating Revenues | 142,774 | 34,307 | 173,995 | 262,020 | 197,345 | 368,456 | 382,463 | 666,332 | |||||||
Latin America | |||||||||||||||
REVENUE | |||||||||||||||
Operating Revenues | 6,266 | 1,038 | 23,003 | 14,228 | 18,114 | 15,628 | 18,515 | 33,716 | |||||||
Other | |||||||||||||||
REVENUE | |||||||||||||||
Operating Revenues | 149 | 31 | 454 | 554 | 247 | 847 | 508 | 1,336 | |||||||
Passenger | |||||||||||||||
REVENUE | |||||||||||||||
Operating Revenues | 125,130 | 31,341 | 172,897 | 229,325 | 209,827 | 335,824 | 359,232 | 688,833 | |||||||
Scheduled service | |||||||||||||||
REVENUE | |||||||||||||||
Operating Revenues | 67,073 | 17,882 | 132,234 | 121,693 | 132,110 | 224,507 | 193,047 | 396,113 | |||||||
Charter service | |||||||||||||||
REVENUE | |||||||||||||||
Operating Revenues | 28,898 | 8,491 | 40,663 | 54,703 | 37,718 | 111,317 | 98,130 | 174,562 | |||||||
Ancillary | |||||||||||||||
REVENUE | |||||||||||||||
Operating Revenues | 29,159 | 4,968 | 52,929 | 39,999 | 68,055 | 118,158 | |||||||||
Cargo | |||||||||||||||
REVENUE | |||||||||||||||
Operating Revenues | 22,098 | 3,219 | 43,684 | 3,219 | 36,809 | ||||||||||
Ancillary | |||||||||||||||
REVENUE | |||||||||||||||
Operating Revenues | 15,670 | 41,065 | |||||||||||||
Other | |||||||||||||||
REVENUE | |||||||||||||||
Operating Revenues | 8,885 | 8,042 | |||||||||||||
Other | |||||||||||||||
REVENUE | |||||||||||||||
Operating Revenues | $ 1,961 | $ 816 | $ 24,555 | $ 3,793 | $ 2,660 | $ 49,107 | $ 5,445 | $ 12,551 |
REVENUE - Contract Balances (De
REVENUE - Contract Balances (Details) $ in Thousands | 3 Months Ended | 6 Months Ended | 9 Months Ended | 12 Months Ended | ||||
Jun. 30, 2021USD ($) | Jun. 30, 2020USD ($) | Apr. 10, 2018USD ($) | Jun. 30, 2021USD ($)aircraft | Jun. 30, 2020USD ($) | Dec. 31, 2018USD ($) | Dec. 31, 2020USD ($)aircraft | Dec. 31, 2019USD ($) | |
REVENUE | ||||||||
Maintenance expense | $ 11,300 | $ 2,426 | $ 9,508 | $ 20,510 | $ 8,904 | $ 15,491 | $ 27,416 | $ 35,286 |
Total Contract Liabilities | 139,420 | 139,420 | 128,384 | 141,185 | ||||
Air Traffic Liabilities | ||||||||
REVENUE | ||||||||
Total Contract Liabilities | 113,771 | $ 113,771 | $ 101,075 | 116,660 | ||||
Threshold period in which tickets can be booked in advance | 12 months | 12 months | ||||||
Cash refund to customers | 4,502 | |||||||
Customer liability outstanding | $ 1,045 | |||||||
Gift certificates | 245 | |||||||
Loyalty Program Liabilities | ||||||||
REVENUE | ||||||||
Total Contract Liabilities | 20,877 | $ 22,118 | $ 20,877 | 22,118 | $ 23,950 | 22,069 | 22,892 | |
Revenue recognized | 3,096 | $ 3,395 | 4,838 | 12,408 | ||||
Amazon Deferred Up-front Payment | ||||||||
REVENUE | ||||||||
Total Contract Liabilities | 4,772 | $ 4,772 | 5,240 | $ 1,633 | ||||
Revenue recognized | $ 393 | |||||||
Costs to fulfill contract with Amazon | ||||||||
REVENUE | ||||||||
Number of cargo aircraft | aircraft | 12 | 12 | ||||||
Maintenance expense | 169 | $ 307 | $ 271 | |||||
Contract Assets | $ 3,203 | 3,203 | 3,614 | |||||
Passenger | Air Traffic Liabilities | ||||||||
REVENUE | ||||||||
Revenue recognized | $ 82,206 | $ 110,868 |
REVENUE (Details)
REVENUE (Details) - Amazon Deferred Up-front Payment - USD ($) $ in Thousands | Dec. 13, 2019 | Dec. 31, 2019 | Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2021 | Jun. 30, 2020 | Dec. 31, 2020 | Dec. 31, 2019 |
REVENUE | ||||||||
Proceeds from startup costs | $ 10,300 | $ 6,300 | ||||||
Warrants vested | 632,183 | 632,183 | ||||||
Fair value of warrants vested | $ 4,667 | 4,667 | ||||||
Remaining start up costs | $ 5,633 | $ 5,633 | ||||||
Revenue recognized | $ 393 | |||||||
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2019-12-01 | ||||||||
REVENUE | ||||||||
Amortization period | 6 years | 6 years | ||||||
Cargo | ||||||||
REVENUE | ||||||||
Revenue recognized | $ 237 | $ 38 | $ 468 | $ 38 |
REVENUE - Loyalty Program (Deta
REVENUE - Loyalty Program (Details) - USD ($) $ in Thousands | 6 Months Ended | 12 Months Ended | ||
Jun. 30, 2021 | Jun. 30, 2020 | Dec. 31, 2020 | Dec. 31, 2019 | |
Changes in the Loyalty Program Liabilities | ||||
Balance - January 1 | $ 128,384 | $ 141,185 | $ 141,185 | |
Balance - June 30 | 139,420 | 128,384 | $ 141,185 | |
Loyalty Program Liabilities | ||||
Changes in the Loyalty Program Liabilities | ||||
Balance - January 1 | 22,069 | 22,892 | 22,892 | 23,950 |
Loyalty Points Earned | 4,015 | 6,483 | ||
Loyalty Points Redeemed | (3,096) | (3,395) | (4,838) | (12,408) |
Balance - June 30 | $ 20,877 | 22,118 | $ 22,069 | 22,892 |
Loyalty points redemption period | 2 years | 2 years | ||
Loyalty Program Liabilities | Cumulative Effect of New ASU | ||||
Changes in the Loyalty Program Liabilities | ||||
Balance - January 1 | 4,867 | |||
Loyalty Program Liabilities | Adjusted Balance | ||||
Changes in the Loyalty Program Liabilities | ||||
Balance - January 1 | $ 22,892 | $ 22,892 | 28,817 | |
Balance - June 30 | $ 22,892 |
EARNINGS PER SHARE - Computatio
EARNINGS PER SHARE - Computation of basic and diluted earnings (Details) - USD ($) $ / shares in Units, $ in Thousands | Jan. 30, 2020 | Jun. 30, 2021 | Mar. 31, 2021 | Dec. 31, 2020 | Sep. 30, 2020 | Jun. 30, 2020 | Mar. 31, 2020 | Dec. 31, 2019 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Apr. 10, 2018 | Jun. 30, 2021 | Jun. 30, 2020 | Dec. 31, 2018 | Dec. 31, 2020 | Dec. 31, 2019 |
Numerator: | |||||||||||||||||
Net Income (Loss) | $ 51,753 | $ 12,416 | $ (8,042) | $ 2,927 | $ (6,040) | $ 7,251 | $ 5,018 | $ 3,973 | $ 3,713 | $ 33,368 | $ 25,910 | $ 64,169 | $ 1,211 | $ (367) | $ (3,904) | $ 46,072 | |
Denominator: | |||||||||||||||||
Weighted Average Common Shares Outstanding - Basic | 57,156,159 | 46,805,950 | 100,000,000 | 52,850,041 | 46,805,950 | 46,700,990 | 46,806,042 | 46,773,038 | |||||||||
Dilutive effect of Stock Options and Warrants | 4,826,282 | 4,553,552 | 1,437,196 | 1,136,375 | |||||||||||||
Weighted Average Common Shares Outstanding - Diluted | 61,982,441 | 46,805,950 | 100,000,000 | 57,403,593 | 48,243,146 | 46,700,990 | 46,806,042 | 47,909,413 | |||||||||
Basic | $ 0.91 | $ (0.17) | $ 0.06 | $ (0.13) | $ 0.16 | $ 0.11 | $ 0.08 | $ 0.08 | $ 0.71 | $ 0.26 | $ 1.21 | $ 0.03 | $ (0.01) | $ (0.08) | $ 0.99 | ||
Diluted | $ 0.83 | $ (0.17) | $ 0.06 | $ (0.13) | $ 0.15 | $ 0.10 | $ 0.08 | $ 0.08 | $ 0.71 | $ 0.26 | $ 1.12 | $ 0.02 | $ (0.01) | $ (0.08) | $ 0.96 | ||
Warrents held | 40,005,885 |
EARNINGS PER SHARE (Details)
EARNINGS PER SHARE (Details) - $ / shares | Jan. 30, 2020 | Jun. 30, 2021 | Dec. 31, 2020 | Jun. 30, 2020 | Jan. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | Apr. 11, 2018 |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||||||
Outstanding shares | 40,005,885 | |||||||
Warrents held | 40,005,885 | |||||||
Exercise price (in dollars per share) | $ 0.0005 | $ 0.0005 | ||||||
Apollo | ||||||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||||||
Outstanding shares | 40,005,885 | |||||||
Exercise price (in dollars per share) | $ 0.0005 | |||||||
Amazon | ||||||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||||||
Exercise price (in dollars per share) | $ 15.17 | |||||||
Performance-based stock options | ||||||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||||||
Outstanding shares | 3,547,524 | 3,577,252 | 3,636,773 | 3,502,925 | 3,583,923 | |||
Percentage Of Stock Options Expected To Meet Performance Conditions | 75.00% |
PROPERTY & EQUIPMENT - Aircraft
PROPERTY & EQUIPMENT - Aircraft fleet (Details) $ in Thousands | 1 Months Ended | 3 Months Ended | 6 Months Ended | 9 Months Ended | 12 Months Ended | |||||||||
Apr. 30, 2021aircraft | Mar. 31, 2021aircraft | Jan. 31, 2020aircraft | Dec. 31, 2019USD ($)aircraft | Aug. 31, 2019aircraft | Feb. 28, 2019aircraft | Jun. 30, 2021USD ($)aircraft | Jun. 30, 2020USD ($)aircraft | Apr. 10, 2018USD ($) | Jun. 30, 2021USD ($)aircraft | Jun. 30, 2020USD ($)aircraft | Dec. 31, 2018USD ($)aircraft | Dec. 31, 2020USD ($)aircraft | Dec. 31, 2019USD ($)aircraft | |
PROPERTY & EQUIPMENT | ||||||||||||||
Balance at beginning of period | 31 | 43 | 31 | 31 | ||||||||||
Additions | 8 | 16 | 21 | |||||||||||
Removals | (6) | (9) | (9) | |||||||||||
Balance at end of period | 31 | 45 | 38 | 45 | 38 | 43 | 31 | |||||||
Number of aircrafts previously under operating leases | 1 | 5 | 6 | 2 | ||||||||||
Amortization expense | $ | $ 119 | $ 4,475 | $ 11,948 | $ 13,104 | ||||||||||
Passenger | ||||||||||||||
PROPERTY & EQUIPMENT | ||||||||||||||
Balance at beginning of period | 31 | 31 | 31 | 31 | 30 | |||||||||
Additions | 8 | 9 | 9 | 9 | ||||||||||
Removals | (6) | (9) | (9) | (8) | ||||||||||
Balance at end of period | 31 | 33 | 31 | 33 | 31 | 30 | 31 | 31 | ||||||
Number of new aircrafts purchased | 2 | 2 | ||||||||||||
Number of aircrafts refinanced | 3 | |||||||||||||
Passenger | Owned | ||||||||||||||
PROPERTY & EQUIPMENT | ||||||||||||||
Balance at beginning of period | 5 | 14 | 5 | 5 | 3 | |||||||||
Additions | 6 | 9 | 9 | 2 | ||||||||||
Balance at end of period | 5 | 20 | 14 | 20 | 14 | 3 | 14 | 5 | ||||||
Number of aircrafts previously under operating leases | 6 | 2 | ||||||||||||
Number of aircrafts previously under finance leases | 5 | |||||||||||||
Accumulated depreciation on owned assets | $ | $ 21,030 | $ 67,495 | $ 67,495 | $ 52,048 | $ 21,030 | |||||||||
Depreciation expense | $ | $ 9,642 | $ 6,370 | 2,315 | $ 18,442 | $ 11,491 | $ 6,731 | $ 31,657 | $ 17,347 | ||||||
Passenger | Finance leases | ||||||||||||||
PROPERTY & EQUIPMENT | ||||||||||||||
Balance at beginning of period | 10 | 5 | 10 | 10 | 5 | |||||||||
Additions | 2 | 5 | ||||||||||||
Removals | (5) | (5) | ||||||||||||
Balance at end of period | 10 | 7 | 5 | 7 | 5 | 5 | 5 | 10 | ||||||
Number of aircrafts previously under finance leases | 5 | |||||||||||||
Accumulated amortization on finance lease assets | $ | $ 6,698 | $ 21,209 | $ 21,209 | $ 13,018 | $ 6,698 | |||||||||
Amortization expense | $ | $ 2,692 | $ 4,665 | $ 119 | $ 5,384 | $ 8,955 | $ 4,476 | $ 11,948 | $ 13,104 | ||||||
Passenger | Operating leases | ||||||||||||||
PROPERTY & EQUIPMENT | ||||||||||||||
Balance at beginning of period | 14 | 12 | 14 | 14 | 19 | |||||||||
Removals | (6) | (2) | (2) | (5) | ||||||||||
Balance at end of period | 14 | 6 | 12 | 6 | 12 | 19 | 12 | 14 | ||||||
Number of aircrafts previously under operating leases | 1 | |||||||||||||
Number of operating lease agreements expired | 2 | 1 | ||||||||||||
Passenger | Seasonal leases | ||||||||||||||
PROPERTY & EQUIPMENT | ||||||||||||||
Balance at beginning of period | 2 | 2 | 2 | 3 | ||||||||||
Additions | 2 | |||||||||||||
Removals | (2) | (2) | (3) | |||||||||||
Balance at end of period | 2 | 3 | 2 | |||||||||||
Cargo | Aircraft Operated for Amazon | ||||||||||||||
PROPERTY & EQUIPMENT | ||||||||||||||
Balance at beginning of period | 12 | |||||||||||||
Additions | 7 | 12 | ||||||||||||
Balance at end of period | 12 | 7 | 12 | 7 | 12 |
GOODWILL AND OTHER INTANGIBLE_3
GOODWILL AND OTHER INTANGIBLE ASSETS - Components (Details) - USD ($) $ in Thousands | Jun. 30, 2021 | Dec. 31, 2020 | Dec. 31, 2019 |
Finite-Lived Intangible Assets [Line Items] | |||
Goodwill | $ 222,223 | $ 222,223 | $ 222,223 |
Intangible Assets with Finite Lives | |||
Gross Carrying Amount | 48,000 | 48,000 | |
Accumulated Amortization | (10,890) | (6,890) | |
Net Carrying Value | 37,110 | 41,110 | |
Total Other Intangible Assets | |||
Gross Carrying Amount | 104,000 | 104,000 | |
Total Other Intangible Assets | $ 91,110 | 93,110 | 97,110 |
Total Goodwill and Other Intangible Assets Gross | 326,223 | 326,223 | |
Total Goodwill and Other Intangible Assets | 315,333 | 319,333 | |
Tradename | |||
Intangible Assets with Indefinite Lives: | |||
Intangible Assets with Indefinite Lives | $ 56,000 | $ 56,000 |
GOODWILL AND OTHER INTANGIBLE_4
GOODWILL AND OTHER INTANGIBLE ASSETS - Additional Information (Details) - USD ($) $ in Thousands | 9 Months Ended | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2020 | Dec. 31, 2019 | |
GOODWILL AND OTHER INTANGIBLE ASSETS | |||
Assets estimated life | 12 years | ||
Amortization expense | $ 2,890 | $ 4,000 | $ 4,000 |
Annual amortization expense fiscal year maturity | |||
Next twelve months | 4,000 | ||
2021 | 4,000 | ||
2022 | 4,000 | ||
2023 | 4,000 | ||
2024 | 4,000 | ||
thereafter | $ 17,110 |
DEBT - Lines of Credit (Details
DEBT - Lines of Credit (Details) $ in Thousands | Apr. 06, 2021aircraft | Feb. 10, 2021USD ($) | May 15, 2020USD ($) | Apr. 30, 2021aircraft | Mar. 31, 2021USD ($)aircraft | Mar. 31, 2022USD ($) | Jun. 30, 2021USD ($)aircraft | Dec. 31, 2021USD ($) | Dec. 31, 2020USD ($)aircraft | Dec. 31, 2019USD ($) | Dec. 31, 2018USD ($) |
DEBT | |||||||||||
Maximum borrowing capacity | $ 25,000 | $ 20,000 | |||||||||
Extension term of maturity | 1 year | ||||||||||
Letters of Credit Outstanding, Amount | $ 0 | ||||||||||
Line of Credit Facility, Remaining Borrowing Capacity | $ 25,000 | $ 19,650 | |||||||||
Commitment fee on unused facility (as a percent) | 0.50% | ||||||||||
Number of aircrafts previously under operating leases | aircraft | 1 | 5 | 6 | 2 | |||||||
Minimum | |||||||||||
DEBT | |||||||||||
Maximum borrowing capacity | $ 20,000 | ||||||||||
Maximum | |||||||||||
DEBT | |||||||||||
Maximum borrowing capacity | $ 25,000 | ||||||||||
Fed Funds Effective Rate Overnight Index Swap Rate [Member] | |||||||||||
DEBT | |||||||||||
Derivative, Basis Spread on Variable Rate | 0.50% | ||||||||||
Adjusted LIBOR Rate | |||||||||||
DEBT | |||||||||||
Derivative, Basis Spread on Variable Rate | 1.00% | ||||||||||
Prior revolving credit agreement | |||||||||||
DEBT | |||||||||||
Maximum borrowing capacity | $ 25,000 | ||||||||||
Credit Facilities | |||||||||||
DEBT | |||||||||||
Term of debt | 5 years | ||||||||||
Minimum liquidity required to be maintained | $ 30,000 | $ 30,000 | |||||||||
Credit Facilities | Minimum | |||||||||||
DEBT | |||||||||||
Minimum EBITDAR required to be maintained | 62,100 | $ 62,100 | |||||||||
Credit Facilities | Maximum | |||||||||||
DEBT | |||||||||||
Minimum EBITDAR required to be maintained | 87,700 | ||||||||||
Credit Facilities | Subsequent Event | Minimum | |||||||||||
DEBT | |||||||||||
Minimum EBITDAR required to be maintained | $ 87,700 | $ 78,100 | |||||||||
Credit Facilities | Base rate | |||||||||||
DEBT | |||||||||||
Minimum interest rate | 2.00% | ||||||||||
Credit Facilities | Base rate | Minimum | |||||||||||
DEBT | |||||||||||
Margin (as a percent) | 4.00% | ||||||||||
Credit Facilities | Base rate | Maximum | |||||||||||
DEBT | |||||||||||
Margin (as a percent) | 5.00% | ||||||||||
Revolving Credit Facility | |||||||||||
DEBT | |||||||||||
Maximum borrowing capacity | $ 25,000 | ||||||||||
Commitment fee on unused facility (as a percent) | 0.50% | ||||||||||
Amount drawn | $ 0 | $ 0 | |||||||||
Delayed Draw Term Loan Facility | |||||||||||
DEBT | |||||||||||
Maximum borrowing capacity | $ 90,000 | ||||||||||
Amount drawn | $ 79,494 | ||||||||||
Number of aircrafts previously under operating leases | aircraft | 6 | ||||||||||
Delayed Draw Term Loan Facility | Subsequent Event | |||||||||||
DEBT | |||||||||||
Amount drawn | $ 68,000 | ||||||||||
Number of aircrafts previously under operating leases | aircraft | 5 | 5 |
DEBT - Long-term Debt (Details)
DEBT - Long-term Debt (Details) $ in Thousands | Mar. 24, 2021USD ($) | Oct. 26, 2020USD ($) | Dec. 31, 2019USD ($)aircraft | Jun. 30, 2020aircraft | Mar. 31, 2020aircraft | Jun. 30, 2021USD ($)aircraft | Jun. 30, 2020aircraft | Dec. 31, 2020USD ($)aircraft | Dec. 31, 2019USD ($) | Dec. 31, 2020USD ($)aircraft |
DEBT | ||||||||||
Number Of Aircrafts Purchased | aircraft | 8 | 16 | 21 | |||||||
Number of previously under operating lease | aircraft | 6 | |||||||||
Appraised value of aircraft purchased | $ 292,450 | $ 292,450 | ||||||||
Threshold Average Liquidity | 10,000 | 10,000 | ||||||||
Accrued Payment In Kind Interest | 419 | 419 | ||||||||
Unamortized Debt Issuance Costs | $ 2,988 | $ 4,113 | 3,338 | $ 2,988 | 3,338 | |||||
Notes payable under the Company's 2019-1 EETC agreement | ||||||||||
DEBT | ||||||||||
Face amount | $ 248,587 | $ 248,587 | $ 248,587 | 248,587 | $ 248,587 | |||||
Number Of Aircrafts Purchased | aircraft | 1 | 2 | ||||||||
Number of previously under operating lease | aircraft | 1 | |||||||||
Number of aircraft refinanced | aircraft | 3 | |||||||||
Number of used aircrafts purchased or refinanced | aircraft | 13 | 13 | ||||||||
Appraised value of aircraft purchased | $ 292,450 | $ 292,450 | ||||||||
ClassA Trust Certificates [Member] | ||||||||||
DEBT | ||||||||||
Tranche Of Seven Aircrafts | 4.13% | |||||||||
Tranche Of Six Aircrafts | 4.25% | |||||||||
Class B Trust Certificates [Member] | ||||||||||
DEBT | ||||||||||
Tranche Of Seven Aircrafts | 4.66% | |||||||||
Tranche Of Six Aircrafts | 4.78% | |||||||||
Class C Trust Certificates [Member] | ||||||||||
DEBT | ||||||||||
Tranche Of Seven Aircrafts | 6.95% | |||||||||
U. S. Department of the Treasury CARES Act Loan | ||||||||||
DEBT | ||||||||||
Face amount | $ 45,000 | |||||||||
Repayment period prior to expiration date of loyalty program | 6 months | |||||||||
Repayment of debt | $ 46,260 | |||||||||
U. S. Department of the Treasury CARES Act Loan | Adjusted LIBOR Rate | ||||||||||
DEBT | ||||||||||
Margin (as a percent) | 6.50% |
DEBT - Long-term Debt schedule
DEBT - Long-term Debt schedule (Details) - USD ($) $ in Thousands | 12 Months Ended | |||
Dec. 31, 2020 | Dec. 31, 2019 | Jun. 30, 2021 | Oct. 26, 2020 | |
DEBT | ||||
Total Debt | $ 285,801 | $ 89,905 | $ 291,592 | |
Less: Unamortized debt issuance costs | (3,338) | (2,988) | (4,113) | |
Less: Current Maturities of Long-term Debt | (26,118) | (13,197) | (19,795) | |
Total Long-term Debt | 256,345 | 73,720 | 267,684 | |
Notes payable under the Company's 2019-1 EETC agreement | ||||
DEBT | ||||
Total Debt | 227,347 | 28,280 | 211,605 | |
Face amount | $ 248,587 | $ 248,587 | $ 248,587 | |
Notes payable under the Company's 2019-1 EETC agreement | Minimum | ||||
DEBT | ||||
Interest Rate | 4.13% | 4.13% | 4.13% | |
Notes payable under the Company's 2019-1 EETC agreement | Maximum | ||||
DEBT | ||||
Interest Rate | 6.95% | 6.95% | 6.95% | |
Delayed Draw Term Loan Facility | ||||
DEBT | ||||
Total Debt | $ 79,494 | |||
U. S. Department of the Treasury CARES Act Loan | ||||
DEBT | ||||
Total Debt | $ 45,419 | |||
Face amount | $ 45,000 | |||
Wilmington Trust Company dated October and November 2018 | ||||
DEBT | ||||
Total Debt | $ 46,617 | |||
Face amount | $ 55,671 | |||
Interest Rate | 8.45% | |||
Wilmington Trust Company dated February 2019 | ||||
DEBT | ||||
Total Debt | 9,813 | $ 11,237 | ||
Face amount | $ 12,750 | $ 12,750 | ||
Interest Rate | 8.45% | 8.45% | ||
Original loan amount payable in monthly installments | $ 151 | $ 151 | ||
Final lump sum payment | 2,825 | 2,825 | ||
Wilmington Trust Company dated November 2018 | ||||
DEBT | ||||
Total Debt | 2,693 | 3,105 | ||
Face amount | $ 3,671 | $ 3,671 | ||
Interest Rate | 8.45% | 8.45% | ||
Original loan amount payable in monthly installments | $ 44 | $ 44 | ||
Final lump sum payment | 1,101 | 1,101 | ||
Alliance Bank dated February 2019 | ||||
DEBT | ||||
Total Debt | 519 | 569 | ||
Face amount | $ 600 | $ 600 | ||
Interest Rate | 5.00% | 5.00% | ||
Original loan amount payable in monthly installments | $ 5 | $ 5 | ||
Riverland Bank dated between April 2015 and May 2016 | ||||
DEBT | ||||
Total Debt | 10 | 97 | ||
Face amount | $ 734 | $ 734 | ||
Interest Rate | 5.15% | 5.15% |
DEBT - Future maturities of the
DEBT - Future maturities of the outstanding Debt (Details) - USD ($) $ in Thousands | Jun. 30, 2021 | Dec. 31, 2020 | Dec. 31, 2019 |
Debt Principal Payments | |||
Remaining 2021 | $ 10,661 | ||
2021 | 30,367 | $ 26,928 | |
2022 | 42,358 | 28,846 | |
2023 | 44,000 | 43,819 | |
2024 | 49,087 | 67,659 | |
2025 | 64,810 | ||
Thereafter | 115,119 | 53,739 | |
Total | 291,592 | 285,801 | $ 89,905 |
Amortization of Debt Issuance Costs | |||
Remaining 2021 | (509) | ||
2021 | (983) | (810) | |
2022 | (908) | (752) | |
2023 | (785) | (678) | |
2024 | (670) | (554) | |
2025 | (342) | ||
Thereafter | (258) | (202) | |
Total | (4,113) | (3,338) | $ (2,988) |
Debt, net | |||
Remaining 2021 | 10,152 | ||
2022 | 29,384 | 26,118 | |
2023 | 41,450 | 28,094 | |
2024 | 43,215 | 43,141 | |
2025 | 48,417 | 67,105 | |
2025 | 64,468 | ||
Thereafter | 114,861 | 53,537 | |
Net Debt | $ 287,479 | $ 282,463 |
DEBT - Measured at fair value (
DEBT - Measured at fair value (Details) - USD ($) $ in Thousands | Jun. 30, 2021 | Dec. 31, 2020 | Dec. 31, 2019 |
DEBT | |||
Carrying Amount | $ 291,592 | $ 285,801 | $ 89,905 |
Fair Value | $ 281,640 | $ 279,119 | $ 96,342 |
LEASES - Summary (Details)
LEASES - Summary (Details) $ in Thousands | 12 Months Ended | |||
Dec. 31, 2020USD ($)lease | Jun. 30, 2021USD ($) | Dec. 31, 2019USD ($) | Jan. 01, 2019USD ($) | |
LEASES | ||||
Number of categories in operating leases | lease | 3 | |||
Operating lease assets | $ 121,269 | $ 70,715 | $ 147,148 | |
Lease liability | $ 142,421 | |||
Aircraft Operated for Amazon | ||||
LEASES | ||||
Number of freighters subleased directly | lease | 12 | |||
Operating lease assets | $ 0 | |||
Lease liability | $ 0 | |||
Aircraft | ||||
LEASES | ||||
Number of leases for aircraft | lease | 17 | |||
Number of leases under finance leases | lease | 5 | |||
Number of leases under Right-of-use operating leases | lease | 12 | |||
Lease liability | $ 127,804 | |||
Real Estate | ||||
LEASES | ||||
Lease liability | $ 10,987 | |||
Real Estate | Maximum | ||||
LEASES | ||||
Initial terms | 10 years | |||
Other | ||||
LEASES | ||||
Lease liability | $ 3,630 |
LEASES - Lease-related assets a
LEASES - Lease-related assets and liabilities (Details) - USD ($) $ in Thousands | Jun. 30, 2021 | Dec. 31, 2020 | Dec. 31, 2019 |
Assets | |||
Finance lease assets, net | $ 104,815 | $ 194,328 | |
Operating lease assets | $ 70,715 | 121,269 | 147,148 |
Total lease assets | 226,084 | 341,476 | |
Liabilities | |||
Finance lease liabilities, current | 9,601 | 11,460 | 92,318 |
Operating lease liabilities, current | 18,239 | 34,492 | 30,611 |
Finance lease liabilities, long-term | 135,091 | 95,710 | 105,037 |
Operating lease liabilities, long-term | $ 68,408 | 112,707 | 141,879 |
Total lease liabilities | $ 254,369 | $ 369,845 |
LEASES - Rent payment deferrals
LEASES - Rent payment deferrals (Details) - USD ($) $ in Thousands | Jun. 30, 2021 | Dec. 31, 2020 |
LEASES | ||
Aircraft Lease Payment Deferrals | $ 0 | $ 7,569 |
Finance leases | ||
LEASES | ||
Aircraft Lease Payment Deferrals | 2,133 | |
Operating leases | ||
LEASES | ||
Aircraft Lease Payment Deferrals | $ 5,436 |
LEASES - Finance lease obligati
LEASES - Finance lease obligations (Details) - USD ($) $ in Thousands | Jun. 30, 2021 | Dec. 31, 2020 | Dec. 31, 2019 |
Finance Leases | |||
2021 | $ 17,572 | ||
2022 | 15,460 | ||
2023 | 15,460 | ||
2024 | 25,177 | ||
2025 | 12,489 | ||
Thereafter | 52,949 | ||
Total Minimum Lease Payments | 139,107 | ||
Less: Amount Representing Interest | (31,937) | ||
Present Value of Minimum Lease Payments | 107,170 | ||
Less: Short-term Obligations | $ (9,601) | (11,460) | $ (92,318) |
Finance lease liabilities, long-term | $ 135,091 | $ 95,710 | $ 105,037 |
LEASES - Operating lease obliga
LEASES - Operating lease obligations (Details) - USD ($) $ in Thousands | Jun. 30, 2021 | Dec. 31, 2020 | Dec. 31, 2019 |
Operating Leases | |||
2021 | $ 41,969 | ||
2022 | 36,365 | ||
2023 | 34,717 | ||
2024 | 25,942 | ||
2025 | 11,096 | ||
Thereafter | 13,293 | ||
Total Minimum Lease Payments | 163,382 | ||
Less: Amount Representing Interest | (20,961) | ||
Present Value of Minimum Lease Payments | 142,421 | ||
Plus: Tennant Improvements | 4,778 | ||
Less: Short-term Obligations | $ (18,239) | (34,492) | $ (30,611) |
Operating lease liabilities, long-term | $ 68,408 | 112,707 | $ 141,879 |
Aircraft | |||
Operating Leases | |||
2021 | 38,076 | ||
2022 | 32,842 | ||
2023 | 32,592 | ||
2024 | 24,476 | ||
2025 | 9,630 | ||
Thereafter | 8,222 | ||
Total Minimum Lease Payments | 145,838 | ||
Less: Amount Representing Interest | (18,034) | ||
Present Value of Minimum Lease Payments | 127,804 | ||
Less: Short-term Obligations | (30,880) | ||
Operating lease liabilities, long-term | 96,924 | ||
Real Estate | |||
Operating Leases | |||
2021 | 2,218 | ||
2022 | 1,962 | ||
2023 | 1,466 | ||
2024 | 1,466 | ||
2025 | 1,466 | ||
Thereafter | 5,071 | ||
Total Minimum Lease Payments | 13,649 | ||
Less: Amount Representing Interest | (2,662) | ||
Present Value of Minimum Lease Payments | 10,987 | ||
Plus: Tennant Improvements | 4,778 | ||
Less: Short-term Obligations | (2,105) | ||
Operating lease liabilities, long-term | 13,660 | ||
Other | |||
Operating Leases | |||
2021 | 1,675 | ||
2022 | 1,561 | ||
2023 | 659 | ||
Total Minimum Lease Payments | 3,895 | ||
Less: Amount Representing Interest | (265) | ||
Present Value of Minimum Lease Payments | 3,630 | ||
Less: Short-term Obligations | (1,507) | ||
Operating lease liabilities, long-term | $ 2,123 |
LEASES - Lease cost (Details)
LEASES - Lease cost (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | 9 Months Ended | 12 Months Ended | ||||
Jun. 30, 2021 | Jun. 30, 2020 | Apr. 10, 2018 | Jun. 30, 2021 | Jun. 30, 2020 | Dec. 31, 2018 | Dec. 31, 2020 | Dec. 31, 2019 | |
Lease cost | ||||||||
Financial Designation, Predecessor and Successor [Fixed List] | Predecessor | Successor | ||||||
Finance lease cost | ||||||||
Amortization of leased assets | $ 119 | $ 4,475 | $ 11,948 | $ 13,104 | ||||
Interest on lease liabilities | 293 | 4,754 | 8,659 | 10,741 | ||||
Operating lease cost | ||||||||
Short-term | 6,148 | 2,622 | 1,813 | 5,345 | ||||
Total Lease cost | 30,829 | 50,594 | 57,517 | 80,513 | ||||
Over-market lease rates | ||||||||
Operating lease cost | ||||||||
Credits for amortization of Over-market Liabilities | $ 1,618 | $ 3,726 | 0 | $ 4,373 | $ 7,830 | 17,275 | 14,110 | 20,386 |
Aircraft | ||||||||
Operating lease cost | ||||||||
Included in ROU asset | 16,177 | 33,315 | 30,717 | 40,043 | ||||
Variable | (1,541) | |||||||
Variable | 6,004 | 894 | 4,520 | |||||
Other | ||||||||
Operating lease cost | ||||||||
Included in ROU asset | 1,648 | 3,832 | 4,872 | 5,415 | ||||
Variable | $ 440 | $ 702 | $ 1,049 | $ 1,345 |
LEASES - Supplemental cash flow
LEASES - Supplemental cash flow information (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | 9 Months Ended | 12 Months Ended | ||
Apr. 10, 2018 | Jun. 30, 2021 | Jun. 30, 2020 | Dec. 31, 2018 | Dec. 31, 2020 | Dec. 31, 2019 | |
Cash paid for amounts included in the measurement of lease liabilities: | ||||||
Operating Cash Flows for Operating Leases | $ 34,576 | $ 50,081 | ||||
Operating Cash Flows for Finance Leases | 8,659 | 10,741 | ||||
Financing Cash Flows for Finance Leases | $ 49 | $ 7,864 | $ 85,976 | $ 3,160 | $ 89,697 | $ 8,258 |
LEASES - Terms and discount rat
LEASES - Terms and discount rates (Details) | Dec. 31, 2020 | Dec. 31, 2019 |
LEASES | ||
Weighted-average remaining lease term, operating leases | 4 years 9 months 18 days | 6 years |
Weighted-average remaining lease term, finance leases | 8 years 7 months 6 days | 6 years |
Weighted-average discount rates, operating leases | 6.00% | 5.80% |
Weighted-average discount rates, finance leases | 6.10% | 6.00% |
LEASES - Additional disclosures
LEASES - Additional disclosures (Details) $ in Thousands | Apr. 11, 2018aircraft | Apr. 30, 2021aircraft | Mar. 31, 2021aircraft | Jun. 30, 2021USD ($) | Jun. 30, 2020USD ($) | Apr. 10, 2018USD ($) | Jun. 30, 2021USD ($)aircraft | Jun. 30, 2020USD ($) | Dec. 31, 2018USD ($) | Dec. 31, 2020USD ($)aircraft | Dec. 31, 2019USD ($) |
LEASES | |||||||||||
Maintenance reserve payments expensed | $ 6,003 | $ 12,781 | $ 8,691 | $ 18,584 | |||||||
Number of aircrafts previously under operating leases | aircraft | 1 | 5 | 6 | 2 | |||||||
Aircraft maintenance deposits contra assets | |||||||||||
LEASES | |||||||||||
Remaining balance of the contra-asset | $ 22,792 | $ 22,792 | $ 36,729 | 43,844 | |||||||
Reduction in the contra-asset | 13,937 | 7,115 | |||||||||
Purchase of number of aircrafts previously leased | $ 5,624 | ||||||||||
Number of aircrafts previously under operating leases | aircraft | 6 | 2 | |||||||||
Contra-asset as a reduction to Maintenance expense | $ 850 | $ 0 | $ 850 | $ 328 | $ 6,516 | $ 1,402 | $ 12,263 |
STOCK-BASED COMPENSATION (Detai
STOCK-BASED COMPENSATION (Details) - USD ($) $ / shares in Units, $ in Thousands | Nov. 07, 2018 | Dec. 31, 2018 | Dec. 31, 2020 | Dec. 31, 2019 | Oct. 31, 2018 |
STOCK-BASED COMPENSATION | |||||
Stock compensation expense | $ 373 | $ 2,110 | $ 1,888 | ||
Total unrecognized compensation expense, expected to be recognized | $ 2,760 | ||||
Unrecognized compensation expense, weighted average period in which expected to be recognized | 1 year 6 months | ||||
Time-Based Stock Options | Employees | |||||
STOCK-BASED COMPENSATION | |||||
Granted | 221,941 | 472,253 | |||
Equity incentive plan | |||||
STOCK-BASED COMPENSATION | |||||
Authorized | 6,985,533 | ||||
Available for grant | 988,383 | ||||
Stock option exercise price range, lower limit | $ 5.30 | ||||
Stock option exercise price range, upper limit | $ 18.02 | ||||
Equity incentive plan | Employees | |||||
STOCK-BASED COMPENSATION | |||||
Granted | 5,827,511 | ||||
Equity incentive plan | Employees | Time based vesting | |||||
STOCK-BASED COMPENSATION | |||||
Percentage of options granted based on vesting condition | 38.50% | ||||
Equity incentive plan | Employees | Performance based vesting | |||||
STOCK-BASED COMPENSATION | |||||
Percentage of options granted based on vesting condition | 61.50% | ||||
Equity incentive plan | Time-Based Stock Options | |||||
STOCK-BASED COMPENSATION | |||||
Vesting percentage | 25.00% | 25.00% | |||
Vesting percentage each year over four years | 25.00% |
STOCK-BASED COMPENSATION - Stoc
STOCK-BASED COMPENSATION - Stock option activity (Details) - $ / shares | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Weighted average grant date fair value | |||
Shares issued | 1,416,645 | ||
Employees | |||
Weighted average grant date fair value | |||
Shares issued | 30,820 | ||
Time-Based Stock Options | Employees | |||
Number of shares | |||
Outstanding at beginning of period (in shares) | 2,281,308 | 2,243,588 | |
Granted (in shares) | 221,941 | 472,253 | |
Forfeited (in shares) | (173,788) | (434,533) | |
Outstanding at end of period (in shares) | 2,329,461 | 2,281,308 | 2,243,588 |
Exercisable at end of period (in shares) | 1,054,059 | ||
Vested or expected to vest, at end of period (in shares) | 2,329,461 | ||
Weighted average exercise price per share | |||
Outstanding at beginning of period (in dollars per share) | $ 5.84 | $ 5.29 | |
Granted (in dollars per share) | 17.99 | 7.93 | |
Forfeited (in dollars per share) | 14.65 | 5.29 | |
Outstanding at end of period (in dollars per share) | 6.36 | 5.84 | $ 5.29 |
Exercisable at end of period (in dollars per share) | 5.64 | ||
Vested or expected to vest, at end of period (in dollars per share) | 6.36 | ||
Weighted average grant date fair value | |||
Outstanding at beginning of period (in dollars per share) | 2.54 | 2.39 | |
Granted (in dollars per share) | 7.02 | 3.14 | |
Forfeited (in dollars per share) | 5.70 | 2.39 | |
Outstanding at end of period (in dollars per share) | 2.74 | $ 2.54 | $ 2.39 |
Exercisable at end of period (in dollars per share) | 2.50 | ||
Vested or expected to vest, at end of period (in dollars per share) | $ 2.74 | ||
Weighted average remaining contractual term, outstanding (in years) | 7 years 7 months 6 days | 9 years | 9 years 9 months 18 days |
Performance-Based Stock Options | Employees | |||
Number of shares | |||
Outstanding at beginning of period (in shares) | 3,502,947 | 3,583,923 | |
Granted (in shares) | 346,984 | 746,836 | |
Forfeited (in shares) | (272,679) | (827,812) | |
Outstanding at end of period (in shares) | 3,577,252 | 3,502,947 | 3,583,923 |
Weighted average exercise price per share | |||
Outstanding at beginning of period (in dollars per share) | $ 5.86 | $ 5.29 | |
Granted (in dollars per share) | 17.99 | 7.96 | |
Forfeited (in dollars per share) | 14.65 | 5.29 | |
Outstanding at end of period (in dollars per share) | 6.38 | 5.86 | $ 5.29 |
Weighted average grant date fair value | |||
Outstanding at beginning of period (in dollars per share) | 1.61 | 1.50 | |
Granted (in dollars per share) | 4.36 | 2.01 | |
Forfeited (in dollars per share) | 3.59 | 1.50 | |
Outstanding at end of period (in dollars per share) | $ 1.72 | $ 1.61 | $ 1.50 |
Weighted average remaining contractual term, outstanding (in years) | 7 years 7 months 6 days | 9 years | 9 years 9 months 18 days |
STOCK-BASED COMPENSATION - St_2
STOCK-BASED COMPENSATION - Stock options valuation assumptions (Details) | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions and Methodology [Abstract] | ||
Expected Term | 5 years 7 months 2 days | 5 years 8 months 1 day |
Expected Volatility | 38.80% | 33.90% |
Risk-free Interest Rate | 1.70% | 1.70% |
FUEL DERIVATIVES AND RISK MAN_3
FUEL DERIVATIVES AND RISK MANAGEMENT (Details) - Fuel Derivative Contracts $ in Thousands, gal in Millions | 3 Months Ended | 6 Months Ended | 9 Months Ended | 12 Months Ended | |||
Jun. 30, 2021USD ($)gal | Jun. 30, 2020USD ($) | Jun. 30, 2021USD ($)gal | Jun. 30, 2020USD ($) | Dec. 31, 2018USD ($) | Dec. 31, 2020USD ($)gal | Dec. 31, 2019USD ($) | |
Changes in Derivative Assets (Liabilities) | |||||||
Balance - January 1 | $ (1,174) | $ 2,233 | $ 2,233 | $ (12,006) | |||
Non-cash Gains (Losses) | 3,599 | (16,056) | (12,206) | 10,791 | |||
Contract Settlements | (827) | 4,990 | 8,800 | 3,448 | |||
Balance - June 30 | $ 1,598 | $ (8,833) | 1,598 | (8,833) | $ (12,006) | (1,174) | 2,233 |
Fuel Derivative Gains (Losses) | |||||||
Non-cash Gains (Losses) | 1,213 | 5,695 | 3,599 | (16,056) | (12,006) | (12,206) | 10,791 |
Cash Premiums Paid | (1,617) | (1,901) | (2,280) | (2,053) | (665) | ||
Total Fuel Derivative Gains (Losses) | $ 1,213 | $ 4,078 | $ 3,599 | $ (17,957) | $ (14,286) | $ (14,259) | $ 10,126 |
Outstanding volume | gal | 5.8 | 5.8 | 21 |
FAIR VALUE MEASUREMENTS (Detail
FAIR VALUE MEASUREMENTS (Details) - Recurring - USD ($) $ in Thousands | Jun. 30, 2021 | Dec. 31, 2020 | Dec. 31, 2019 |
FAIR VALUE MEASUREMENTS | |||
Total Assets measured at fair value on a recurring basis | $ 1,598 | $ 2,233 | |
Total Liabilities measured at fair value on a recurring basis | $ 1,174 | ||
Fuel Derivative Contracts | |||
FAIR VALUE MEASUREMENTS | |||
Total Assets measured at fair value on a recurring basis | 1,598 | 2,233 | |
Total Liabilities measured at fair value on a recurring basis | 1,174 | ||
Level 2 | |||
FAIR VALUE MEASUREMENTS | |||
Total Assets measured at fair value on a recurring basis | 1,598 | 2,233 | |
Total Liabilities measured at fair value on a recurring basis | 1,174 | ||
Level 2 | Fuel Derivative Contracts | |||
FAIR VALUE MEASUREMENTS | |||
Total Assets measured at fair value on a recurring basis | $ 1,598 | $ 2,233 | |
Total Liabilities measured at fair value on a recurring basis | $ 1,174 |
INCOME TAXES - Components of In
INCOME TAXES - Components of Income Taxes (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | 9 Months Ended | 12 Months Ended | |||
Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2021 | Jun. 30, 2020 | Dec. 31, 2018 | Dec. 31, 2020 | Dec. 31, 2019 | |
Current: | |||||||
State and Local | $ 10 | $ 66 | |||||
Total Current Tax Expense | 10 | 66 | |||||
Deferred: | |||||||
Federal | $ 129 | (597) | 12,509 | ||||
State and Local | 32 | (191) | 1,513 | ||||
Total Deferred Tax Expense / (Benefit) | $ 14,875 | $ 570 | 147 | (789) | 14,022 | ||
Total Income Tax Expense / (Benefit) | $ 9,468 | $ (1,898) | $ 14,875 | $ 547 | $ 161 | $ (778) | $ 14,088 |
INCOME TAXES - Tax Rate Reconci
INCOME TAXES - Tax Rate Reconciliation (Details) | 3 Months Ended | 6 Months Ended | 9 Months Ended | 12 Months Ended | |||
Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2021 | Jun. 30, 2020 | Dec. 31, 2018 | Dec. 31, 2020 | Dec. 31, 2019 | |
Expected Provision at Federal Statutory | |||||||
Tax Rate | 21.00% | 21.00% | 21.00% | ||||
State Tax, net of Federal Impact | (12.00%) | 3.10% | 2.10% | ||||
Employee Parking | (40.40%) | (3.30%) | 0.20% | ||||
Meals and Entertainment | (42.90%) | (2.20%) | 0.20% | ||||
Other Permanent Adjustments | (3.60%) | (2.00%) | 0.00% | ||||
Effective Tax Rate | 15.50% | 23.90% | 18.80% | 31.10% | (77.90%) | 16.60% | 23.50% |
INCOME TAXES - Deferred taxes (
INCOME TAXES - Deferred taxes (Details) - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
Deferred Tax Assets: | ||
Net Operating Loss | $ 75,389 | $ 24,680 |
Operating Lease Obligations | 32,942 | 38,629 |
Finance Lease Obligations | 20,095 | 45,392 |
Goodwill and Other Intangible Assets | 12,586 | 15,325 |
Loyalty Program Liabilities | 4,911 | 5,064 |
Accrued Maintenance | 4,434 | 7,481 |
Other | 4,318 | 2,769 |
Total Deferred Tax Assets | 154,675 | 139,340 |
Deferred Tax Liabilities: | ||
Accelerated Depreciation | (67,105) | (24,858) |
Operating Lease Right-of-use Assets | (27,892) | (33,844) |
Finance Lease Assets | (23,462) | (44,696) |
Unrealized Gain on Fuel Derivatives | (514) | |
Total Deferred Tax Liabilities | (118,459) | (103,912) |
Total Net Deferred Tax Assets | $ 36,216 | $ 35,428 |
INCOME TAXES - Paragraphs (Deta
INCOME TAXES - Paragraphs (Details) - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
INCOME TAXES | ||
Federal net operating loss | $ 73,116 | |
State net operating loss | 2,273 | |
Liability for unrecognized tax benefits | $ 0 | $ 0 |
DEFINED CONTRIBUTION 401K (Deta
DEFINED CONTRIBUTION 401K (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | 12 Months Ended | |
Apr. 10, 2018 | Dec. 31, 2018 | Dec. 31, 2020 | Dec. 31, 2019 | |
DEFINED CONTRIBUTION 401(K) PLAN | ||||
Employee's maximum contribution allowed (as a percent) | 50.00% | |||
Matching contribution of participants' contribution (as a percent) | 100.00% | |||
Non-discretionary contribution for pilots based on gross earnings | 2.00% | |||
Non-Discretionary | $ 308 | $ 592 | $ 1,040 | $ 908 |
Discretionary | 1,026 | 2,436 | 4,263 | 4,246 |
Total 401(k) Contributions | $ 1,334 | $ 3,028 | $ 5,303 | $ 5,154 |
Non Pilot Employees [Member] | ||||
DEFINED CONTRIBUTION 401(K) PLAN | ||||
Maximum contribution as a percent of participants' compensation | 4.00% | |||
Pilot Employees [Member] | ||||
DEFINED CONTRIBUTION 401(K) PLAN | ||||
Maximum contribution as a percent of participants' compensation | 6.00% |
SPECIAL ITEMS, NET - Schedule o
SPECIAL ITEMS, NET - Schedule of special items, net (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | 9 Months Ended | 12 Months Ended | |||||
Jun. 30, 2021 | Mar. 31, 2021 | Jun. 30, 2020 | Apr. 10, 2018 | Jun. 30, 2021 | Jun. 30, 2020 | Dec. 31, 2018 | Dec. 31, 2020 | Dec. 31, 2019 | |
SPECIAL ITEMS, NET | |||||||||
Financial Designation, Predecessor and Successor [Fixed List] | Predecessor | Successor | |||||||
CARES Act grant recognition | $ (39,378) | $ (31,516) | $ (71,587) | $ (31,516) | $ (62,312) | ||||
CARES Act employee retention credit | (446) | $ (334) | (780) | (2,328) | |||||
Contractual obligations for retired technology | $ 7,578 | ||||||||
Sale of airport slot rights | (1,200) | ||||||||
Sun Country Rewards program modifications | $ (8,463) | ||||||||
Early-out payments and other outsourcing expenses | $ 271 | 1,757 | |||||||
Aircraft purchase impacts | 1,299 | 6,963 | |||||||
Other | 5 | 35 | 12 | 35 | 77 | 714 | |||
Total Special Items, net | $ (38,520) | $ (31,481) | $ 271 | $ (65,392) | $ (31,481) | $ (6,706) | $ (64,563) | $ 7,092 |
OPERATING SEGMENTS (Details)
OPERATING SEGMENTS (Details) $ in Thousands | 3 Months Ended | 6 Months Ended | 9 Months Ended | 12 Months Ended | ||||||||||||
Jun. 30, 2021USD ($) | Dec. 31, 2020USD ($) | Sep. 30, 2020USD ($) | Jun. 30, 2020USD ($) | Mar. 31, 2020USD ($) | Dec. 31, 2019USD ($) | Sep. 30, 2019USD ($) | Jun. 30, 2019USD ($) | Mar. 31, 2019USD ($) | Apr. 10, 2018USD ($) | Jun. 30, 2021USD ($)segmentitem | Jun. 30, 2020USD ($) | Dec. 31, 2018USD ($) | Dec. 31, 2020USD ($)segmentitem | Dec. 31, 2019USD ($)segment | Dec. 31, 2018segment | |
OPERATING SEGMENTS | ||||||||||||||||
Number of operating segments | segment | 2 | 2 | 2 | 2 | ||||||||||||
Number of internal passenger groups | item | 2 | 1 | ||||||||||||||
Operating Revenues | $ 149,189 | $ 107,807 | $ 77,973 | $ 35,376 | $ 180,330 | $ 163,864 | $ 171,478 | $ 169,373 | $ 196,669 | $ 197,452 | $ 276,802 | $ 215,706 | $ 384,931 | $ 401,486 | $ 701,384 | |
Non-Fuel Operating Expenses | 108,762 | 68,414 | 214,038 | 177,953 | 365,272 | |||||||||||
Aircraft Fuel | 29,709 | 677 | 45,790 | 53,984 | 56,238 | 119,553 | 83,392 | 165,666 | ||||||||
Special Items, net | (38,520) | (31,481) | 271 | (65,392) | (31,481) | (6,706) | (64,563) | 7,092 | ||||||||
Total Operating Expenses | 99,951 | 37,610 | 171,336 | 202,630 | 202,710 | 377,699 | 384,101 | 623,262 | ||||||||
Operating Income | 49,238 | $ (4,428) | $ 8,817 | (2,234) | $ 15,230 | $ 11,604 | $ 10,475 | $ 9,541 | $ 46,502 | 26,116 | 74,172 | 12,996 | 7,232 | 17,385 | 78,122 | |
Interest Income | 9 | 63 | 96 | 24 | 314 | 258 | 377 | 937 | ||||||||
Interest Expense | (6,080) | (5,442) | (339) | (13,201) | (11,058) | (6,060) | (22,073) | (17,170) | ||||||||
Other Non-operating Income (Expense), net | (371) | |||||||||||||||
Income (Loss) before Income Tax | 61,221 | (7,938) | $ 25,910 | 79,044 | 1,758 | $ (206) | (4,682) | $ 60,160 | ||||||||
Passenger | ||||||||||||||||
OPERATING SEGMENTS | ||||||||||||||||
Operating Revenues | 127,091 | 32,157 | 233,118 | 212,487 | 364,677 | |||||||||||
Non-Fuel Operating Expenses | 92,361 | 63,507 | 179,566 | 173,046 | 332,742 | |||||||||||
Aircraft Fuel | 29,657 | 677 | 53,912 | 56,238 | 83,392 | |||||||||||
Special Items, net | (28,784) | (28,111) | (46,991) | (28,111) | (53,842) | |||||||||||
Total Operating Expenses | 93,234 | 36,073 | 186,487 | 201,173 | 362,292 | |||||||||||
Operating Income | 33,857 | (3,916) | 46,631 | 11,314 | 2,385 | |||||||||||
Cargo | ||||||||||||||||
OPERATING SEGMENTS | ||||||||||||||||
Operating Revenues | 22,098 | 3,219 | 43,684 | 3,219 | 36,809 | |||||||||||
Non-Fuel Operating Expenses | 16,401 | 4,907 | 34,472 | 4,907 | 32,530 | |||||||||||
Aircraft Fuel | 52 | 72 | ||||||||||||||
Special Items, net | (9,736) | (3,370) | (18,401) | (3,370) | (10,721) | |||||||||||
Total Operating Expenses | 6,717 | 1,537 | 16,143 | 1,537 | 21,809 | |||||||||||
Operating Income | $ 15,381 | $ 1,682 | $ 27,541 | $ 1,682 | $ 15,000 |
CONDENSED PARENT COMPANY FINA_3
CONDENSED PARENT COMPANY FINANCIAL INFORMATION - Condensed Balance Sheets (Details) - USD ($) $ in Thousands | Jun. 30, 2021 | Dec. 31, 2020 | Jun. 30, 2020 | Dec. 31, 2019 | Dec. 31, 2018 |
Current Assets: | |||||
Cash and Equivalents | $ 310,723 | $ 62,028 | $ 32,084 | $ 51,006 | $ 29,600 |
Total Current Assets | 371,246 | 126,740 | 112,525 | ||
Other Assets: | |||||
Other Assets | 6,137 | 6,357 | 2,129 | ||
Total Other Assets | 438,677 | 512,012 | 550,274 | ||
Total Assets | 1,309,964 | 1,053,267 | 1,007,876 | ||
Current Liabilities: | |||||
Other Current Liabilities | 5,145 | 6,841 | 2,002 | ||
Total Current Liabilities | 250,806 | 253,743 | 353,551 | ||
Total Liabilities | 845,731 | 769,450 | 724,152 | ||
Stockholders' Equity: | |||||
Common Stock | 572 | 468 | 239,141 | ||
Loans to Stockholders | (3,500) | (3,500) | $ (3,500) | ||
Additional Paid in Capital | 476,368 | 248,525 | 5,855 | ||
Retained Earnings | (12,707) | 38,324 | 42,228 | ||
Total Stockholders' Equity | 464,233 | 283,817 | 283,724 | ||
Total Liabilities and Stockholders' Equity | $ 1,309,964 | 1,053,267 | 1,007,876 | ||
Parent Company | |||||
Current Assets: | |||||
Cash and Equivalents | 7 | ||||
Total Current Assets | 7 | ||||
Other Assets: | |||||
Investment in Subsidiary | 282,569 | 284,185 | |||
Other Assets | 1,429 | ||||
Total Other Assets | 283,998 | 284,185 | |||
Total Assets | 283,998 | 284,192 | |||
Current Liabilities: | |||||
Other Current Liabilities | 181 | 468 | |||
Total Current Liabilities | 181 | 468 | |||
Total Liabilities | 181 | 468 | |||
Stockholders' Equity: | |||||
Common Stock | 239,162 | 239,141 | |||
Loans to Stockholders | (3,500) | (3,500) | |||
Additional Paid in Capital | 9,831 | 5,855 | |||
Retained Earnings | 38,324 | 42,228 | |||
Total Stockholders' Equity | 283,817 | 283,724 | |||
Total Liabilities and Stockholders' Equity | $ 283,998 | $ 284,192 |
CONDENSED PARENT COMPANY FINA_4
CONDENSED PARENT COMPANY FINANCIAL INFORMATION - Condensed Statements of Operations (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | 9 Months Ended | 12 Months Ended | ||||||||||||
Jun. 30, 2021 | Mar. 31, 2021 | Dec. 31, 2020 | Sep. 30, 2020 | Jun. 30, 2020 | Mar. 31, 2020 | Dec. 31, 2019 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Apr. 10, 2018 | Jun. 30, 2021 | Jun. 30, 2020 | Dec. 31, 2018 | Dec. 31, 2020 | Dec. 31, 2019 | |
Operating Expenses: | ||||||||||||||||
Other Operating, net | $ 16,746 | $ 9,484 | $ 17,994 | $ 31,397 | $ 23,917 | $ 40,877 | $ 48,718 | $ 68,187 | ||||||||
Total Operating Expenses | 99,951 | 37,610 | 171,336 | 202,630 | 202,710 | 377,699 | 384,101 | 623,262 | ||||||||
Operating Income (Loss) | 49,238 | $ (4,428) | $ 8,817 | (2,234) | $ 15,230 | $ 11,604 | $ 10,475 | $ 9,541 | $ 46,502 | 26,116 | 74,172 | 12,996 | 7,232 | 17,385 | 78,122 | |
Non-operating Income (Expense): | ||||||||||||||||
Other, net | 371 | |||||||||||||||
Total Non-operating Income (Expense), net | 11,983 | (5,704) | (206) | 4,872 | (11,238) | (7,438) | (22,067) | (17,962) | ||||||||
Income (Loss) before Income Tax | 61,221 | (7,938) | 25,910 | 79,044 | 1,758 | (206) | (4,682) | 60,160 | ||||||||
Income Tax Expense / (Benefit) | 9,468 | (1,898) | 14,875 | 547 | 161 | (778) | 14,088 | |||||||||
Net Income (Loss) | $ 51,753 | $ 12,416 | $ (8,042) | $ 2,927 | $ (6,040) | $ 7,251 | $ 5,018 | $ 3,973 | $ 3,713 | $ 33,368 | $ 25,910 | $ 64,169 | $ 1,211 | (367) | (3,904) | 46,072 |
Parent Company | ||||||||||||||||
Operating Expenses: | ||||||||||||||||
Other Operating, net | 564 | 179 | 439 | |||||||||||||
Total Operating Expenses | 564 | 179 | 439 | |||||||||||||
Operating Income (Loss) | (564) | (179) | (439) | |||||||||||||
Non-operating Income (Expense): | ||||||||||||||||
Equity in Income / (Loss) of Subsidiaries | 197 | (3,725) | 46,283 | |||||||||||||
Other, net | 228 | |||||||||||||||
Total Non-operating Income (Expense), net | 197 | (3,725) | 46,511 | |||||||||||||
Income (Loss) before Income Tax | (367) | (3,904) | 46,072 | |||||||||||||
Net Income (Loss) | $ (367) | $ (3,904) | $ 46,072 |
CONDENSED PARENT COMPANY FINA_5
CONDENSED PARENT COMPANY FINANCIAL INFORMATION - Condensed Statements of Cash Flows (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | 9 Months Ended | 12 Months Ended | ||
Apr. 10, 2018 | Jun. 30, 2021 | Jun. 30, 2020 | Dec. 31, 2018 | Dec. 31, 2020 | Dec. 31, 2019 | |
Cash Flows from Operating Activities: | ||||||
Net Cash Provided by (Used in) Operating Activities | $ 4,583 | $ 89,841 | $ (12,895) | $ 13,764 | $ 374 | $ 63,272 |
Cash Flows from Investing Activities: | ||||||
Net Cash Used in Investing Activities | (2,594) | (67,188) | (93,640) | (80,823) | (96,028) | (69,564) |
Cash Flows from Financing Activities: | ||||||
Cash Contributions from Stockholders | 47,866 | |||||
Proceeds Received from Exercise of Apollo Warrants | 21 | |||||
Net Cash Provided by Financing Activities | (10,680) | 222,469 | 76,709 | 102,193 | 101,539 | 27,329 |
Net Increase (Decrease) in Cash, Cash Equivalents and Restricted Cash | (8,691) | 245,122 | (29,826) | 35,133 | 5,885 | 21,037 |
Cash, Cash Equivalents and Restricted Cash-Beginning of the Period | 16,999 | 70,363 | 64,478 | 8,308 | 64,478 | 43,441 |
Cash, Cash Equivalents and Restricted Cash-End of the Period | $ 8,308 | $ 315,485 | 34,652 | 43,441 | 70,363 | 64,478 |
Parent Company | ||||||
Cash Flows from Investing Activities: | ||||||
Net Payments to Subsidiary | (47,866) | (28) | ||||
Net Cash Used in Investing Activities | (47,866) | (28) | ||||
Cash Flows from Financing Activities: | ||||||
Cash Contributions from Stockholders | 47,866 | |||||
Net Payments from Subsidiary | 7 | |||||
Proceeds Received from Exercise of Apollo Warrants | 21 | |||||
Net Cash Provided by Financing Activities | $ 47,866 | 21 | 7 | |||
Net Increase (Decrease) in Cash, Cash Equivalents and Restricted Cash | (7) | 7 | ||||
Cash, Cash Equivalents and Restricted Cash-Beginning of the Period | $ 7 | $ 7 | ||||
Cash, Cash Equivalents and Restricted Cash-End of the Period | $ 7 |
SUBSEQUENT EVENTS (Details)
SUBSEQUENT EVENTS (Details) $ in Thousands | Apr. 06, 2021aircraft | Apr. 30, 2021aircraft | Mar. 31, 2021USD ($)aircraftshares | Jun. 30, 2021USD ($)aircraft | Dec. 31, 2020aircraftshares |
SUBSEQUENT EVENTS | |||||
Number of aircrafts previously under operating leases | aircraft | 1 | 5 | 6 | 2 | |
Stock split ratio | 18.8886 | ||||
Share issued as a result of stock split | shares | 44,226,587 | ||||
Common stock shares outstanding | shares | 44,359,873 | ||||
Delayed Draw Term Loan Facility | |||||
SUBSEQUENT EVENTS | |||||
Amount drawn | $ | $ 79,494 | ||||
Number of aircrafts previously under operating leases | aircraft | 6 | ||||
Subsequent Event | |||||
SUBSEQUENT EVENTS | |||||
Stock split ratio | 18.8886 | ||||
Share issued as a result of stock split | shares | 44,226,587 | ||||
Fractional shares issued | shares | 0 | ||||
Subsequent Event | Delayed Draw Term Loan Facility | |||||
SUBSEQUENT EVENTS | |||||
Amount drawn | $ | $ 68,000 | ||||
Number of aircrafts previously under operating leases | aircraft | 5 | 5 | |||
Subsequent Event | Passenger | |||||
SUBSEQUENT EVENTS | |||||
Number of aircrafts previously under operating leases | aircraft | 3 |
QUARTERLY FINANCIAL DATA (UNA_3
QUARTERLY FINANCIAL DATA (UNAUDITED) (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 6 Months Ended | 9 Months Ended | 12 Months Ended | ||||||||||||
Jun. 30, 2021 | Mar. 31, 2021 | Dec. 31, 2020 | Sep. 30, 2020 | Jun. 30, 2020 | Mar. 31, 2020 | Dec. 31, 2019 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Apr. 10, 2018 | Jun. 30, 2021 | Jun. 30, 2020 | Dec. 31, 2018 | Dec. 31, 2020 | Dec. 31, 2019 | |
QUARTERLY FINANCIAL DATA (UNAUDITED) | ||||||||||||||||
Operating Revenues | $ 149,189 | $ 107,807 | $ 77,973 | $ 35,376 | $ 180,330 | $ 163,864 | $ 171,478 | $ 169,373 | $ 196,669 | $ 197,452 | $ 276,802 | $ 215,706 | $ 384,931 | $ 401,486 | $ 701,384 | |
Operating Income | 49,238 | (4,428) | 8,817 | (2,234) | 15,230 | 11,604 | 10,475 | 9,541 | 46,502 | 26,116 | 74,172 | 12,996 | 7,232 | 17,385 | 78,122 | |
Net Income (Loss) | $ 51,753 | $ 12,416 | $ (8,042) | $ 2,927 | $ (6,040) | $ 7,251 | $ 5,018 | $ 3,973 | $ 3,713 | $ 33,368 | $ 25,910 | $ 64,169 | $ 1,211 | $ (367) | $ (3,904) | $ 46,072 |
Net Income / (Loss) per share to common stockholders: | ||||||||||||||||
Basic earnings (loss) per share | $ 0.91 | $ (0.17) | $ 0.06 | $ (0.13) | $ 0.16 | $ 0.11 | $ 0.08 | $ 0.08 | $ 0.71 | $ 0.26 | $ 1.21 | $ 0.03 | $ (0.01) | $ (0.08) | $ 0.99 | |
Diluted earnings (loss) per share | $ 0.83 | $ (0.17) | $ 0.06 | $ (0.13) | $ 0.15 | $ 0.10 | $ 0.08 | $ 0.08 | $ 0.71 | $ 0.26 | $ 1.12 | $ 0.02 | $ (0.01) | $ (0.08) | $ 0.96 |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Jun. 30, 2021 | Dec. 31, 2020 | Dec. 31, 2019 |
Current Assets: | |||
Cash and Equivalents | $ 310,723 | $ 62,028 | $ 51,006 |
Restricted Cash | 4,762 | 8,335 | 13,472 |
Investments | 6,076 | 5,624 | 5,694 |
Accounts Receivable, net of an allowance for credit losses of $297 and $224, respectively | 25,989 | 28,690 | 22,408 |
Short-term Lessor Maintenance Deposits | 1,490 | 3,101 | 1,970 |
Inventory, net of a reserve for obsolescence of $1,188 and $996, respectively | 5,382 | 5,407 | 5,273 |
Prepaid Expenses | 14,447 | 8,002 | 7,717 |
Derivative Assets | 1,598 | 2,233 | |
Other Current Assets | 779 | 5,553 | 2,752 |
Total Current Assets | 371,246 | 126,740 | 112,525 |
Property & Equipment, net: | |||
Property & Equipment | 588,745 | 479,580 | 372,805 |
Accumulated Depreciation & Amortization | (88,704) | (65,065) | (27,728) |
Total Property & Equipment, net | 500,041 | 414,515 | 345,077 |
Other Assets: | |||
Goodwill | 222,223 | 222,223 | 222,223 |
Other Intangible Assets, net | 91,110 | 93,110 | 97,110 |
Operating Lease Right-of-use Assets | 70,715 | 121,269 | 147,148 |
Aircraft Lease Deposits | 7,657 | 10,253 | 17,970 |
Long-term Lessor Maintenance Deposits | 19,493 | 22,584 | 28,266 |
Deferred Tax Asset | 21,342 | 36,216 | 35,428 |
Other Assets | 6,137 | 6,357 | 2,129 |
Total Other Assets | 438,677 | 512,012 | 550,274 |
Total Assets | 1,309,964 | 1,053,267 | 1,007,876 |
Current Liabilities: | |||
Accounts Payable | 36,847 | 34,035 | 43,900 |
Accrued Salaries, Wages, and Benefits | 17,855 | 16,368 | 16,621 |
Accrued Transportation Taxes | 12,907 | 5,883 | 13,729 |
Air Traffic Liabilities | 113,771 | 101,075 | 116,660 |
Derivative Liabilities | 1,174 | ||
Over-market Liabilities | 4,309 | 9,281 | 10,421 |
Finance Lease Obligations | 9,601 | 11,460 | 92,318 |
Loyalty Program Liabilities | 12,337 | 7,016 | 14,092 |
Operating Lease Obligations | 18,239 | 34,492 | 30,611 |
Current Maturities of Long-term Debt | 19,795 | 26,118 | 13,197 |
Other Current Liabilities | 5,145 | 6,841 | 2,002 |
Total Current Liabilities | 250,806 | 253,743 | 353,551 |
Long-term Liabilities: | |||
Over-market Liabilities | 12,583 | 28,128 | 37,409 |
Finance Lease Obligations | 135,091 | 95,710 | 105,037 |
Loyalty Program Liabilities | 8,540 | 15,053 | 8,800 |
Operating Lease Obligations | 68,408 | 112,707 | 141,879 |
Long-term Debt | 267,684 | 256,345 | 73,720 |
Income Tax Receivable Agreement Liability | 96,500 | ||
Other Long-term Liabilities | 6,119 | 7,764 | 3,756 |
Total Long-term Liabilities | 594,925 | 515,707 | 370,601 |
Total Liabilities | 845,731 | 769,450 | 724,152 |
Commitments and Contingencies | |||
Stockholders' Equity: | |||
Common stock with $0.01 par value, 995,000,000 shares authorized, 57,158,467 and 46,839,659 issued at June 30, 2021 and December 31, 2020, respectively. | 572 | 468 | 239,141 |
Loans to Stockholders | (3,500) | (3,500) | |
Additional Paid In Capital | 476,368 | 248,525 | 5,855 |
Retained Earnings (Deficit) | (12,707) | 38,324 | 42,228 |
Total Stockholders' Equity | 464,233 | 283,817 | 283,724 |
Total Liabilities and Stockholders' Equity | 1,309,964 | 1,053,267 | 1,007,876 |
Aircraft and Flight Equipment | |||
Property & Equipment, net: | |||
Property & Equipment | 395,646 | 331,685 | 142,100 |
Leasehold Improvements and Ground Equipment | |||
Property & Equipment, net: | |||
Property & Equipment | 14,025 | 13,526 | 12,701 |
Computer Hardware and Software | |||
Property & Equipment, net: | |||
Property & Equipment | 8,331 | 7,845 | 8,702 |
Finance Lease Assets | |||
Property & Equipment, net: | |||
Property & Equipment | 161,649 | 117,833 | 201,026 |
Rotable Parts | |||
Property & Equipment, net: | |||
Property & Equipment | $ 9,094 | $ 8,691 | $ 8,276 |
CONDENSED CONSOLIDATED BALANC_2
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands | Jun. 30, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | Apr. 11, 2018 |
CONDENSED CONSOLIDATED BALANCE SHEETS | ||||
Accounts Receivable, allowance for credit losses | $ 297 | $ 224 | $ 630 | |
Inventory, reserve for obsolescence | $ 1,188 | $ 996 | $ 550 | |
Common stock-par value (in dollars per share) | $ 0.01 | $ 0.01 | $ 0 | $ 0 |
Common stock-shares authorized | 995,000,000 | 995,000,000 | 94,443,000 | |
Common stock-shares issued | 57,158,467 | 46,839,659 | 6,800,065 | 5,326,755 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | 9 Months Ended | 12 Months Ended | ||||||||||||
Jun. 30, 2021 | Mar. 31, 2021 | Dec. 31, 2020 | Sep. 30, 2020 | Jun. 30, 2020 | Mar. 31, 2020 | Dec. 31, 2019 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Apr. 10, 2018 | Jun. 30, 2021 | Jun. 30, 2020 | Dec. 31, 2018 | Dec. 31, 2020 | Dec. 31, 2019 | |
Operating Revenues: | ||||||||||||||||
Operating Revenues | $ 149,189 | $ 107,807 | $ 77,973 | $ 35,376 | $ 180,330 | $ 163,864 | $ 171,478 | $ 169,373 | $ 196,669 | $ 197,452 | $ 276,802 | $ 215,706 | $ 384,931 | $ 401,486 | $ 701,384 | |
Operating Expenses: | ||||||||||||||||
Aircraft Fuel | 29,709 | 677 | 45,790 | 53,984 | 56,238 | 119,553 | 83,392 | 165,666 | ||||||||
Salaries, Wages, and Benefits | 42,316 | 32,484 | 36,964 | 86,392 | 70,575 | 90,263 | 141,641 | 140,739 | ||||||||
Aircraft Rent | 3,815 | 5,934 | 28,329 | 9,414 | 16,966 | 36,831 | 30,989 | 49,908 | ||||||||
Maintenance | 11,300 | 2,426 | 9,508 | 20,510 | 8,904 | 15,491 | 27,416 | 35,286 | ||||||||
Sales and Marketing | 5,822 | 1,630 | 10,854 | 10,932 | 10,202 | 17,180 | 16,570 | 35,388 | ||||||||
Depreciation and Amortization | 13,460 | 12,175 | 2,526 | 26,075 | 22,702 | 14,405 | 48,086 | 34,877 | ||||||||
Ground Handling | 6,551 | 1,614 | 8,619 | 11,781 | 10,906 | 23,828 | 20,596 | 41,719 | ||||||||
Landing Fees and Airport Rent | 8,752 | 2,667 | 10,481 | 17,537 | 13,781 | 25,977 | 31,256 | 44,400 | ||||||||
Special Items, net | (38,520) | (31,481) | 271 | (65,392) | (31,481) | (6,706) | (64,563) | 7,092 | ||||||||
Other Operating, net | 16,746 | 9,484 | 17,994 | 31,397 | 23,917 | 40,877 | 48,718 | 68,187 | ||||||||
Total Operating Expenses | 99,951 | 37,610 | 171,336 | 202,630 | 202,710 | 377,699 | 384,101 | 623,262 | ||||||||
Operating Income (Loss) | 49,238 | (4,428) | 8,817 | (2,234) | 15,230 | 11,604 | 10,475 | 9,541 | 46,502 | 26,116 | 74,172 | 12,996 | 7,232 | 17,385 | 78,122 | |
Non-operating Income (Expense): | ||||||||||||||||
Interest Income | 9 | 63 | 96 | 24 | 314 | 258 | 377 | 937 | ||||||||
Interest Expense | (6,080) | (5,442) | (339) | (13,201) | (11,058) | (6,060) | (22,073) | (17,170) | ||||||||
Other, net | 18,054 | (325) | 37 | 18,049 | (494) | (1,636) | (371) | (1,729) | ||||||||
Total Non-operating Income (Expense), net | 11,983 | (5,704) | (206) | 4,872 | (11,238) | (7,438) | (22,067) | (17,962) | ||||||||
Income (Loss) before Income Tax | 61,221 | (7,938) | 25,910 | 79,044 | 1,758 | (206) | (4,682) | 60,160 | ||||||||
Income Tax Expense (Benefit) | 9,468 | (1,898) | 14,875 | 547 | 161 | (778) | 14,088 | |||||||||
Net Income (Loss) | $ 51,753 | $ 12,416 | $ (8,042) | $ 2,927 | $ (6,040) | $ 7,251 | $ 5,018 | $ 3,973 | $ 3,713 | $ 33,368 | $ 25,910 | $ 64,169 | $ 1,211 | $ (367) | $ (3,904) | $ 46,072 |
Net Income (Loss) per share to common stockholders: | ||||||||||||||||
Basic | $ 0.91 | $ (0.17) | $ 0.06 | $ (0.13) | $ 0.16 | $ 0.11 | $ 0.08 | $ 0.08 | $ 0.71 | $ 0.26 | $ 1.21 | $ 0.03 | $ (0.01) | $ (0.08) | $ 0.99 | |
Diluted | $ 0.83 | $ (0.17) | $ 0.06 | $ (0.13) | $ 0.15 | $ 0.10 | $ 0.08 | $ 0.08 | $ 0.71 | $ 0.26 | $ 1.12 | $ 0.02 | $ (0.01) | $ (0.08) | $ 0.96 | |
Shares used for computation: | ||||||||||||||||
Basic | 57,156,159 | 46,805,950 | 100,000,000 | 52,850,041 | 46,805,950 | 46,700,990 | 46,806,042 | 46,773,038 | ||||||||
Diluted | 61,982,441 | 46,805,950 | 100,000,000 | 57,403,593 | 48,243,146 | 46,700,990 | 46,806,042 | 47,909,413 | ||||||||
Passenger | ||||||||||||||||
Operating Revenues: | ||||||||||||||||
Operating Revenues | $ 125,130 | $ 31,341 | $ 172,897 | $ 229,325 | $ 209,827 | $ 335,824 | $ 359,232 | $ 688,833 | ||||||||
Cargo | ||||||||||||||||
Operating Revenues: | ||||||||||||||||
Operating Revenues | 22,098 | 3,219 | 43,684 | 3,219 | 36,809 | |||||||||||
Other | ||||||||||||||||
Operating Revenues: | ||||||||||||||||
Operating Revenues | $ 1,961 | $ 816 | $ 24,555 | $ 3,793 | $ 2,660 | $ 49,107 | $ 5,445 | $ 12,551 |
CONDENSED CONSOLIDATED STATEM_2
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY - USD ($) | Warrants | Common Stock | Loans to Stockholders | APIC | Retained Earnings (Deficit) | Total |
Balances, at Beginning of period at Dec. 31, 2017 | $ 34,422,000 | |||||
Balances, at Beginning of period (in shares) at Dec. 31, 2017 | 100,000,000 | |||||
Stockholder's Equity | ||||||
Net Income (Loss) | $ 25,910,000 | |||||
Balances, at End of period at Apr. 10, 2018 | $ 49,783,000 | |||||
Balances, at End of period (in shares) at Apr. 10, 2018 | 100,000,000 | |||||
Balances, at Beginning of period at Dec. 31, 2017 | $ 34,422,000 | |||||
Balances, at Beginning of period (in shares) at Dec. 31, 2017 | 100,000,000 | |||||
Stockholder's Equity | ||||||
Initial Public Offering Expense Adjustment (in shares) | 1,416,645 | |||||
Balances, at End of period at Dec. 31, 2018 | $ 239,141,000 | $ (3,500,000) | $ 373,000 | $ (367,000) | $ 235,647,000 | |
Balances, at End of period (in shares) at Dec. 31, 2018 | 40,005,885 | 6,743,400 | ||||
Balances, at Beginning of period at Apr. 10, 2018 | $ 49,783,000 | |||||
Balances, at Beginning of period (in shares) at Apr. 10, 2018 | 100,000,000 | |||||
Stockholder's Equity | ||||||
Initial Public Offering Expense Adjustment | $ 7,500,000 | (3,500,000) | $ 4,000,000 | |||
Initial Public Offering Expense Adjustment (in shares) | 1,416,645 | |||||
Net Income (Loss) | (367,000) | (367,000) | ||||
Stock-based Compensation | 373,000 | 373,000 | ||||
Balances, at End of period at Dec. 31, 2018 | $ 239,141,000 | (3,500,000) | 373,000 | (367,000) | 235,647,000 | |
Balances, at End of period (in shares) at Dec. 31, 2018 | 40,005,885 | 6,743,400 | ||||
Stockholder's Equity | ||||||
Initial Public Offering Expense Adjustment (in shares) | 56,665 | |||||
Net Income (Loss) | 46,072,000 | 46,072,000 | ||||
Amazon Warrants | 3,594,000 | 3,594,000 | ||||
Stock-based Compensation | 1,888,000 | 1,888,000 | ||||
Balances, at End of period at Dec. 31, 2019 | $ 68,000 | (3,500,000) | 244,928,000 | 42,228,000 | 283,724,000 | |
Balances, at End of period (in shares) at Dec. 31, 2019 | 40,005,885 | 6,800,065 | ||||
Stockholder's Equity | ||||||
Exercise of Apollo Warrants | $ 400,000 | (379,000) | 21,000 | |||
Exercise of Apollo Warrants (in shares) | (40,005,885) | 40,005,885 | ||||
Net Income (Loss) | 7,251,000 | 7,251,000 | ||||
Stock-based Compensation | 369,000 | 369,000 | ||||
Balances, at End of period at Mar. 31, 2020 | $ 468,000 | (3,500,000) | 244,918,000 | 49,479,000 | 291,365,000 | |
Balances, at End of period (in shares) at Mar. 31, 2020 | 46,805,950 | |||||
Balances, at Beginning of period at Dec. 31, 2019 | $ 68,000 | (3,500,000) | 244,928,000 | 42,228,000 | 283,724,000 | |
Balances, at Beginning of period (in shares) at Dec. 31, 2019 | 40,005,885 | 6,800,065 | ||||
Stockholder's Equity | ||||||
Net Income (Loss) | 1,211,000 | |||||
Balances, at End of period at Jun. 30, 2020 | $ 468,000 | (3,500,000) | 245,306,000 | 43,439,000 | 285,713,000 | |
Balances, at End of period (in shares) at Jun. 30, 2020 | 46,805,950 | |||||
Balances, at Beginning of period at Dec. 31, 2019 | $ 68,000 | (3,500,000) | 244,928,000 | 42,228,000 | 283,724,000 | |
Balances, at Beginning of period (in shares) at Dec. 31, 2019 | 40,005,885 | 6,800,065 | ||||
Stockholder's Equity | ||||||
Exercise of Apollo Warrants | $ 21,000 | 21,000 | ||||
Exercise of Apollo Warrants (in shares) | (40,005,885) | 40,005,885 | ||||
Net Income (Loss) | (3,904,000) | (3,904,000) | ||||
Amazon Warrants | 1,866,000 | |||||
Stock-based Compensation | $ 33,709 | 2,110,000 | ||||
Balances, at End of period at Dec. 31, 2020 | $ 468,000 | (3,500,000) | 248,525,000 | 38,324,000 | 283,817,000 | |
Balances, at End of period (in shares) at Dec. 31, 2020 | 46,839,659 | |||||
Balances, at Beginning of period at Mar. 31, 2020 | $ 468,000 | (3,500,000) | 244,918,000 | 49,479,000 | 291,365,000 | |
Balances, at Beginning of period (in shares) at Mar. 31, 2020 | 46,805,950 | |||||
Stockholder's Equity | ||||||
Net Income (Loss) | (6,040,000) | (6,040,000) | ||||
Stock-based Compensation | 388,000 | 388,000 | ||||
Balances, at End of period at Jun. 30, 2020 | $ 468,000 | (3,500,000) | 245,306,000 | 43,439,000 | 285,713,000 | |
Balances, at End of period (in shares) at Jun. 30, 2020 | 46,805,950 | |||||
Balances, at Beginning of period at Dec. 31, 2020 | $ 468,000 | (3,500,000) | 248,525,000 | 38,324,000 | 283,817,000 | |
Balances, at Beginning of period (in shares) at Dec. 31, 2020 | 46,839,659 | |||||
Stockholder's Equity | ||||||
Shares Surrendered by Stockholders | $ (1,000) | 3,500,000 | (3,499,000) | |||
Shares Surrendered by Stockholders (in shares) | (140,737) | |||||
Initial Public Offering Expense Adjustment | $ 105,000 | 224,552,000 | 224,657,000 | |||
Initial Public Offering Expense Adjustment (in shares) | 10,454,545 | |||||
Net Income (Loss) | 12,416,000 | 12,416,000 | ||||
Income Tax Receivable Agreement | (115,200,000) | (115,200,000) | ||||
Amazon Warrants | 1,400,000 | 1,400,000 | ||||
Stock-based Compensation | 2,870,000 | 2,870,000 | ||||
Balances, at End of period at Mar. 31, 2021 | $ 572,000 | 473,848,000 | (64,460,000) | 409,960,000 | ||
Balances, at End of period (in shares) at Mar. 31, 2021 | 57,153,467 | |||||
Balances, at Beginning of period at Dec. 31, 2020 | $ 468,000 | $ (3,500,000) | 248,525,000 | 38,324,000 | 283,817,000 | |
Balances, at Beginning of period (in shares) at Dec. 31, 2020 | 46,839,659 | |||||
Stockholder's Equity | ||||||
Net Income (Loss) | 64,169,000 | |||||
Balances, at End of period at Jun. 30, 2021 | $ 572,000 | 476,368,000 | (12,707,000) | 464,233,000 | ||
Balances, at End of period (in shares) at Jun. 30, 2021 | 57,158,467 | |||||
Balances, at Beginning of period at Mar. 31, 2021 | $ 572,000 | 473,848,000 | (64,460,000) | 409,960,000 | ||
Balances, at Beginning of period (in shares) at Mar. 31, 2021 | 57,153,467 | |||||
Stockholder's Equity | ||||||
Initial Public Offering Expense Adjustment | 349,000 | 349,000 | ||||
Exercise of Stock Options | 27,000 | 27,000 | ||||
Exercise of Stock Options (in shares) | 5,000 | |||||
Net Income (Loss) | 51,753,000 | 51,753,000 | ||||
Amazon Warrants | 1,400,000 | 1,400,000 | ||||
Stock-based Compensation | 744,000 | 744,000 | ||||
Balances, at End of period at Jun. 30, 2021 | $ 572,000 | $ 476,368,000 | $ (12,707,000) | $ 464,233,000 | ||
Balances, at End of period (in shares) at Jun. 30, 2021 | 57,158,467 |
CONDENSED CONSOLIDATED STATEM_3
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2021 | Jun. 30, 2020 | |
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS | ||
Net Income | $ 64,169 | $ 1,211 |
Adjustments to reconcile Net Income to Cash from Operating Activities: | ||
Depreciation and Amortization | 26,075 | 22,702 |
Tax Receivable Agreement Adjustment | (18,700) | |
Reduction in Operating Lease Right-of-use Assets | 9,419 | 13,585 |
Non-Cash (Gain) Loss on Asset Transactions, net | (12,668) | 381 |
Unrealized (Gain) Loss on Fuel Derivatives | (3,599) | 16,056 |
Amortization of Over-market Liabilities | (3,081) | (5,781) |
Deferred Income Taxes | 14,875 | 570 |
Amazon Warrants Vested | 2,800 | |
Stock-based Compensation Expense | 3,613 | 757 |
Amortization of Debt Issuance Costs | 1,911 | 903 |
Changes in Operating Assets and Liabilities: | ||
Accounts Receivable | 4,265 | 3,406 |
Inventory | (224) | (596) |
Prepaid Expenses | (6,446) | (797) |
Lessor Maintenance Deposits | (3,220) | (6,946) |
Aircraft Lease Deposits | 1,496 | 1,290 |
Other Assets | 1,294 | (3,033) |
Accounts Payable | 3,546 | (13,144) |
Accrued Transportation Taxes | 7,024 | (11,779) |
Air Traffic Liabilities | 12,695 | (20,587) |
Loyalty Program Liabilities | (1,192) | (775) |
Reduction in Operating Lease Obligations | (15,826) | (9,718) |
Other Liabilities | 1,615 | (600) |
Net Cash Provided by (Used in) Operating Activities | 89,841 | (12,895) |
Cash Flows from Investing Activities: | ||
Purchases of Property & Equipment | (66,736) | (93,677) |
Purchase of Investments | (1,436) | (190) |
Proceeds from the Sale of Investments | 984 | 227 |
Net Cash Used in Investing Activities | (67,188) | (93,640) |
Cash Flows from Financing Activities: | ||
Cash Received from Stock Offering | 235,894 | |
Costs of Stock Offering | (8,669) | |
Proceeds from Stock Option and Warrant Exercises | 26 | 21 |
Proceeds from Borrowings | 80,500 | 220,307 |
Repayment of Finance Lease Obligations | (7,864) | (85,976) |
Repayment of Borrowings | (74,709) | (54,879) |
Debt Issuance Costs | (2,709) | (2,764) |
Net Cash Provided by Financing Activities | 222,469 | 76,709 |
Net Increase (Decrease) in Cash, Cash Equivalents and Restricted Cash | 245,122 | (29,826) |
Cash, Cash Equivalents and Restricted Cash-Beginning of the Period | 70,363 | 64,478 |
Cash, Cash Equivalents and Restricted Cash-End of the Period | 315,485 | 34,652 |
Supplemental information: | ||
Cash Payments for Interest | 11,040 | 10,115 |
Cash Payments (Receipts) for Income Taxes, net | 40 | (22) |
Lease Deposits Applied Against the Purchase of Aircraft | 3,296 | |
Aircraft and Flight Equipment Acquired through Finance Leases | 42,911 | |
Purchases of Property & Equipment in Accounts Payable | $ 555 | |
Costs of Stock Offering in Accounts Payable | $ 38 |
CONDENSED CONSOLIDATED STATEM_4
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Parentheticals) - USD ($) $ in Thousands | Jun. 30, 2021 | Dec. 31, 2020 | Jun. 30, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | Apr. 10, 2018 | Dec. 31, 2017 |
Reconciliation of Cash, Cash Equivalents and Restricted Cash | |||||||
Cash and Equivalents | $ 310,723 | $ 62,028 | $ 32,084 | $ 51,006 | $ 29,600 | ||
Restricted Cash | 4,762 | 8,335 | 2,568 | 13,472 | 13,841 | $ 8,308 | |
Total Cash, Cash Equivalents and Restricted Cash | $ 315,485 | $ 70,363 | $ 34,652 | $ 64,478 | $ 43,441 | $ 8,308 | $ 16,999 |
COMPANY BACKGROUND_2
COMPANY BACKGROUND | 6 Months Ended | 12 Months Ended |
Jun. 30, 2021 | Dec. 31, 2020 | |
COMPANY BACKGROUND | ||
COMPANY BACKGROUND | 1. COMPANY BACKGROUND Sun Country Airlines Holdings, Inc. is the parent company of Sun Country, Inc., which is a certificated air carrier providing scheduled passenger service, air cargo service, charter air transportation and related services. Services are provided to the general public, cargo customers, military branches, wholesale tour operators, individual entities, schools and companies for air transportation to various U.S. and international destinations. Except as otherwise stated, the financial information, accounting policies, and activities of Sun Country Airlines Holdings, Inc. are referred to as those of the Company (the “Company” or “Sun Country”). Stock Split In March 2021, the Company effected an approximately 18.8886 for 1 stock split of its common stock (the “Stock Split”), with exercise prices for outstanding warrants and options adjusted accordingly by dividing such prices by the Stock Split ratio. The par value of the common stock was not adjusted as a result of the Stock Split. As a result of the Stock Split, the Company issued an additional 44,226,587 shares of common stock. All references to common stock, warrants to purchase common stock, stock options, per share amounts and related information contained in the accompanying Condensed Consolidated Financial Statements and applicable disclosures have been retroactively adjusted to reflect the effect of the Stock Split for all periods. Approval of the Omnibus Incentive Plan In March 2021, the stockholders approved the Sun Country Airlines Holdings, Inc. 2021 Omnibus Incentive Plan (the “Plan”). The Plan authorizes that no more than 3,600,000 shares of Common Stock may be delivered in the aggregate pursuant to Awards granted under the Plan. An “Award” means any Incentive Stock Option, Nonqualified Stock Option, Stock Appreciation Right, Restricted Stock, Restricted Stock Unit, Other Stock-Based Award, or Other Cash-Based Award granted under the Plan. Upon implementation of this new Plan, there were no more grants under the October 2018 equity incentive plan. Awards already issued under the 2018 plan are not impacted by the new Plan. Initial Public Offering of Common Stock and Other Stock Sales On March 16, 2021, the Company priced its initial public offering of 9,090,909 shares of common stock to the public at $24.00 per share. The stock began trading on the NASDAQ on March 17, 2021 under the symbol SNCY. The underwriters had an option to purchase an additional 1,363,636 shares from the Company at the public offering price, which they exercised. In total, all 10,454,545 shares were issued on March 19, 2021 and the net proceeds to the Company were $225,006 after deducting underwriting discounts and commissions, and other offering expenses. Concurrently with the closing of the initial public offering, SCA Horus Holdings, LLC, an affiliate of investment funds managed by affiliates of Apollo Global Management (the “Apollo Stockholder”), also completed a concurrent private placement in which the Apollo Stockholder sold 2,216,312 and 2,216,308 shares of common stock to PAR Investment Partners, L.P. and certain funds or accounts managed by an investment adviser subsidiary of Blackrock, Inc., respectively. Each of the two sales In May 2021, the Apollo Stockholder sold 7,250,000 shares of the Company’s common stock at a public offering price of $34.50 per share. The underwriters in this offering exercised their option to purchase an additional 1,087,500 shares at the public offering price, bringing the total offering to 8,337,500 shares. The Company incurred offering expenses of $640 and did not receive any of the proceeds from the offering. All proceeds went to the Apollo Stockholder. 1. COMPANY BACKGROUND (continued) Amazon Agreement On December 13, 2019, the Company signed a six-year contract (with two, two-year extension options, for a maximum term of 10 years) with Amazon.com Services, Inc. (together with its affiliates, “Amazon”) to provide cargo services under an Air Transportation Services Agreement (the “ATSA”). The agreement is structured for the Company to provide crew, maintenance, and insurance (“CMI”) services to Amazon. Sun Country began flying for Amazon in May 2020. On June 27, 2020, Amazon and the Company signed an amendment to the December 2019 agreement that increased the number of aircraft Sun Country operates from 10 to 12. In December 2019, in connection with the ATSA, the Company issued warrants to Amazon to purchase an aggregate of up to 9,482,606 shares of common stock at an exercise price of approximately $15.17 per share. The exercise period of these warrants is through the eighth anniversary of the issue date. Of the 9,482,606 total Amazon warrants issued, 632,183 vested upon execution of the ATSA in December 2019. Thereafter, an additional 63,217 warrants will vest for each milestone of $8,000 in qualifying payments made by Amazon to the Company. During the three and six months ended June 30, 2021, 189,652 and 379,304 warrants vested, respectively. The cumulative warrants vested as of June 30, 2021 were 1,264,356. No warrants vested during the six months ended June 30, 2020. | 1. COMPANY BACKGROUND Sun Country Airlines Holdings, Inc. f/k/a SCA Acquisition Holdings, LLC (the “Successor”) was formed on December 8, 2017 by funds managed by affiliates of Apollo Global Management (“Apollo”) for the purpose of purchasing (the “Acquisition”) Sun Country, Inc. d/b/a Sun Country Airlines (the “Predecessor”). Sun Country, Inc. f/k/a MN Airlines, LLC is a privately-owned certified air carrier providing scheduled passenger service, air cargo service, charter air transportation and related services. Except as otherwise stated, the financial information, accounting policies, and activities of Sun Country Airlines are referred to as those of the Company (the “Company”, “SCA” or “Sun Country”). On April 11, 2018 (the “Acquisition Date”), SCA Acquisition Holdings, LLC acquired 100 percent of MN Airlines’ stockholder equity. The Acquisition was accounted for as a business combination using the purchase method of accounting, which requires, among other things, that assets acquired and liabilities assumed be recognized on the balance sheet at their fair value as of the Acquisition Date. Reorganization Transactions On January 31, 2020, all 40,005,885 outstanding Apollo Warrants were exercised to purchase common stock of SCA Acquisition Holdings, LLC. Also on January 31, 2020, SCA Acquisition Holdings, LLC was converted into a Delaware corporation pursuant to a statutory conversion and changed its name to Sun Country Airlines Holdings, Inc. In connection with the conversion to a corporation, all of the outstanding shares of SCA Acquisition Holdings, LLC common stock with a $0.01 par value were converted into shares of Sun Country Airlines Holdings, Inc. common stock. The outstanding warrants held by Amazon to purchase shares of SCA Acquisition Holdings, LLC common stock were converted into warrants to purchase shares of Sun Country Airlines Holdings, Inc. common stock and all of the outstanding options to purchase shares of SCA Acquisition Holdings, LLC common stock were converted into options to purchase shares of Sun Country Airlines Holdings, Inc. common stock. Amazon Agreement On December 13, 2019, the Company signed a six-year contract (with two, two-year extension options, for a maximum term of 10 years) with Amazon.com Services, Inc. (together with its affiliates, “Amazon”) to provide air cargo services (“Amazon Agreement”). The option to renew the Amazon Agreement for two additional two-year terms is at Amazon’s sole discretion, subject to Amazon providing Sun Country with at least 180 days’ prior written notice before the expiration of the then-current term. Sun Country began flying for Amazon in the second quarter of 2020. On June 27, 2020, Amazon and the Company signed an amendment to the December 13, 2019 agreement that added two aircraft. As of December 31, 2020, Sun Country operates 12 Boeing 737-800 cargo aircraft for Amazon. Amazon supplies the aircraft and reimburses the Company for certain operating expenses, including fuel and heavy maintenance. The aircraft fly under the Company’s air carrier operating certificate and the Company supplies the crew, non-heavy maintenance and insurance for the aircraft. Amazon pays a fixed monthly fee per aircraft as well as a set rate per flight cycle and block hour flown. 1. COMPANY BACKGROUND (continued) In December 2019, in connection with the Amazon Agreement, the Company issued warrants to Amazon to purchase an aggregate of up to 9,482,606 shares of common stock at an exercise price of approximately $15.17 per share, which represented approximately 15% of the Company’s common stock on that date. The exercise period of these warrants is through the eighth anniversary of the issue date. The Amazon warrants were valued at $7.38 per share. The fair value of the warrants was determined using a Monte Carlo simulation which involves inputs such as expected volatility, the risk-free rate of return and the probability of achieving varying outcomes under the Amazon Agreement. The fair value of warrants that are expected to vest in the future will be recorded as contra-revenue over the vesting term of the warrants on a pro-rata basis as the flights occur. For so long as Amazon holds these warrants or any shares of common stock issued upon exercise of the warrants and the Amazon Agreement remains in effect, Amazon will have the right to nominate a member or an observer to SCA’s board of directors. Of the 9,482,606 total Amazon warrants issued, 632,183 vested upon execution of the Amazon Agreement on December 13, 2019. Thereafter, an additional 63,217 warrants will vest for each milestone of $8 million in payments made by Amazon to the Company, excluding reimbursable and direct pass-through expenses. During the year ended December 31, 2020, 252,869 warrants vested. |
BASIS OF PRESENTATION
BASIS OF PRESENTATION | 6 Months Ended | 12 Months Ended |
Jun. 30, 2021 | Dec. 31, 2020 | |
BASIS OF PRESENTATION | ||
BASIS OF PRESENTATION | 2. BASIS OF PRESENTATION The accompanying unaudited Condensed Consolidated Financial Statements of Sun Country Airlines Holdings, Inc. should be read in conjunction with the consolidated financial statements contained in the Company’s Annual Report for the year ended December 31, 2020, which is included in the Company’s Final Prospectus dated March 16, 2021. During the six months ended June 30, 2021, there were no significant changes to the Company’s critical accounting policies. Certain prior period Stockholders’ Equity amounts were reclassified to conform to the current period presentation. This involved reducing the Common Stock values to $0.01 times the shares outstanding and reclassifying those dollars to Additional Paid-In Capital. These reclasses were $238,694 as of December 31, 2020, June 30, 2020 and March 31, 2020. The reclass as of December 31, 2019 was $239,073. Management believes that all adjustments necessary for the fair presentation of results, consisting of normally recurring items, have been included in the unaudited Condensed Consolidated Financial Statements for the interim periods presented. All material intercompany balances and transactions have been eliminated in consolidation. The preparation of financial statements in accordance with accounting principles generally accepted in the United States (“GAAP”) requires management to make certain estimates and assumptions that affect the reported amounts of assets and liabilities, revenues and expenses, and the disclosure of contingent assets and liabilities at the date of the financial statements. Actual results could differ from those estimates. Significant areas of judgment relate to passenger revenue recognition, maintenance under the built-in overhaul method, equity-based compensation, tax receivable agreement, lease accounting, impairment of goodwill, impairment of long-lived and intangible assets, air traffic liabilities, the loyalty program, as well as the valuation of Amazon warrants. Due to severe impacts from the global coronavirus (“COVID-19”) pandemic, seasonal variations in the demand for air travel, the volatility of aircraft fuel prices and other factors, operating results for the three and six months ended June 30, 2021 are not necessarily indicative of operating results for future quarters or for the year ended December 31, 2021. Air travel is also significantly impacted by general economic conditions, the amount of disposable income available to consumers, unemployment levels, corporate travel budgets, extreme or severe weather and natural disasters, disease outbreaks, fears of terrorism or war, and other factors beyond the Company’s control. 2. BASIS OF PRESENTATION (continued) The Company operates its fiscal year on a calendar year basis. Recently Adopted Accounting Standards Income Taxes - Simplifying the Accounting for Income Taxes— Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes | 2. BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Principles of Consolidation— The Company operates its fiscal year on a calendar year basis. Use of Estimates— Change in Presentation— A summary of significant accounting policies consistently applied in the preparation of the accompanying financial statements is as follows: Cash and Equivalents— 2. BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) Restricted Cash— Investments— Accounts Receivable— January 1, 2018 Lessor Maintenance Deposits— Maintenance reserve payments that are expected to be recoverable via reimbursable expenses are reflected as Lessor Maintenance Deposits on the accompanying Consolidated Balance Sheets. These deposits are expected to be reimbursed to SCA upon performance of maintenance activities. Upon completion of the maintenance event, the lessor is billed and the amount due is recorded in Account Receivable. Amounts not deemed probable of recovery are expensed as incurred. At the Acquisition Date, the Company established a contra-asset to represent the Company’s obligation to perform planned maintenance events on leased aircraft held as of the Acquisition Date. As reimbursable maintenance events are performed and maintenance expense is incurred, the contra-asset is recognized as a reduction to Maintenance expense. The Company’s lease agreements entered into subsequent to the Acquisition Date are structured to allow SCA to access and recover the unused maintenance reserve payments. As such, maintenance reserve payments related to these lease agreements are expected to be recovered in full and are reflected as Lessor Maintenance Deposits on the accompanying Consolidated Balance Sheets. Maintenance reserve payments related to seasonal aircraft are expensed when incurred. Inventory— 2. BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) Property & Equipment— Airframes 10 Engines—Core 7 Engines—Initial Greentime (time remaining until the first scheduled major maintenance event) 1st scheduled maintenance event Leasehold Improvements, Aircraft, other 3 Office and Ground Equipment 5 Computer Hardware and Software 3 Property and Equipment under Finance Leases 3 Rotable Parts 6 Modifications that enhance the operating performance or extend the useful lives of leased airframes are considered leasehold improvements and are capitalized and depreciated over the economic life of the asset or the term of the lease, whichever is shorter. Similar modifications made to owned aircraft are capitalized and depreciated consistent with the Company’s policy. The Company capitalizes certain internal and external costs associated with the acquisition and development of internal-use software for new products, and enhancements to existing products, that have reached the application development stage and meet recoverability tests. Capitalized costs include external direct costs of materials and services utilized in developing or obtaining internal-use software, and labor cost for employees who are directly associated with, and devote time, to internal-use software projects. Finance leases are recorded at net present value of future minimum lease payments. The Company depreciates Rotable Parts to an estimated residual value using the pooling life method. Depreciation under the pooling life method is calculated over the estimated average useful life of the related aircraft. Evaluation of Long-Lived Assets— April 11, 2018 January 1, 2018 Equity Incentive Plan— Stockholders’ Equity— In conjunction with the issuance of 1,416,645 shares of Common Stock in 2018 to two stockholders, the Company issued, recourse promissory notes of $3,500 which are included as Loans to Stockholders on the Consolidated Statements of Changes in Stockholders’ Equity. In February of 2021, the promissory notes were repaid in full with equivalent shares of stock. 2. BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) As of December 31, 2020, Amazon held approximately 885,052 vested warrants to acquire common stock of the Company at an exercise price of approximately $15.17 per share. Deferred Offering Costs— Goodwill and Other Intangible Assets— The value of Goodwill and Other Indefinite-lived Intangible Assets is assessed under either a qualitative or quantitative approach. Under a qualitative approach, SCA considers various market factors, including certain key assumptions, such as the market value of other airlines, fuel prices, the overall economy, passenger yields and changes to the regulatory environment. SCA analyzes these factors to determine if events and circumstances have affected the fair value of Goodwill and Other Indefinite-lived Intangible Assets. If it is determined that it is more likely than not that the asset may be impaired, the Company uses a quantitative approach to determine the reporting unit or intangible asset’s fair value incorporating the key assumptions listed below. An impairment charge is recorded for the amount of carrying value that exceeds the determined fair value as of the testing date. When the Company evaluates Goodwill for impairment using a quantitative approach, the Company estimates the fair value of the consolidated reporting unit by considering both comparable public company multiples (a market approach) and projected discounted future cash flows (an income approach). When the Company performs a quantitative impairment assessment of indefinite-lived intangible assets, fair value is estimated based on (1) recent market transactions, where available, (2) the royalty method for the Sun Country tradename (which assumes hypothetical royalties generated from using SCA’s tradename) or (3) projected discounted future cash flows (an income approach). The Company performed its most recent annual Goodwill and Other Indefinite-Lived Intangible Assets impairment analysis as of October 1, 2020 and did not recognize any impairment losses for the years ended December 31, 2020 or 2019 or for the periods April 11, 2018 to December 31, 2018 and January 1, 2018 to April 10, 2018. See Note 3—Impact of the COVID-19 Pandemic. Long-term Debt— Revenue Recognition— The Company initially defers ticket sales as an air traffic liability and recognizes revenue when the passenger flight occurs. Unused non-refundable tickets expire at the date of scheduled travel and are recorded as revenue unless the customer notifies the Company in advance of such date that the customer will not travel. If notification is made, a travel credit is created for the face value less applicable change fees. Travel credits can be redeemed toward future travel for up to 12 months after the date of the original booking. A portion of travel credits will expire unused. The Company records an estimate for travel credits that will expire unused in passenger revenue. These estimates are based on historical experience of travel credit activity and consider other facts, such as recent program changes and modifications that could affect the ultimate usage patterns of tickets and travel credits. Due to inherent uncertainly of the current operating environment as a result of COVID-19, adjustments to these estimates could be material in the future. 2. BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) Ancillary revenue for baggage fees, seat selection fees, and on-board sales is recognized when the associated flight occurs. Prior to adoption of the new revenue recognition model effective January 1, 2019, the Company recognized revenue for change fees as the transactions occurred. Under the new standard, revenue for change fees is deferred and recognized when the passenger travel is provided. Fees received in advance of the flight date are initially recorded as an air traffic liability. Charter revenue is recognized at the time of departure when transportation is provided. Cargo revenue is typically recognized based on hours flown, number of flights, and the amount of aircraft resources provided during a reporting period. Pursuant to ASC 606, Revenue from Contracts with Customers, the Amazon Agreement contains three performance obligations: Flight Services, Heavy Maintenance and Fuel. As Sun Country is the principal in providing Flight Services, revenue and related costs are recognized gross on the Statement of Operations. Sun Country acts as the agent in providing the Heavy Maintenance and Fuel performance obligations, which are reimbursed by Amazon based on the actual costs incurred. Consumption of aircraft fuel and heavy maintenance are recognized in revenue, net of the associated costs incurred to fulfill the performance obligations. The transaction price is allocated to the performance obligations based on their relative standalone selling price. The transaction price for flight services, which includes an upfront payment for startup costs, is reduced by the estimated value of warrants to be issued to Amazon based on expected performance under the Amazon Agreement. Loyalty Program— Co-branded Credit Card Program— Airframe and Engine Maintenance— The Company applies the Built-in Overhaul method for significant maintenance costs of owned airframe and engines. Under this method, the value of time remaining until the first scheduled major maintenance event (“greentime”) is capitalized and amortized until that first major maintenance event, assuming no residual value. In addition, the value in excess of the greentime is capitalized and amortized over the useful life. These expenses are reported as a component of Depreciation and Amortization on the accompanying Consolidated Statements of Operations. The estimated period until the next scheduled major maintenance event is estimated based on assumptions including estimated cycles, hours, and months, required maintenance intervals, and the age/ condition of related parts. Certain SCA aircraft lease agreements contain provisions that require SCA to return aircraft to the lessor in a certain maintenance condition. A liability associated with returning leased aircraft is accrued when incurrence of lease return costs becomes probable. The amount of these costs typically can be estimated near the end of the lease term, after the aircraft has completed its last maintenance cycle prior to being returned. 2. BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) Income Taxes— Concentration Risk— Approximately 57%, 58% and 48% of the Company’s fuel purchases were made from two vendors for the years ended December 31, 2020, 2019 and 2018, respectively. Approximately 52% of the Company’s workforce were under union contracts as of December 31, 2020 with three different unions: Air Line Pilots Association (“ALPA”), International Brotherhood of Teamsters (“IBT”) and Transport Workers Union (“TWU”). Approximately 98% of the Company’s union workforce are under contracts that have expired or will be expiring within a year. The following table shows the Company’s airline employee groups represented by unions: Employee Group Number of Active Employees Represented Union Date on which Collective Bargaining Agreement Becomes Amendable Sun Country Pilots 395 ALPA October 31, 2020 Sun Country Flight Attendants 466 IBT December 31, 2019 Sun Country Dispatchers 22 TWU November 30, 2024 Recently Adopted Accounting Standards Revenue from Contracts with Customers— Revenue from Contracts with Customers The adoption of the New Revenue Standard impacts the Company’s accounting for outstanding loyalty points earned through travel by SCA loyalty program members. There is no change in accounting for issuances of loyalty points to SCA’s co-branded card partner as those are currently reported in accordance with the New Revenue Standard. Through December 31, 2018, the Company used the incremental cost method to account for the portion of the loyalty program liabilities related to points earned through travel, which were valued based on the estimated incremental cost of carrying one additional passenger. The New Revenue Standard required the Company to change to the deferred revenue method and apply a relative standalone selling price approach whereby a portion of each passenger ticket sale attributable to loyalty points earned is deferred and recognized in passenger revenue upon future redemption. Upon adoption of the New Revenue Standard, the Company reclassified certain ancillary revenues from Other Revenue to Passenger Revenue. In addition, certain fees previously recognized when incurred by the customer are deferred and recognized as revenue when passenger travel is provided. 2. BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) Upon adoption of the standard on January 1, 2019 the Company made an adjustment to reduce Retained Earnings by $3,477. Leases— Leases Upon adoption of the standard on January 1, 2019 the Company recorded an Operating Lease Right-of-use (“ROU”) Asset of $178,577 (net of balance sheet reclassifications) and Operating Lease Liabilities of $204,790 on the Consolidated Balance Sheet. This ROU Asset was net of $27,004 reclassified from Over-market Liabilities and $791 reclassified from Prepaid Rent. Capitalized Software Costs— Intangibles—Goodwill and Other—Internal-Use Software (Subtopic 350-40): Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract Non-employee Share-based Payment Accounting— Improvements to Non-employee Share-based Payment Accounting Compensation—Stock Compensation Compensation—Stock Compensation Revenue from Contracts with Customers (Topic 606) Changes to the Disclosure Requirements for Fair Value Measurement— Fair Value Measurement (Topic 820): Disclosure Framework—Changes to the Disclosure Requirements for Fair Value Measurement Financial Instruments—Credit Losses— Financial Instruments—Credit Losses : Measurement of Credit Losses on Financial Instruments Simplifying the Test for Goodwill Impairment— Simplifying the Test for Goodwill Impairment 2. BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) Recently Issued Accounting Standards Income Taxes - Simplifying the Accounting for Income Taxes— Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes |
IMPACT OF THE COVID19 PANDEMI_6
IMPACT OF THE COVID19 PANDEMIC | 6 Months Ended | 12 Months Ended |
Jun. 30, 2021 | Dec. 31, 2020 | |
IMPACT OF THE COVID19 PANDEMIC | ||
IMPACT OF THE COVID19 PANDEMIC | 3. IMPACT OF THE COVID-19 PANDEMIC On March 11, 2020 the World Health Organization declared COVID-19 a global pandemic causing a massive market disruption to the aviation industry. While U.S. domestic passenger volumes have increased to date, those levels are still down when compared to the same time frame in 2019. The growth in the U.S. domestic air traffic since the trough in April 2020 has been led by leisure and visiting family and relatives (“VFR”) travelers as business travel remains more subdued with corporate workforces continuing to “work-from-home” and in-person meetings continuing to be conducted via videoconferencing and other virtual channels. Equity research analysts and other industry executives believe that the positive trends in leisure and VFR travel will continue as COVID-19 vaccines continue to become more widely distributed in 2021. COVID-19 vaccines have become widely available in the US according to the Centers for Disease Control and Prevention (“the CDC”). The initial beneficiaries of the travel rebound are expected to be leisure and VFR focused Low-Cost Carriers (“LCCs”) and Ultra Low-Cost Carriers (“ULCCs”), while the more international and business travel exposed legacy network airlines are expected to lag behind. As COVID-19 has spread globally, many countries have imposed strict international travel restrictions. The U.S. market has recovered markedly faster than most other countries as a result of widespread vaccine distribution igniting the leisure travel recovery. However, given the uncertainty regarding COVID-19 variants, including but not limited to the Delta variant, the demand recovery may be impacted in both international and domestic travel. Since the beginning of the COVID-19 pandemic, the air cargo market has experienced solid growth both in terms of volumes and yields. While the pandemic has caused a worldwide economic recession, e-commerce has thrived due to a variety of factors such as consumers being unable or unwilling to visit brick-and-mortar stores due to social distancing, which translated into an acceleration of secular growth in e-commerce. Air cargo operators have been in a unique position to meet e-commerce demands that require a high level of speed, reliability and security. Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”) On March 27, 2020, the CARES Act was passed by the U.S. Government. The provisions in the act provide for economic relief to eligible individuals and businesses affected by COVID-19. As a provider of scheduled passenger service, air cargo service, charter air transportation and related services, the Company is eligible for and has received certain benefits outlined in the CARES Act including but not limited to payroll tax breaks, government grants and government loans. 3. IMPACT OF THE COVID-19 PANDEMIC (continued) The grant amount Further, in the second quarter, the Company received a grant of $34,547 under the American Rescue Plan Act of 2021 (“PSP3”) which was enacted on March 11, 2021, and authorizes Treasury to provide additional assistance to passenger air carriers and contractors that received financial assistance under the CARES Act. The grant amount recognized under PSP3 of $34,547 was recorded in Special Items, net during the second quarter. The CARES Act provides an employee retention credit (“CARES Employee Retention Credit”) which is a refundable tax credit against certain employment taxes. During the year ended December 31, 2020, the Company recorded $2,328 related to the CARES Employee Retention Credit within Special Items, net. In the first and second quarters of 2021, an additional $334 and $446, respectively, was recognized within Special Items, net. Under the CARES Act Loan Program, the Company received a $45,000 loan (the “CARES Act Loan”) from the Treasury on October 26, 2020, which was repaid in full on March 24, 2021. In accordance with any grants and/or loans received under the CARES Act, the Company is required to comply with the relevant provisions of the CARES Act and the related implementing agreements which, among other things, include the following: the requirement to use the Payroll Support Payments exclusively for the continuation of payment of crewmember and employee wages, salaries and benefits; the requirement that certain levels of commercial air service be maintained until March 1, 2021, or if ordered by the DOT, March 1, 2022; the prohibitions on share repurchases of listed securities and the payment of common stock (or equivalent) dividends until September 30, 2022; and restrictions on the payment of certain executive compensation until April 1, 2023. | 3. IMPACT OF THE COVID-19 PANDEMIC In December 2019, a novel strain of COVID-19 was reported in Wuhan, China. COVID-19 has since spread to almost every country in the world, including the United States. On March 11, 2020, the World Health Organization declared COVID-19 to constitute a “Public Health Emergency of International Concern” and the U.S. federal government declared COVID-19 a “National Emergency.” All major U.S. passenger airlines were negatively impacted by the declining demand environment resulting from the COVID-19 pandemic. The U.S. Department of State has issued international travel advisories and restrictions and the U.S. federal government has also implemented enhanced screenings and quarantine requirements in connection with the outbreak. In addition, the U.S. Centers for Disease Control has issued travel advisories for domestic travel within the United States. Certain Latin American countries where the Company operates scheduled passenger service have also restricted travel to residents only. Accordingly, the Company experienced a decline in flight bookings and an increase in cancellations beginning in March 2020, as a result of the outbreak. In addition, the federal government has encouraged social distancing efforts and limits on gathering size. Many popular tourist destinations have been closed, or operations are being curtailed, reducing the demand for leisure air travel. Although flight bookings for the second half of 2020 improved compared to the first half of 2020, they remain significantly below the prior year. The timing and pace of the recovery are uncertain as certain markets have reopened, some of which have since experienced a resurgence of COVID-19 cases, while others, particularly international markets, remain closed or are enforcing extended quarantines for most U.S. residents. Additionally, some states have instituted travel restrictions or advisories for travelers from other states. As of December 31, 2020, there were restrictions in several international countries that did not allow planes from the United States to travel to these countries. Federal, state, and local authorities have at various times instituted measures such as imposing self-quarantine requirements, issuing directives forcing businesses to temporarily close, restricting international air travel, and issuing shelter-in-place and similar orders limiting the movement of individuals. Additionally, certain businesses had restricted non-essential travel for their employees. It is evident that passenger air traffic demand in the foreseeable future will continue to fluctuate in response to fluctuations in COVID-19 reported cases, hospitalizations, deaths, treatment efficacy and the availability of vaccines. The Company’s charter air transportation services have also been impacted due to a decline in international military charter service, the suspension or cancellation of major U.S. professional and college sports, and the voluntary or mandated closing of casinos. In addition, the Company has experienced increased competition for domestic charters as competitors are now offering charter services with otherwise grounded aircraft due to a decline in their passenger service. In response to COVID-19 and the reduced consumer demand, the Company has significantly reduced planned capacity for scheduled and charter services. As the COVID-19 pandemic continues to evolve, the Company’s financial and operational outlook remains subject to change. Despite the pandemic’s impact on the Company’s passenger segment, the Company began providing air cargo service and generating cargo revenues under the Amazon Agreement in the second quarter of 2020 as planned. 3. IMPACT OF THE COVID-19 PANDEMIC (continued) Liquidity assessment as a result of COVID-19 impacts At the onset of the pandemic, the Company identified measures to reduce its operating costs and improve its liquidity position and implemented a temporary reduction of scheduled departures, deferred non-essential capital projects, placed a hiring freeze, and negotiated the deferral of aircraft rent payments. Further, on October 8, 2020, the Company announced the elimination of certain management positions. Based on the foregoing measures that the Company has taken to improve its liquidity position, along with the $62,312 grant received from the United States Department of the Treasury under the Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”), and the $45.0 million CARES Act Loan both received in 2020 the Company currently believes that it has sufficient liquidity to meet its near-term obligations. The extent of the impact of COVID-19 on the Company’s financial performance will depend on future developments, including the duration and spread of the outbreak and related travel advisories and restrictions and traveler sentiment. The impact of COVID-19 on overall demand for air travel is highly uncertain and cannot be predicted at the present time. Impairment Consideration The Company identified the impact of the COVID-19 pandemic on the Company’s operation as an indicator of potential impairment of its long-lived assets, and, as a result, performed an impairment test on its long-lived assets during each quarter of 2020. No impairment charges were recorded during 2020. Also during each quarter of 2020, the Company considered whether the projected financial impact of COVID-19 indicated that the fair value of goodwill and tradename asset may be lower than their carrying values. The Company’s considerations included future operating cash flows, changes in the market capitalization of competitors within the airline industry, and changes in the regulatory environment. Based on the assessments performed, the Company concluded that the assets were recoverable, and no impairment charges were recorded during 2020. CARES Act On March 27, 2020, the CARES Act was passed by the U.S. Government. The provisions in the act provide for economic relief to eligible individuals and businesses affected by COVID-19. As a provider of scheduled passenger service, air cargo service, charter air transportation and related services, the Company is eligible for certain benefits outlined in the CARES Act including but not limited to payroll tax breaks, government grants and government loans. On April 15, 2020, the Company was informed by the United States Department of the Treasury that it would receive a grant of $60,559 under the CARES Act Payroll Support Program. The Company received $20,187 in April 2020, and $10,093 in June, July August September 2020 In connection with the Payroll Support Program, the Company is required to comply with the relevant provisions of the CARES Act, including the requirement that the grant is used exclusively for the continued payment of employee salaries, wages, and benefits, and that the Company refrain from involuntary furloughs of employees or reducing pay rates or benefits through September 30, 2020. The Company must also comply with the provisions prohibiting the repurchase of common stock and the payment of common stock dividends until September 30, 2021, as well as those restricting the payment of certain executive compensation until March 24, 2022. Finally, until March 1, 2022, the Company is required to continue to provide air service to markets served prior to March 1, 2020, to the extent determined reasonable and practicable by the DOT subject to exemptions granted by the DOT to the Company. As of December 31, 2020 and through the date of this report, the Company believes it has complied with the provisions of the Payroll Support Program. 3. IMPACT OF THE COVID-19 PANDEMIC (continued) The CARES Act provides an employee retention credit (“CARES Employee Retention Credit”) which is a refundable tax credit against certain employment taxes of up to five thousand dollars per employee. The credit is equal to 50% of qualified wages paid to employees during a quarter, capped at ten thousand dollars of qualified annual wages through December 31, 2020. The Company qualified for the credit beginning on April 1, 2020. During the year ended December 31, 2020, the Company recorded $2,328 related to the CARES Employee Retention Credit within Special Items, net on the Company’s Consolidated Statements of Operations. The CARES Act also provides for the deferred payment of the employer portion of social security taxes through the end of 2020, with 50% of the deferred amount due December 31, 2021 and the remaining 50% due December 31, 2022. The amount deferred as of December 31, 2020 was $4,138, of which $2,069 is recorded in Accrued Salaries, Wages, and Benefits and $2,069 is recorded in Other Long-term Liabilities on the Company’s Consolidated Balance Sheets. Under the CARES Act Loan Program, the Company received a $45,000 loan from the U.S. Department of the Treasury on October 26, 2020. See Note 9—Debt. On January 22, 2021, the Company was informed by the United States Department of the Treasury that it would receive a grant of $32,208 under the Payroll Support Program Extension (PSP2) under the Consolidated Appropriations Act, 2021 (PSP Extension Law). The Company received $16,104 on February 2, 2021, and anticipates receiving the remaining $16,104 prior to the end of March 2021. All funds provided by the Treasury Department to PSP2 participants may only be used for the continuation of payment of employee salaries, wages, and benefits. |
REVENUE_2
REVENUE | 6 Months Ended | 12 Months Ended |
Jun. 30, 2021 | Dec. 31, 2020 | |
REVENUE | ||
REVENUE | 4. REVENUE Sun Country is a certificated air carrier generating Operating Revenues from Scheduled service, Charter service, Ancillary, Cargo and Other revenue. Scheduled service revenue mainly consists of base fares. Charter service revenue is primarily generated through service provided to the U.S. Department of Defense, collegiate and professional sports teams and casinos. Ancillary revenues consist of revenue earned from air travel-related services such as baggage fees, seat selection fees and on-board sales. Cargo consists of revenue earned from flying cargo aircraft under the ATSA. Other revenue consists primarily of revenue from services in connection with Sun Country Vacation products. The significant categories comprising Operating Revenues are as follows: Three Months Ended June 30, Six Months Ended June 30, 2021 2020 2021 2020 Scheduled service $ 67,073 $ 17,882 $ 121,693 $ 132,110 Charter service 28,898 8,491 54,703 37,718 Ancillary 29,159 4,968 52,929 39,999 Passenger 125,130 31,341 229,325 209,827 Cargo 22,098 3,219 43,684 3,219 Other 1,961 816 3,793 2,660 Total Operating Revenue $ 149,189 $ 35,376 $ 276,802 $ 215,706 4. REVENUE (continued) The Company attributes and measures its Operating Revenue by geographic region as defined by the Department of Transportation for airline reporting based upon the origin of each passenger and cargo flight segment. The Company’s operations are highly concentrated in the U.S. but include service to many international locations, primarily based on scheduled service to Latin America during the winter season and on military charter services. Total Operating Revenue by geographic region are as follows: Three Months Ended June 30, Six Months Ended June 30, 2021 2020 2021 2020 Domestic $ 142,774 $ 34,307 $ 262,020 $ 197,345 Latin America 6,266 1,038 14,228 18,114 Other 149 31 554 247 Total Operating Revenue $ 149,189 $ 35,376 $ 276,802 $ 215,706 Contract Balances The Company’s contract assets primarily relate to costs incurred to get the 12 Amazon cargo aircraft ready for service. The balances are included in Other Current Assets and Other Assets on the Condensed Consolidated Balance Sheets. The amount expensed during the three and six months ended June 30, 2021 was $169 and $307, respectively, and is included in Maintenance expense. There was nothing expensed in the six months ended June 30, 2020, since the Amazon cargo services were just getting started. The Company’s significant contract liabilities are comprised of 1) ticket sales for transportation that has not yet been provided (reported as Air Traffic Liabilities on the Condensed Consolidated Balance Sheets), 2) outstanding loyalty points that may be redeemed for future travel and other non-air travel awards (reported as Loyalty Program Liabilities on the Condensed Consolidated Balance Sheets) and 3) the Amazon Deferred Up-front Payment received (reported within Other Liabilities on the Condensed Consolidated Balance Sheets). Contract Assets and Liabilities are as follows: June 30, 2021 December 31, 2020 Contract Assets Costs to fulfill contract with Amazon $ 3,203 $ 3,614 Air Traffic Liabilities $ 113,771 $ 101,075 Loyalty Program Liabilities 20,877 22,069 Amazon Deferred Up-front Payment 4,772 5,240 Total Contract Liabilities $ 139,420 $ 128,384 The balance in the Air Traffic Liabilities fluctuates with seasonal travel patterns. Most tickets can be purchased no more than twelve months in advance, therefore any revenue associated with tickets sold for future travel will be recognized within that timeframe. For the six month period ended June 30, 2021, $82,206 of revenue was recognized in Passenger revenue that was included in the Air Traffic Liabilities as of December 31, 2020. 4. REVENUE (continued) As part of the ATSA executed in December 2019, Amazon paid the Company $10,300 toward start-up costs. Upon signing the ATSA, Amazon received 632,183 fully vested warrants to purchase the Company’s common stock, with a fair value of $4,667. This fair value was assigned to a portion of the $10,300 cash received from Amazon and the remaining $5,633 was recorded in Other Liabilities on the Company's Condensed Consolidated Balance Sheet. This deferred up-front payment is being amortized into revenue on a pro-rata basis over the initial six years of the ATSA. For the three and six months ended June 30, 2021, $237 and $468 was amortized into Cargo revenue, respectively. For each of the three and six months ended June 30, 2020, $38 was amortized into Cargo revenue. Loyalty Program The Sun Country Rewards program provides loyalty awards to program members based on accumulated loyalty points. Loyalty points are earned as a result of travel and purchases using the Company’s co- branded credit card. The balance of the Loyalty Program Liabilities fluctuates based on seasonal patterns, which impact the volume of loyalty points awarded through travel or issued to co-branded credit card and other partners (deferral of revenue) and loyalty points redeemed (recognition of revenue). Changes in the Loyalty Program Liabilities are as follows: 2021 2020 Balance—January 1 $ 22,069 $ 22,892 Loyalty Points Earned 1,904 2,621 Loyalty Points Redeemed (1) (3,096) (3,395) Balance—June 30 $ 20,877 $ 22,118 (1) Principally relates to revenue recognized from the redemption of loyalty points for both air and non-air travel awards. Loyalty points are combined in one homogenous pool and are not separately identifiable. As such, the revenue recognized is comprised of points that were part of the Loyalty Program Liabilities balance at the beginning of the period, as well as points that were earned during the period. The timing of loyalty point redemptions can vary significantly, however most new points, that are not left to expire, are redeemed within two years. Given the inherent uncertainty of the current operating environment due to COVID-19, the Company will continue to monitor redemption patterns and will adjust estimates in the future, which could be material. | 5. REVENUE Sun Country is a certified air carrier generating Operating Revenues from Scheduled service, Charter service, Ancillary, Cargo and Other revenue. Scheduled service revenue mainly consists of base fares. Charter service revenue is primarily generated through service provided to the U.S. Department of Defense, collegiate and professional sports teams and casinos. Ancillary revenues consist of revenue earned from air travel-related services such as baggage fees, seat selection fees and on-board sales. Cargo consists of revenue earned from flying cargo aircraft under the Amazon Agreement. Other revenue consists primarily of revenue from services in connection with Sun Country Vacation products. The significant categories comprising Operating Revenues are as follows: Successor Predecessor Year Ended December 31, For the Period April 11, 2018 to For the Period January 1, 2018 to 2020 2019 December 31, 2018 April 10, 2018 Scheduled service $ 193,047 $ 396,113 $ 224,507 $ 132,234 Charter service 98,130 174,562 111,317 40,663 Ancillary (1) 68,055 118,158 — — Passenger 359,232 688,833 335,824 172,897 Cargo 36,809 — — — Ancillary (1) — — 41,065 15,670 Other 5,445 12,551 8,042 8,885 Total Operating Revenue $ 401,486 $ 701,384 $ 384,931 $ 197,452 (1) The Company attributes and measures its Operating Revenue by geographic region as defined by the DOT for airline reporting based upon the origin of each passenger and cargo flight segment. The Company’s operations are highly concentrated in the U.S. but include service to many international locations, primarily based on scheduled service to Latin America during the winter season and on military charter services. Total Operating Revenue by geographic region are as follows: Successor Predecessor Year Ended December 31, For the Period April 11, 2018 to For the Period January 1, 2018 to 2020 2019 December 31, 2018 April 10, 2018 Domestic $ 382,463 $ 666,332 $ 368,456 $ 173,995 Latin America 18,515 33,716 15,628 23,003 Other 508 1,336 847 454 Total Operating Revenue $ 401,486 $ 701,384 $ 384,931 $ 197,452 Contract Balances The Company’s contract assets primarily relate to costs incurred to get the 12 Amazon cargo aircraft ready for service. The balances are included in Other Current Assets and Other Assets on the Consolidated Balance Sheets. The amount expensed during 2020 was $271 and is included in Maintenance expense. The Company’s significant contract liabilities are comprised of 1) ticket sales for transportation that has not yet been provided (reported as Air Traffic Liabilities on the Consolidated Balance Sheets), 2) outstanding loyalty points that may be redeemed for future travel and other non-air travel awards (reported as Loyalty Program Liabilities on the Consolidated Balance Sheets) and 3) Amazon start-up cost payments received (reported within Other Liabilities on the Consolidated Balance Sheets). 5. REVENUE (continued) Contract Assets and Liabilities are as follows: December 31, 2020 2019 Contract Assets Costs to fulfill contract with Amazon $ 3,614 $ — Air Traffic Liabilities $ 101,075 $ 116,660 Loyalty Program Liabilities 22,069 22,892 Amazon Deferred Start-up Costs Payments Received 5,240 1,633 Total Contract Liabilities $ 128,384 $ 141,185 The balance in the Air Traffic Liabilities fluctuates with seasonal travel patterns. Most tickets can be purchased no more than twelve months in advance, therefore any revenue associated with tickets sold for future travel will be recognized within that timeframe. For the year ended December 31, 2020, $110,868 of revenue was recognized in Passenger Revenue that was included in the Air Traffic Liabilities as of December 31, 2019 and $4,502 in cash refunded to customers, mainly due to COVID-19 related flight cancellations. Of the December 31, 2019 Air Traffic Liabilities remaining as of December 31, 2020, $1,045 relates to COVID-19 extensions and $245 relates to gift certificates. As part of the Amazon Agreement executed in December 2019, Amazon paid the Company $10,300 toward start-up costs, of which $6,300 was received as of December 31, 2019 and the remainder was received in February 2020. Upon signing this agreement, Amazon received 632,183 fully vested warrants to purchase the Company’s common stock, with a fair value of $4,667. This fair value was assigned to a portion of the $10,300 cash received from Amazon and the remaining $5,633 is being amortized into Cargo revenue on a pro-rata basis over the initial six years of the Amazon Agreement. For the year ended December 31, 2020, $393 has been amortized into Cargo revenue. Loyalty Program The Sun Country Rewards program provides loyalty awards to program members based on accumulated loyalty points. Loyalty points are earned as a result of travel and purchases using the Company’s co-branded credit card. The balance of the Loyalty Program Liabilities fluctuates based on seasonal patterns, which impact the volume of loyalty points awarded through travel or issued to co-branded credit card and other partners (deferral of revenue) and loyalty points redeemed (recognition of revenue). Changes in the Loyalty Program Liabilities are as follows: 2020 2019 Balance—December 31, 2018 $ 23,950 ASC 606 adoption adjustment (January 1, 2019) 4,867 Balance—January 1 $ 22,892 $ 28,817 Loyalty Points Earned 4,015 6,483 Loyalty Points Redeemed (1) (4,838) (12,408) Balance—December 31 $ 22,069 $ 22,892 (1) Principally relates to revenue recognized from the redemption of loyalty points for both air and non-air travel awards. Loyalty points are combined in one homogenous pool and are not separately identifiable. As such, the redemptions are comprised of points that were part of the Loyalty Program Liabilities balance at the beginning of the period, as well as loyalty points that were earned during the period. The timing of loyalty point redemptions can vary significantly, however most new points, that are not left to expire, are redeemed within two years. Given the inherent uncertainty of the current operating environment due to COVID-19, the Company will continue to monitor redemption patterns and will adjust estimates in the future, which could be material. |
EARNINGS PER SHARE_2
EARNINGS PER SHARE | 6 Months Ended | 12 Months Ended |
Jun. 30, 2021 | Dec. 31, 2020 | |
EARNINGS PER SHARE | ||
EARNINGS PER SHARE | 5. EARNINGS PER SHARE Basic earnings per share, which excludes dilution, is computed by dividing Net Income available to common stockholders by the weighted average number of shares of common stock outstanding for the period. Diluted earnings per share reflects the potential dilution that could occur if securities or other contracts to issue common stock were exercised or converted into common stock. The number of incremental shares from the assumed issuance of shares relating to share based awards is calculated by applying the treasury stock method. 5. EARNINGS PER SHARE (continued) The following table shows the computation of basic and diluted earnings per share: Three Months Ended June 30, Six Months Ended June 30, 2021 2020 2021 2020 Numerator: Net Income (Loss) $ 51,753 $ (6,040) $ 64,169 $ 1,211 Denominator: Weighted Average Common Shares Outstanding—Basic 57,156,159 46,805,950 52,850,041 46,805,950 Dilutive effect of Stock Options and Warrants (1) 4,826,282 — 4,553,552 1,437,196 Weighted Average Common Shares Outstanding—Diluted 61,982,441 46,805,950 57,403,593 48,243,146 Basic earnings (loss) per share $ 0.91 $ (0.13) $ 1.21 $ 0.03 Diluted earnings (loss) per share $ 0.83 $ (0.13) $ 1.12 $ 0.02 (1) There were 3,547,524 and 3,636,773 performance-based stock options outstanding at June 30, 2021 and 2020, respectively. As a result of the Company’s initial public offering, 75% of these options are expected to meet the performance conditions and are included in dilutive options at June 30, 2021. At June 30, 2020, these options were excluded from the calculation of diluted EPS since the performance conditions were not considered likely to be met. Prior to their exercise on January 31, 2020, all 40,005,885 warrants held by the Apollo Stockholder were included in basic and diluted weighted average shares outstanding as they were equity classified, had an exercise price of approximately $0.0005, and all necessary conditions for issuance were met. Warrants held by Amazon are included in dilutive weighted average shares outstanding as of the date the warrants vest. The unvested warrants held by Amazon have not been included in dilutive shares as their performance condition had not been satisfied. | 6. EARNINGS PER SHARE Basic earnings per share, which excludes dilution, is computed by dividing Net Income available to common stockholders by the weighted average number of common shares outstanding for the period. Diluted earnings per share reflects the potential dilution that could occur if securities or other contracts to issue common stock were exercised or converted into common stock. The number of incremental shares from the assumed issuance of shares relating to share based awards is calculated by applying the treasury stock method. The following table shows the computation of basic and diluted earnings per share: Successor Predecessor Year Ended December 31, For the Period April 11, 2018 to For the Period January 1, 2018 to 2020 2019 December 31, 2018 April 10, 2018 Numerator: Net income / (Loss) $ (3,904) $ 46,072 $ (367) $ 25,910 Denominator: Weighted Average Common Shares Outstanding—Basic 46,806,042 46,773,038 46,700,990 100,000,000 Dilutive effects of Warrants — — — — Dilutive effect of Stock Options and Warrants (1) — 1,136,375 — — Weighted Average Common Shares Outstanding—Diluted 46,806,042 47,909,413 46,700,990 100,000,000 Basic earnings / (loss) per share $ (0.08) $ 0.99 $ (0.01) $ 0.26 Diluted earnings / (loss) per share $ (0.08) $ 0.96 $ (0.01) $ 0.26 (1) There were 3,577,252 , 3,502,925 and 3,583,923 performance-based stock options outstanding as of December 31, 2020, 2019 and 2018, respectively, that were excluded from the calculation of diluted EPS. Additionally, in loss periods, the inclusion of unvested options would have an anti-dilutive effect. Prior to their exercise on January 31, 2020, all 40,005,885 warrants held by Apollo were included in basic and diluted weighted average shares outstanding as they were equity classified, had an exercise price of approximately $0.0005, and all necessary conditions for issuance were met. Warrants held by Amazon are included in diluted weighted average shares outstanding as of the date the warrants vested. The unvested warrants held by Amazon have not been included in diluted shares as their performance condition had not yet been satisfied. |
AIRCRAFT
AIRCRAFT | 6 Months Ended | 12 Months Ended |
Jun. 30, 2021 | Dec. 31, 2020 | |
AIRCRAFT | ||
AIRCRAFT | 6. AIRCRAFT Aircraft Fleet The following tables summarize the Company’s aircraft fleet activity for the six months ended June 30, 2021 and 2020, respectively: December 31, 2020 Additions Removals June 30, 2021 Passenger: Owned 14 6 — 20 Finance leases 5 2 — 7 Operating leases 12 — (6) 6 Sun Country Airlines' Fleet 31 8 (6) 33 Cargo: Aircraft Operated for Amazon 12 — — 12 Total Aircraft Operated 43 8 (6) 45 6. AIRCRAFT (continued) The six aircraft purchased during the six months ended June 30, 2021 were financed through the Delayed Draw Term Loan Facility (see Note 7). All six of these were previously under operating leases. During June 2021, the Company obtained an additional two aircraft under finance leases. December 31, 2019 Additions Removals June 30, 2020 Passenger: Owned 5 9 — 14 Finance leases 10 — (5) 5 Operating leases 14 — (2) 12 Seasonal leases 2 — (2) — Sun Country Airlines' Fleet 31 9 (9) 31 Cargo: Aircraft Operated for Amazon — 7 — 7 Total Aircraft Operated 31 16 (9) 38 The nine aircraft purchased during the six months ended June 30, 2020 were financed through equipment trust certificates (see Note 7). Two of these aircraft were previously under operating leases, five were previously under finance leases, and the other two aircraft were new to the Company’s fleet. In addition, the Company refinanced three previously owned and financed aircraft in January 2020 utilizing equipment trust certificates (see Note 7). As of June 30, 2021, Sun Country operated a fleet of Boeing 737-NG aircraft, consisting of 44 Boeing 737-800s and 1 Boeing 737-700. The Accumulated Depreciation on owned assets was $67,495 and $52,048 as of June 30, 2021 and December 31, 2020, respectively. Depreciation expense on these assets was $9,642 and $6,370 for the three months ended June 30, 2021 and 2020, respectively. Depreciation expense was $18,442 and $11,491 for the six months ended June 30, 2021 and 2020, respectively. The Accumulated Amortization on Finance Lease Assets was $21,209 and $13,018 as of June 30, 2021 and December 31, 2020, respectively. Amortization Expense on these assets was $2,692 and $4,665 for the three months ended June 30, 2021 and 2020, respectively. Amortization Expense was $5,384 and $8,955 for the six months ended June 30, 2021 and 2020, respectively. Depreciation expense on owned assets and amortization expense on Finance Lease Assets are each classified in Depreciation and Amortization on the Condensed Consolidated Statements of Operations. Aircraft Lease Payment Deferrals During the year ended December 31, 2020 the Company negotiated rent payment deferrals with a majority of its aircraft lessors due to COVID-19 cash flow impacts. There were no amounts deferred as of June 30, 2021 since the final payments were made in the second quarter of 2021. The amount deferred as of December 31, 2020 was $7,569, consisting of $2,133 under finance leases and $5,436 under operating leases. These deferrals were classified within the current portion of the respective lease liabilities on the Condensed Consolidated Balance Sheet as of December 31, 2020. 6. AIRCRAFT (continued) Aircraft Maintenance Deposits Contra-Assets At April 11, 2018 (the “Acquisition Date”), the Company established a deposit contra-asset to represent the Company’s obligation to perform planned maintenance events on leased aircraft held as of the Acquisition Date. As of June 30, 2021 and December 31, 2020, the remaining balance of the contra-asset was $22,792 and $36,729, respectively. Of the $13,937 reduction in the contra-asset during the six months ended June 30, 2021, $12,749 related to the purchase of six aircrafts previously leased, whereupon the contra-assets and related maintenance deposits were written-off concurrently to Aircraft lease buy-out expense in Special Items, net (see Note 11). For the three months ended June 30, 2021 and 2020, the Company recognized $850 and none respectively, of the contra-asset as a reduction to Maintenance expense on the accompanying Condensed Consolidated Statements of Operations. For the six months ended June 30, 2021 and 2020, the Company recognized $850 and $328, respectively, of the contra-asset as a reduction to Maintenance expense. Over-market Liabilities At the Acquisition Date, the Company acquired liabilities related to its over-market lease rates and over-market maintenance reserve payments. As of the Acquisition Date, the Company recognized a liability representing lease terms which are unfavorable compared with market terms of similar leases. Upon adopting ASU 2016-02, Leases (Topic 842) effective January 1, 2019, this liability was reclassified as an offset to the Operating Lease Right-of-use Assets. The remaining unamortized balance of this contra-asset as of June 30, 2021 and December 31, 2020 was $11,444 and $16,501, respectively and is recorded within Operating Lease Right-of-Use Assets. During the six months ended June 30, 2021, the Company purchased six aircraft which were previously under leases with unfavorable terms, contributing to $3,765 of the decrease. As of the Acquisition Date, Sun Country’s existing leases included payments for maintenance reserves in addition to the stated aircraft lease payments. For a substantial portion of these maintenance reserve payments, the Company does not expect to be reimbursed by the lessor. Therefore, a liability was established representing over-market maintenance reserve lease terms compared to market terms of similar leases. The remaining balance of this liability at June 30, 2021 and December 31, 2020 was $16,892 and $37,409, respectively. Of the $20,517 reduction in the over-market maintenance reserve liabilities during the six months ended June 30, 2021, $17,435 related to the purchase of six aircrafts previously leased. The over-market liabilities for those aircraft are included in Aircraft lease buy-out expense in Special Items, net (see Note 11). Aircraft Rent expense for the three months ended June 30, 2021 and 2020, includes credits of $1,618 and $3,726, respectively, for the amortization of over-market liabilities established at the Acquisition Date related to lease rates and maintenance reserves. The Aircraft Rent expense credits for the six months ended June 30, 2021 and 2020 were $4,373 and $7,830, respectively. | 7. PROPERTY & EQUIPMENT During the year ended December 31, 2020, the Company purchased nine aircraft and a spare engine. See Note 10 for further information on leased aircraft. 7. PROPERTY & EQUIPMENT (continued) Aircraft Fleet The following tables summarize the Company’s aircraft fleet activity for the years ended December 31, 2020 and 2019, respectively: December 31, 2019 Additions Removals December 31, 2020 Passenger: Owned 5 9 — 14 Finance leases 10 — (5) 5 Operating leases 14 — (2) 12 Seasonal leases 2 — (2) — Sun Country Airlines’ Fleet 31 9 (9) 31 Cargo Aircraft Operated for Amazon — 12 — 12 Total Aircraft Operated 31 21 (9) 43 The nine passenger aircraft purchased during the year ended December 31, 2020 were financed through equipment trust certificates (see Note 9). Two of these aircraft were previously under operating leases, five were previously under finance leases, and the other two aircraft were new to the Company’s fleet. In addition to the nine purchases discussed above, the Company refinanced three previously owned aircraft in January 2020 utilizing equipment trust certificates (see Note 9). The 12 cargo aircraft added during 2020 relate to the Amazon Agreement (see Note 1). December 31, 2018 Additions Removals December 31, 2019 Owned 3 2 — 5 Finance leases 5 5 — 10 Operating leases 19 — (5) 14 Seasonal leases 3 2 (3) 2 Sun Country Airlines’ Fleet 30 9 (8) 31 In December 2019, the Company purchased its first aircraft utilizing equipment trust certificates. The Company purchased one of its aircraft previously under an operating lease agreement in February 2019. In addition, the Company entered into a new finance lease for an aircraft in each of March, April, May and December 2019. Also, in December 2019, the Company amended an operating lease, which converted it to a finance lease. Lastly, one of the Company’s operating leases expired in August 2019 and two in December 2019. The Accumulated Depreciation on owned assets was $52,048 and $21,030 as of December 31, 2020 and 2019, respectively. Depreciation expense was $31,657 and $17,347 for the years ended December 31, 2020 and 2019, respectively, and was $6,731 and $2,315 for the period from April 11, 2018 through December 31, 2018 and the period January 1, 2018 through April 10, 2018, respectively. 7. PROPERTY & EQUIPMENT (continued) The Accumulated Amortization on Finance Lease Assets was $13,018 and $6,698 as of December 31, 2020 and 2019, respectively. Amortization Expense was $11,948 and $13,104 for the years ended December 31, 2020 and 2019, respectively, and was $4,476 and $119 for the period from April 11, 2018 through December 31, 2018 and the period January 1, 2018 through April 10, 2018, respectively. Depreciation expense on Owned Assets and amortization expense on Finance Lease Assets are classified in Depreciation and Amortization on the Consolidated Statements of Operations. |
DEBT_2
DEBT | 6 Months Ended | 12 Months Ended |
Jun. 30, 2021 | Dec. 31, 2020 | |
DEBT | ||
DEBT | 7. DEBT Lines of Credit— Long-term Debt— Under the CARES Act Loan Program, on October 26, 2020, the Company was awarded a $45,000 loan, which was secured by the Company’s loyalty program and certain cash deposit accounts. 7. DEBT (continued) The Company was in compliance with all covenants in its debt agreements at June 30, 2021. Long-term Debt included the following: June 30, 2021 December 31, 2020 Notes payable under the Company's 2019-1 EETC agreement dated December 2019, with original loan amounts of $248,587 payable in bi-annual installments, in June and December, through December 2027. These notes bear interest at an annual rate of between 4.13% and 6.95% and the weighted average interest rate is 4.78%. $ 211,605 $ 227,347 Delayed Draw Term Loan Facility (see terms and conditions above) 79,494 — U. S. Department of the Treasury CARES Act Loan (see terms and conditions above) — 45,419 Notes payable to Wilmington Trust Company. Notes bear interest at an annual rate of 8.45% and were scheduled to mature Nov. 2023 to Feb. 2024. In April 2021, these notes were repaid. — 12,506 Other Notes payable. These notes bear interest at an annual rate of approximately 5.0% and mature March 2029. 493 529 Total Debt 291,592 285,801 Less: Unamortized debt issuance costs (4,113) (3,338) Less: Current Maturities of Long-term Debt (19,795) (26,118) Total Long-term Debt $ 267,684 $ 256,345 Future maturities of the outstanding Debt are as follows: Debt Principal Amortization of Debt Payments Issuance Costs Net Debt Remainder of 2021 $ 10,661 $ (509) $ 10,152 2022 30,367 (983) 29,384 2023 42,358 (908) 41,450 2024 44,000 (785) 43,215 2025 49,087 (670) 48,417 Thereafter 115,119 (258) 114,861 Total as of June 30, 2021 $ 291,592 $ (4,113) $ 287,479 7. DEBT (continued) The table below presents the Company’s debt measured at fair value: June 30, 2021 December 31, 2020 Carrying Amount $ 291,592 $ 285,801 Fair Value $ 281,640 $ 279,119 The fair value of the Company’s debt was based on the discounted amount of future cash flows using the Company’s end-of-period incremental borrowing rate for similar obligations. The estimates were primarily based on Level 3 inputs. | 9. DEBT Lines of Credit — On February 10, 2021, the Company executed a new five-year credit agreement with a group of lenders that replaces the Company’s May 15, 2020 $25,000 revolving credit agreement. The new agreement provides for a $25,000 Revolving Credit Facility and a $90,000 Delayed Draw Term Loan Facility, which are collectively referred to as the “Credit Facilities.” The interest rate on borrowings is based on the greatest of various alternative base rates, with a minimum of 2%, plus an applicable margin of 4% to 5%. There is a commitment fee on the unused Revolving Credit Facility of 0.5%. The proceeds from the Revolving Credit Facility can be used for general corporate purposes. The proceeds from Delayed Draw Term Loans are to be used solely to finance the acquisition of aircraft or engines to be registered in the U.S. The Credit Facilities have financial covenants that require a minimum EBITDAR (ranging from $62,100 to $87,700) and a minimum liquidity of $30,000 at the close of any business day. Long-term Debt— In December of 2019, the Company purchased one aircraft under the 2019-1 EETC. In the first quarter of 2020, under the 2019-1 EETC, SCA purchased two additional aircraft, purchased one previously under operating lease, and refinanced three aircraft previously owned and financed. The purchase of the remaining six aircraft previously under operating or finance leases occurred in the second quarter of 2020. The total appraised value of the 13 aircraft is approximately $292,450. The Certificates bear interest at the following rates per annum: Class A, 4.13% relating to a tranche of seven of the financed aircraft and 4.25% relating to a tranche of six of the financed aircraft; Class B, 4.66% relating to a tranche of seven of the financed aircraft and 4.78% related to a tranche of six of the financed aircraft; and Class C, 6.95%. The expected maturity date of Class A is December 15, 2027, the Class B is December 15, 2025 and the Class C is December 15, 2023. These trusts meet the definition of a variable interest entity (“VIE”) and must be considered for consolidation in the Company’s Consolidated Financial Statements. This assessment considers both quantitative and qualitative factors including the purpose for which these trusts were established and the nature of the risks. The main purpose of the trust structure is to enhance the credit worthiness of the debt obligation and lower the total borrowing cost. The Company concluded that it is not the primary beneficiary in these trusts because the Company’s involvement is limited to principal and interest payments on the related notes. Therefore, these trusts have not been consolidated in the Company’s Consolidated Financial Statements. 9. DEBT (continued) Under the CARES Act Loan Program, on October 26, 2020, the Company was awarded a forty-five million dollar loan, which is secured by SCA’s loyalty program and certain cash deposit accounts. The loan bears interest at a rate per annum equal to the Adjusted LIBO Rate plus 6.50% and is due to be repaid on the earlier of (i) October 24, 2025 or (ii) six months prior to the expiration date of any material loyalty program securing the loan. During the term of the loan, the Company must maintain aggregate liquidity of not less than ten million dollars, measured at the close of every business day. There are also provisions that may accelerate payments under the loan if certain collateral and debt service coverage ratios are not met. Additionally, because of the timing of the expiration of the Company’s loyalty program agreement, early loan repayments shall be made based on cash flows from the loyalty program, beginning approximately January 2023. The loan program allows for the Payment-In-Kind (“PIK”) of certain interest amounts throughout the debt term The Company elected to PIK $419 of accrued interest in the fourth quarter of 2020 and it was added to the principal balance. Long-term Debt included the following: December 31, 2020 December 31, 2019 Notes payable under the Company’s 2019-1 EETC agreement dated December 2019, with original loan amounts of $248,587 payable in bi-annual installments through December 2027. These notes bear interest at an annual rate of between 4.13% and 6.95% and are secured by the equipment for which the loan was used $ 227,347 $ 28,280 U. S. Department of the Treasury CARES Act Loan (see terms and conditions above) 45,419 — Notes payable to Wilmington Trust Company dated October and November 2018, with original loan amounts totaling $55,671 payable in monthly installments through November 2023. These notes bore interest at an annual rate of 8.45%. They were refinanced in January 2020 through 2019-1 EETC notes — 46,617 Note payable to Wilmington Trust Company dated February 2019, with an original loan amount of $12,750 payable in monthly installments of $151 through January 2024, and then final lump sum payment of $2,825 in February 2024. This note bears interest at an annual rate of 8.45% and is secured by the equipment for which the loan was used 9,813 11,237 Note payable to Wilmington Trust Company dated November 2018, with an original loan amount of $3,671 payable in monthly installments of $44 through October 2023, and then final lump sum payment of $1,101 in November 2023. This note bears interest at an annual rate of 8.45% and is secured by the equipment for which the loan was used 2,693 3,105 Note payable to Alliance Bank dated February 2019, with an original loan amount of $600 payable in monthly installments of $5 through March 2029. This note bears interest at an annual rate of 5.0% 519 569 Notes payable to Riverland Bank dated between April 2015 and May 2016, with original loan amounts totaling $734 payable in monthly installments with expirations between April 2020 and April 2021. The notes bear interest at an annual rate of 5.15% and are secured by the equipment for which the loan was used 10 97 Total Debt 285,801 89,905 Less: Unamortized debt issuance costs (3,338) (2,988) Less: Current Maturities of Long-term Debt (26,118) (13,197) Total Long-term Debt $ 256,345 $ 73,720 9. DEBT (continued) Future maturities of the outstanding Debt are as follows: Year Ending December 31 Debt Principal Payments Amortization of Debt Issuance Costs Net Debt 2021 $ 26,928 $ (810) $ 26,118 2022 28,846 (752) 28,094 2023 43,819 (678) 43,141 2024 67,659 (554) 67,105 2025 64,810 (342) 64,468 Thereafter 53,739 (202) 53,537 Total $ 285,801 $ (3,338) $ 282,463 The table below presents the Company’s debt measured at fair value: December 31, 2020 December 31, 2019 Carrying Amount $ 285,801 $ 89,905 Fair Value $ 279,119 $ 96,342 The fair value of the Company’s debt was based on the discounted amount of future cash flows using the Company’s end-of-year incremental borrowing rate for similar obligations. The estimates were primarily based on Level 3 inputs. |
FUEL DERIVATIVES AND RISK MAN_4
FUEL DERIVATIVES AND RISK MANAGEMENT | 6 Months Ended | 12 Months Ended |
Jun. 30, 2021 | Dec. 31, 2020 | |
FUEL DERIVATIVES AND RISK MANAGEMENT | ||
FUEL DERIVATIVES AND RISK MANAGEMENT | 8. FUEL DERIVATIVES AND RISK MANAGEMENT The Company’s operations are inherently dependent upon the price of aircraft fuel. To manage economic risks associated with fluctuations in aircraft fuel prices, the Company periodically enters into fuel option and swap contracts. The Company does not apply hedge accounting to its fuel derivative contracts, nor does it hold or issue them for trading purposes. Fuel derivative contracts are recognized at fair value on the Condensed Consolidated Balance Sheets as Derivative Assets, if the fair value is in an asset position, or as Derivative Liabilities, if the fair value is in a liability position. The Company did not have any collateral held by counterparties to these agreements as of June 30, 2021 and December 31, 2020. Derivatives where the payment due date is greater than one year from the balance sheet date are classified as long-term. Changes in Derivative Assets (Liabilities) were as follows: Six Months Ended June 30, 2021 2020 Balance - January 1 $ (1,174) $ 2,233 Non-cash Gains (Losses) 3,599 (16,056) Contract Settlements (827) 4,990 Balance - June 30 $ 1,598 $ (8,833) Fuel Derivative Gains (Losses) consisted of the following: Three Months Ended June 30, Six Months Ended June 30, 2021 2020 2021 2020 Non-cash Gains (Losses) $ 1,213 $ 5,695 $ 3,599 $ (16,056) Cash Premiums Paid — (1,617) — (1,901) Total Fuel Derivative Gains (Losses) $ 1,213 $ 4,078 $ 3,599 $ (17,957) Fuel derivative gains and losses are classified in Aircraft Fuel on the Condensed Consolidated Statements of Operations. As of June 30, 2021, the Company had outstanding fuel derivative contracts covering 5.8 million gallons of crude oil and jet fuel that will settle between July 2021 and September 2021. | 12. FUEL DERIVATIVES AND RISK MANAGEMENT The Company’s operations are inherently dependent upon the price of aircraft fuel. To manage economic risks associated with fluctuations in aircraft fuel prices, the Company periodically enters into fuel option and swap contracts. The Company does not apply hedge accounting to its fuel derivative contracts, nor does it hold or issue them for trading purposes. Fuel derivative contracts are recognized at fair value on the Consolidated Balance Sheets as Derivative Assets, if the fair value is in an asset position, or as Derivative Liabilities, if the fair value is in a liability position. The Company did not have any collateral held by counterparties to these agreements as of December 31, 2020 and 2019. Derivatives where the payment due date is greater than one year from the balance sheet date are classified as long-term. Changes in Derivative Assets (Liabilities) were as follows: Year Ended December 31, 2020 2019 Balance—January 1 $ 2,233 $ (12,006) Non-cash gains (losses) (12,206) 10,791 Contract settlements 8,800 3,448 Balance—December 31 $ (1,173) $ 2,233 Fuel Derivative Gains (Losses) consisted of the following: Year Ended December 31, For the Period 2020 2019 December 31, 2018 Non-cash gains (losses) $ (12,206) $ 10,791 $ (12,006) Cash Premiums Paid (2,053) (665) (2,280) Total Fuel Derivative gains (losses) $ (14,259) $ 10,126 $ (14,286) There were fuel derivative gains in the second, third and fourth quarters of 2020, primarily due to the partial recovery of oil prices following the decline during the first quarter of 2020. There were no fuel derivatives outstanding during the period January 1, 2018 through April 10, 2018. Fuel derivative gains and losses are recognized in Aircraft Fuel expense on the Consolidated Statements of Operations. As of December 31, 2020, the Company had outstanding fuel derivative contracts covering 21.0 million gallons of crude oil and jet fuel that will settle between January 2021 and September 2021. Fuel Consortia The Company currently participates in fuel consortia at multiple airports. These agreements generally include cost-sharing provisions and environmental indemnities that are generally joint and several among the participating airlines. To the extent the consortium are legal entities, they meet the definition of a VIE and must be considered for consolidation in the Company’s Consolidated Financial Statements. The company concluded that it is not the primary beneficiary of any fuel consortia as SCA’s participation generally represents a small percentage of the overall fuel consortia interests and SCA does not have the ability to direct the activities of the consortia. |
FAIR VALUE MEASUREMENTS_2
FAIR VALUE MEASUREMENTS | 6 Months Ended | 12 Months Ended |
Jun. 30, 2021 | Dec. 31, 2020 | |
FAIR VALUE MEASUREMENTS | ||
FAIR VALUE MEASUREMENTS | 9. FAIR VALUE MEASUREMENTS Accounting standards define fair value as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. The standards also establish a fair value hierarchy, which requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. Under GAAP, there are three levels of inputs that may be used to measure fair value: Level 1 Level 2 Level 3 The Company uses the following valuation methodologies for financial instruments measured at fair value on a recurring basis. Derivative Instruments The following table summarizes the assets and liabilities measured at fair value on a recurring basis: June 30, 2021 Level 1 Level 2 Level 3 Total Assets Fuel Derivative Contracts $ — $ 1,598 $ — $ 1,598 Total Assets measured at fair value on a recurring basis $ — $ 1,598 $ — $ 1,598 December 31, 2020 Level 1 Level 2 Level 3 Total Liabilities Fuel Derivative Contracts $ — $ 1,174 $ — $ 1,174 Total Liabilities measured at fair value on a recurring basis $ — $ 1,174 $ — $ 1,174 Certain assets are measured at fair value on a nonrecurring basis. The Company’s non-financial assets, which primarily consist of property and equipment, goodwill and other intangible assets are not required to be measured at fair value on a recurring basis and are reported at carrying value. However, on a periodic basis whenever events or changes in circumstances indicate that their carrying value may not be recoverable, non-financial assets are assessed for impairment and, if applicable, written down to fair value using significant unobservable inputs, classified as Level 3. The Company’s debt portfolio consists of 2019-1 EETC certificates, borrowings under the Delayed Draw Term Loan Facility, and fixed-rate notes payable. See Note 7 for debt fair values. | 13. FAIR VALUE MEASUREMENTS Accounting standards define fair value as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. The standards also establish a fair value hierarchy, which requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. Under GAAP, there are three levels of inputs that may be used to measure fair value: Level 1—Quoted prices for identical assets or liabilities in active markets. Level 2—Observable inputs other than Level 1 prices, such as quoted prices for similar assets or liabilities in active markets; quoted prices for identical or similar assets or liabilities in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities. Level 3—Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. The Company uses the following valuation methodologies for financial instruments measured at fair value on a recurring basis. Derivative Instruments— The following table summarizes the assets and liabilities measured at fair value on a recurring basis: December 31, 2020 Level 1 Level 2 Level 3 Total Liabilities Fuel Derivative Contracts $ — $ 1,173 $ — $ 1,173 Total Liabilities measured at fair value on a recurring basis $ — $ 1,173 $ — $ 1,173 December 31, 2019 Level 1 Level 2 Level 3 Total Assets Fuel Derivative Contracts $ — $ 2,233 $ — $ 2,233 Total Assets measured at fair value on a recurring basis $ — $ 2,233 $ — $ 2,233 Certain assets are measured at fair value on a nonrecurring basis. The Company’s non-financial assets, which primarily consist of property and equipment, goodwill and other intangible assets are not required to be measured at fair value on a recurring basis and are reported at carrying value. However, on a periodic basis whenever events or changes in circumstances indicate that their carrying may not be recoverable, non-financial assets are assessed for impairment and, if applicable, written down to fair value using significant unobservable inputs, classified as Level 3. The Company’s debt portfolio consists of EETC certificates and notes payable. See Note 9 for debt fair values. |
INCOME TAXES_2
INCOME TAXES | 6 Months Ended | 12 Months Ended |
Jun. 30, 2021 | Dec. 31, 2020 | |
INCOME TAXES | ||
INCOME TAXES | 10. INCOME TAXES The Company’s effective tax rate for the three and six months ended June 30, 2021 was 15.5% and 18.8%, respectively. The effective tax rate for the three and six months ended June 30, 2020 was 23.9% and 31.1%, respectively. The effective tax rate represents a blend of federal and state taxes and includes the impact of certain nondeductible or nontaxable items. The decrease in the three and six month rate is primarily due to a favorable permanent difference related to the Tax Receivable Agreement partially offset by nondeductible expense related to executive compensation disallowed under Internal Revenue Code Section 162(m). Tax Receivable Agreement In connection with the Company’s IPO, we entered into an income Tax Receivable Agreement (the “Tax Receivable Agreement” or “TRA”) with our pre-IPO stockholders (the “TRA holders”). The Tax Receivable Agreement provides for the payment by the Company to the TRA holders of 85% of the amount of cash savings, if any, in U.S. federal, state, local, and foreign income tax that the Company actually realizes (or are deemed to realize in certain circumstances) as a result of certain tax attributes that existed at the time of the IPO (the “Pre-IPO Tax Attributes”). The Company will retain the benefit of the remaining 15% of these cash savings. Payments under the Tax Receivable Agreement will not begin until at least 12 months after the closing of the Company’s IPO. In the event that the Company is prohibited from making payments under the Tax Receivable Agreement for tax benefits utilized during any periods pursuant to the CARES Act or other governmental programs, the Company is not required to make payments under the Tax Receivable Agreement for Pre-IPO Tax Attributes utilized in such periods. Based on our current participation in the CARES Act Program, the Company does not expect to make payments under the Tax Receivable Agreement until 2023. If we do not generate sufficient taxable income in the aggregate over the term of the Tax Receivable Agreement to utilize the tax benefits, then we would not be required to make the related TRA payments. Upon the closing of the IPO, the Company recognized a non-current liability of $115,200 which represented undiscounted aggregate payments that we expected to pay the TRA holders under the Tax Receivable Agreement, with an offset to Stockholders' Equity. Subsequent changes in the measurement of the liability are being adjusted through the Consolidated Statements of Operations. The Tax Receivable Agreement liability is an estimate and actual amounts payable under the Tax Receivable Agreement could differ from this estimate based on, among other things, (i) generation of future taxable income over the term of the Tax Receivable Agreement, (ii) the Company’s participation in future government programs, (iii) stock option activity during periods prior to the commencement of payments under the Tax Receivable Agreement and (iv) future changes in tax laws. These factors could result in an increase or decrease in the related liability which would be recognized in the Company’s earnings in the period of such change. In the second quarter of 2021, the Company reduced the TRA liability balance by $18,700, from $115,200 to $96,500. The offsetting credit was recorded in Other Non-operating Income. The decrease in the TRA liability was mainly due to the receipt of the PSP3 grant of $34,547, which extended the time period in which distributions made to shareholders are restricted from March 31, 2022 to September 30, 2022, and also resulted in an increase in forecasted 2021 pre-tax income. The remaining TRA liability balance of $96,500 is presented in “Long-term Liabilities” on the Condensed Consolidated Balance Sheet as of June 30, 2021. | 14. INCOME TAXES The Company’s effective tax rate for the years ended December 31, 2020 and 2019 were 16.6% and 23.5%, respectively, and for the period from April 11, 2018 to December 31, 2018 it was (77.9)%. The effective tax rate represents a blend of federal and state taxes and includes the impact of certain nondeductible items. The following table summarizes the significant components of the provision for income taxes from continuing operations: Successor Year Ended December 31, For the period 2020 2019 December 31, 2018 Current: Federal $ — $ — $ — State and Local 10 66 — Total Current Tax Expense 10 66 — Deferred: Federal (597) 12,509 129 State and Local (191) 1,513 32 Total Deferred Tax Expense / (Benefit) (788) 14,022 161 Total Income Tax Expense / (Benefit) $ (778) $ 14,088 $ 161 The income tax provision differs from that computed at the federal statutory corporate tax rate as follows: Successor Year Ended December 31, For the period 2020 2019 December 31, 2018 Expected Provision at Federal Statutory Tax Rate 21.0 % 21.0 % 21.0 % State Tax, net of Federal Impact 3.1 % 2.1 % (12.0) % Employee Parking (3.3) % 0.2 % (40.4) % Meals and Entertainment (2.2) % 0.2 % (42.9) % Other Permanent Adjustments (2.0) % 0.0 % (3.6) % Effective Tax Rate 16.6 % 23.5 % (77.9) % 14. INCOME TAXES (continued) The following table summarizes the significant components of the Company’s deferred taxes: December 31, 2020 2019 Deferred Tax Assets: Net Operating Loss $ 75,389 $ 24,680 Operating Lease Obligations 32,942 38,629 Finance Lease Obligations 20,095 45,392 Goodwill and Other Intangible Assets 12,586 15,325 Loyalty Program Liabilities 4,911 5,064 Accrued Maintenance 4,434 7,481 Other 4,318 2,769 Total Deferred Tax Assets 154,675 139,340 Deferred Tax Liabilities: Accelerated Depreciation (67,105) (24,858) Operating Lease Right-of-use Assets (27,892) (33,844) Finance Lease Assets (23,462) (44,696) Unrealized Gain on Fuel Derivatives — (514) Total Deferred Tax Liabilities (118,459) (103,912) Total Net Deferred Tax Assets $ 36,216 $ 35,428 As of December 31, 2020, the Company has $73,116 of federal net operating loss and $2,273 of state net operating loss, net of tax effect, available that may be applied against future tax liabilities. There is no expiration of federal net operating losses. The state net operating losses begin to expire in 2025. In assessing the realizability of Deferred Tax Assets, management considers whether it is more likely than not that some portion or all the Deferred Tax Assets will not be realized. The ultimate realization of the Deferred Tax Assets is dependent upon the generation of future taxable income during periods in which the temporary differences become deductible. Management considers the scheduled reversal of the liabilities (including the impact of available carryback and carryforward periods), projected future taxable income, and tax-planning strategies in making this assessment. As of December 31, 2020, management believes that it is more likely than not that the future results of the operations will generate sufficient taxable income to realize the tax benefits related to its Deferred Tax Assets. The Company recognizes the consolidated financial statement effect of a tax position when it is more likely than not, based on the technical merits, that the position will be sustained upon examination. If applicable, the Company reports both accrued interest and penalties related to unrecognized tax benefits as a component of Income Tax Expense in the Consolidated Statements of Operations. As of December 31, 2020 and 2019, the Company had no liability for unrecognized tax benefits recorded in its Consolidated Balance Sheets. The Company files income tax returns in the United States and various states. In the normal course of business, the Company is subject to potential income tax examination by the federal and state tax authorities in these jurisdictions for tax years that are open under local statute. For U.S. federal and state income tax purposes, the Company’s 2018 and 2019 tax returns remain open to examination. |
SPECIAL ITEMS, NET_2
SPECIAL ITEMS, NET | 6 Months Ended | 12 Months Ended |
Jun. 30, 2021 | Dec. 31, 2020 | |
SPECIAL ITEMS, NET | ||
SPECIAL ITEMS, NET | 11. SPECIAL ITEMS, NET Special Items, net on the Condensed Consolidated Statements of Operations consisted of the following: Three Months Ended June 30, Six Months Ended June 30, 2021 2020 2021 2020 CARES Act grant recognition (1) $ (39,378) $ (31,516) $ (71,587) $ (31,516) CARES Act employee retention credit (2) (446) — (780) — Aircraft lease buy-out expense (3) 1,299 — 6,963 — Other 5 35 12 35 Total Special Items, net $ (38,520) $ (31,481) $ (65,392) $ (31,481) (1) In the quarter ended March 31, 2021, the Treasury awarded the Company a grant of $32,208 under PSP2. On April 22, 2021, the Company received an additional $4,831 from the Treasury as a top-off grant under PSP2. Further, during the quarter ended June 30, 2021, the Company received a grant of $34,547 under PSP3. (2) The CARES Act Employee Retention credit relates to a refundable tax credit against certain employment taxes. (3) Five aircraft were purchased in March 2021 that were previously under operating leases. One additional aircraft was purchased in April 2021 that was previously under an operating lease. Aircraft lease buy-out expense represents the net costs incurred to terminate the leases on those six aircraft. This includes the associated lease termination costs, write-off of previously capitalized maintenance deposits, and the write-off of over-market liabilities (see Note 6). | 16. SPECIAL ITEMS, NET Special Items, net on the Consolidated Statements of Operations consisted of the following: Successor Predecessor Year Ended December 31, For the Period For the Period 2020 2019 December 31, 2018 April 10, 2018 CARES Act grant recognition (1) $ (62,312) $ — $ — $ — CARES Act employee retention credit (2) (2,328) — — — Contractual obligations for retired technology (3) — 7,578 — — Sale of airport slot rights (4) — (1,200) — — Sun Country Rewards program modifications (5) — — (8,463) — Early-out payments and other outsourcing expenses (6) — — 1,757 271 Other (7) 77 714 — — Total Special Items, net $ (64,563) $ 7,092 $ (6,706) $ 271 (1) Relates to the credit recognized under the CARES Act Payroll Support Program through December 31, 2020. Under the Payroll Support Program, the United States Department of the Treasury provided the Company with a Payroll Support grant, which was to be used exclusively for the continuation of payments for salaries, wages, and benefits. (see Note 3 for more information). (2) Relates to the credit recognized under the CARES Act Employee Retention credit which is a refundable tax credit against certain employment taxes (see Note 3 for more information). (3) This was a charge related to contractual obligations for retired technology. In connection with implementing SCA’s new reservations systems, the Company incurred obligations under the contracts for existing systems that were being phased out ahead of their scheduled contract terms. 16. SPECIAL ITEMS, NET (continued) (4) Represents proceeds from the sale of unused airport slot rights. SCA does not hold any other remaining airport slot rights; therefore this gain does not reflect the Company’s continuing operations. (5) This reduction to expense is associated with changes to the terms of the Sun Country Rewards program. As of November 3, 2018, the Company modified policies within the program which accelerated loyalty point expiration, while making points more valuable for its members. (6) Related to early-out payments and other expenses incurred in connection with outsourcing certain operations personnel and other employee initiatives. These efforts were primarily related to airport station, flight attendants and ground handling employees. (7) Consists of employee relocation costs due to closing flight attendant bases and costs to exit the Company’s prior headquarters building. |
COMMITMENTS AND CONTINGENCIES_2
COMMITMENTS AND CONTINGENCIES | 6 Months Ended | 12 Months Ended |
Jun. 30, 2021 | Dec. 31, 2020 | |
COMMITMENTS AND CONTINGENCIES | ||
COMMITMENTS AND CONTINGENCIES | 12. COMMITMENTS AND CONTINGENCIES The Company has contractual obligations and commitments primarily with regard to lease arrangements, repayment of debt (see Note 7) and future purchases of aircraft. The Company is subject to various legal proceedings in the normal course of business and expenses legal costs as incurred. Management believes these proceedings will not have a materially adverse effect on the Company. | 17. COMMITMENTS AND CONTINGENCIES The Company has contractual obligations and commitments primarily with regard to lease arrangements (see Note 10) and repayment of debt (see Note 9). The Company is subject to various legal proceedings in the normal course of business and records legal costs as incurred. Management believes these proceedings will not have a materially adverse effect on the Company. |
OPERATING SEGMENTS_2
OPERATING SEGMENTS | 6 Months Ended | 12 Months Ended |
Jun. 30, 2021 | Dec. 31, 2020 | |
OPERATING SEGMENTS | ||
OPERATING SEGMENTS | 13. OPERATING SEGMENTS Operating segments are defined as components of an enterprise about which separate financial information is available that is evaluated regularly by the Chief Operating Decision Maker and is used in resource allocation and performance assessments. The Company’s Chief Operating Decision Maker is considered to be the Company’s Chief Executive Officer. The Company’s Chief Operating Decision Maker makes resource allocation decisions to maximize the Company’s consolidated financial results. Substantially all the Company’s tangible assets are located in the U.S. or relate to flight equipment, which is mobile across geographic markets. The Company has two operating segments: Passenger and Cargo. The Company’s Passenger segment has two internal passenger groups (Scheduled and Charter), but since they share resources and expenses are combined, they are considered one Passenger operating segment. The Company’s Passenger operations are highly concentrated in the U.S. but include service to many international locations, primarily based on scheduled service to Latin America during the winter season and on military charter services. All goodwill is related to the Passenger Operating Segment. 13. OPERATING SEGMENTS (continued) The Cargo segment began providing air cargo services under the ATSA in May 2020. Fuel consumed in Cargo operations is directly reimbursed by Amazon and therefore aircraft fuel revenue is presented net of such reimbursements on the Condensed Consolidated Statements of Operations. Fuel consumed in Cargo maintenance activities is included in the Cargo segment. Certain operating expenses are directly attributable to this operating segment. Certain operating expenses are allocated between the operating segments. Non-Fuel operating expenses are allocated based on metrics such as block hours, fleet count and departures, which best align with the nature of the respective expense. CARES Act credits, included in Special Items, net, are allocated based on the respective segment salaries, wages, and benefits. The following tables present financial information for the Company’s two operating segments: Passenger and Cargo. Assets by segment are not reviewed by the Chief Operating Decision Maker and have not been presented herein. Three Months Ended June 30, 2021 Three Months Ended June 30, 2020 Passenger Cargo Consolidated Passenger Cargo (1) Consolidated Operating Revenues $ 127,091 $ 22,098 $ 149,189 $ 32,157 $ 3,219 $ 35,376 Non-Fuel Operating Expenses 92,361 16,401 108,762 63,507 4,907 68,414 Aircraft Fuel 29,657 52 29,709 677 — 677 Special Items, net (28,784) (9,736) (38,520) (28,111) (3,370) (31,481) Total Operating Expenses 93,234 6,717 99,951 36,073 1,537 37,610 Operating Income (Loss) $ 33,857 $ 15,381 49,238 $ (3,916) $ 1,682 (2,234) Interest Income 9 63 Interest Expense (6,080) (5,442) Other, net 18,054 (325) Income (Loss) before Income Tax $ 61,221 $ (7,938) Six Months Ended June 30, 2021 Six Months Ended June 30, 2020 Passenger Cargo Consolidated Passenger Cargo (1) Consolidated Operating Revenues $ 233,118 $ 43,684 $ 276,802 $ 212,487 $ 3,219 $ 215,706 Non-Fuel Operating Expenses 179,566 34,472 214,038 173,046 4,907 177,953 Aircraft Fuel 53,912 72 53,984 56,238 — 56,238 Special Items, net (46,991) (18,401) (65,392) (28,111) (3,370) (31,481) Total Operating Expenses 186,487 16,143 202,630 201,173 1,537 202,710 Operating Income $ 46,631 $ 27,541 74,172 $ 11,314 $ 1,682 12,996 Interest Income 24 314 Interest Expense (13,201) (11,058) Other, net 18,049 (494) Income before Income Tax $ 79,044 $ 1,758 (1) As air cargo operations commenced in May 2020, there are limited Cargo amounts included in the three and six month periods ended June 30, 2020. | 18. OPERATING SEGMENTS Operating segments are defined as components of an enterprise about which separate financial information is available that is evaluated regularly by the chief operating decision maker and is used in resource allocation and performance assessments. The Company’s chief operating decision maker is considered to be the Company’s Chief Executive Officer. The Company’s chief operating decision maker makes resource allocation decisions to maximize the Company’s consolidated financial results. Substantially all the Company’s tangible assets are located in the U.S. or relate to flight equipment, which is mobile across geographic markets. For the years ended December 31, 2019 and 2018, the Company was managed as a single business unit that provided air transportation and other services for passengers. The Company has two internal passenger groups (Scheduled and Charter), but since they share resources and expenses are combined, they are considered one Passenger operating segment. The Passenger operating revenues include passenger and other revenue. The Company’s chief operating decision maker reviews discrete financial information on a combined basis for passenger and other revenues. The Company’s Passenger operations are highly concentrated in the U.S. but include service to many international locations, primarily based on scheduled service to Latin America during the winter season and on military charter services. In May 2020, the Company began providing air cargo services under the Amazon Agreement. Beginning in the fourth quarter of 2020, in conjunction with the full deployment of all 12 cargo aircraft under the Amazon Agreement and when our Chief Operating Decision Maker began to regularly review financial information for Cargo operations, Cargo services was identified as a separate operating segment. Certain operating expenses are directly attributable to this operating segment and certain operating expenses are allocated between the operating segments. Fuel consumed in Cargo operations is directly reimbursed by Amazon and therefore presented net on the Consolidated Statements of Operations. Non-Fuel operating expenses are allocated based on metrics such as block hours, fleet count and departures, which best align with the nature of the respective expense. The Special Items relate to CARES Act credits and are allocated based on the respective segment salaries, wages, and benefits. 18. OPERATING SEGMENTS (continued) The following table presents financial information for the Company’s two operating segments: Passenger and Cargo. Assets by segment are not reviewed by the Chief Operating Decision Maker and has not been presented herein. Year Ended December 31, 2020 Passenger Cargo Consolidated Operating Revenues $ 364,677 $ 36,809 $ 401,486 Non-Fuel Operating Expenses 332,742 32,530 365,272 Aircraft Fuel 83,392 — 83,392 Special Items, net (53,842) (10,721) (64,563) Total Operating Expenses 362,292 21,809 384,101 Operating Income $ 2,385 $ 15,000 $ 17,385 Interest Income $ 377 Interest Expense (22,073) Other Non-operating Income (Expense), net (371) Income / (Loss) before Income Tax $ (4,682) |
SUBSEQUENT EVENTS_2
SUBSEQUENT EVENTS | 6 Months Ended |
Jun. 30, 2021 | |
SUBSEQUENT EVENTS | |
SUBSEQUENT EVENTS | 14. SUBSEQUENT EVENTS The Company evaluated subsequent events for the period from the Balance Sheet date through July 28, 2021, the date that the Condensed Consolidated Financial Statements were available to be issued. * * * * * |
BASIS OF PRESENTATION (Polici_2
BASIS OF PRESENTATION (Policies) | 6 Months Ended | 12 Months Ended |
Jun. 30, 2021 | Dec. 31, 2020 | |
BASIS OF PRESENTATION | ||
Recently Adopted Accounting Standards | Recently Adopted Accounting Standards Income Taxes - Simplifying the Accounting for Income Taxes— Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes | Recently Adopted Accounting Standards Revenue from Contracts with Customers— Revenue from Contracts with Customers The adoption of the New Revenue Standard impacts the Company’s accounting for outstanding loyalty points earned through travel by SCA loyalty program members. There is no change in accounting for issuances of loyalty points to SCA’s co-branded card partner as those are currently reported in accordance with the New Revenue Standard. Through December 31, 2018, the Company used the incremental cost method to account for the portion of the loyalty program liabilities related to points earned through travel, which were valued based on the estimated incremental cost of carrying one additional passenger. The New Revenue Standard required the Company to change to the deferred revenue method and apply a relative standalone selling price approach whereby a portion of each passenger ticket sale attributable to loyalty points earned is deferred and recognized in passenger revenue upon future redemption. Upon adoption of the New Revenue Standard, the Company reclassified certain ancillary revenues from Other Revenue to Passenger Revenue. In addition, certain fees previously recognized when incurred by the customer are deferred and recognized as revenue when passenger travel is provided. 2. BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) Upon adoption of the standard on January 1, 2019 the Company made an adjustment to reduce Retained Earnings by $3,477. Leases— Leases Upon adoption of the standard on January 1, 2019 the Company recorded an Operating Lease Right-of-use (“ROU”) Asset of $178,577 (net of balance sheet reclassifications) and Operating Lease Liabilities of $204,790 on the Consolidated Balance Sheet. This ROU Asset was net of $27,004 reclassified from Over-market Liabilities and $791 reclassified from Prepaid Rent. Capitalized Software Costs— Intangibles—Goodwill and Other—Internal-Use Software (Subtopic 350-40): Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract Non-employee Share-based Payment Accounting— Improvements to Non-employee Share-based Payment Accounting Compensation—Stock Compensation Compensation—Stock Compensation Revenue from Contracts with Customers (Topic 606) Changes to the Disclosure Requirements for Fair Value Measurement— Fair Value Measurement (Topic 820): Disclosure Framework—Changes to the Disclosure Requirements for Fair Value Measurement Financial Instruments—Credit Losses— Financial Instruments—Credit Losses : Measurement of Credit Losses on Financial Instruments Simplifying the Test for Goodwill Impairment— Simplifying the Test for Goodwill Impairment 2. BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) Recently Issued Accounting Standards Income Taxes - Simplifying the Accounting for Income Taxes— Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes |
REVENUE (Tables)_2
REVENUE (Tables) | 6 Months Ended | 12 Months Ended |
Jun. 30, 2021 | Dec. 31, 2020 | |
REVENUE | ||
Schedule of significant categories comprising operating revenues | Three Months Ended June 30, Six Months Ended June 30, 2021 2020 2021 2020 Scheduled service $ 67,073 $ 17,882 $ 121,693 $ 132,110 Charter service 28,898 8,491 54,703 37,718 Ancillary 29,159 4,968 52,929 39,999 Passenger 125,130 31,341 229,325 209,827 Cargo 22,098 3,219 43,684 3,219 Other 1,961 816 3,793 2,660 Total Operating Revenue $ 149,189 $ 35,376 $ 276,802 $ 215,706 | Successor Predecessor Year Ended December 31, For the Period April 11, 2018 to For the Period January 1, 2018 to 2020 2019 December 31, 2018 April 10, 2018 Scheduled service $ 193,047 $ 396,113 $ 224,507 $ 132,234 Charter service 98,130 174,562 111,317 40,663 Ancillary (1) 68,055 118,158 — — Passenger 359,232 688,833 335,824 172,897 Cargo 36,809 — — — Ancillary (1) — — 41,065 15,670 Other 5,445 12,551 8,042 8,885 Total Operating Revenue $ 401,486 $ 701,384 $ 384,931 $ 197,452 (1) |
Schedule of operating revenue by geographic region | Three Months Ended June 30, Six Months Ended June 30, 2021 2020 2021 2020 Domestic $ 142,774 $ 34,307 $ 262,020 $ 197,345 Latin America 6,266 1,038 14,228 18,114 Other 149 31 554 247 Total Operating Revenue $ 149,189 $ 35,376 $ 276,802 $ 215,706 | Successor Predecessor Year Ended December 31, For the Period April 11, 2018 to For the Period January 1, 2018 to 2020 2019 December 31, 2018 April 10, 2018 Domestic $ 382,463 $ 666,332 $ 368,456 $ 173,995 Latin America 18,515 33,716 15,628 23,003 Other 508 1,336 847 454 Total Operating Revenue $ 401,486 $ 701,384 $ 384,931 $ 197,452 |
Summary of contract assets and liabilities | June 30, 2021 December 31, 2020 Contract Assets Costs to fulfill contract with Amazon $ 3,203 $ 3,614 Air Traffic Liabilities $ 113,771 $ 101,075 Loyalty Program Liabilities 20,877 22,069 Amazon Deferred Up-front Payment 4,772 5,240 Total Contract Liabilities $ 139,420 $ 128,384 | December 31, 2020 2019 Contract Assets Costs to fulfill contract with Amazon $ 3,614 $ — Air Traffic Liabilities $ 101,075 $ 116,660 Loyalty Program Liabilities 22,069 22,892 Amazon Deferred Start-up Costs Payments Received 5,240 1,633 Total Contract Liabilities $ 128,384 $ 141,185 |
Schedule of change in contract with customer, liability | 2021 2020 Balance—January 1 $ 22,069 $ 22,892 Loyalty Points Earned 1,904 2,621 Loyalty Points Redeemed (1) (3,096) (3,395) Balance—June 30 $ 20,877 $ 22,118 (1) Principally relates to revenue recognized from the redemption of loyalty points for both air and non-air travel awards. Loyalty points are combined in one homogenous pool and are not separately identifiable. As such, the revenue recognized is comprised of points that were part of the Loyalty Program Liabilities balance at the beginning of the period, as well as points that were earned during the period. | 2020 2019 Balance—December 31, 2018 $ 23,950 ASC 606 adoption adjustment (January 1, 2019) 4,867 Balance—January 1 $ 22,892 $ 28,817 Loyalty Points Earned 4,015 6,483 Loyalty Points Redeemed (1) (4,838) (12,408) Balance—December 31 $ 22,069 $ 22,892 (1) Principally relates to revenue recognized from the redemption of loyalty points for both air and non-air travel awards. Loyalty points are combined in one homogenous pool and are not separately identifiable. As such, the redemptions are comprised of points that were part of the Loyalty Program Liabilities balance at the beginning of the period, as well as loyalty points that were earned during the period. |
EARNINGS PER SHARE (Tables)_2
EARNINGS PER SHARE (Tables) | 6 Months Ended | 12 Months Ended |
Jun. 30, 2021 | Dec. 31, 2020 | |
EARNINGS PER SHARE | ||
Summary of computation of basic and diluted earnings per share | Three Months Ended June 30, Six Months Ended June 30, 2021 2020 2021 2020 Numerator: Net Income (Loss) $ 51,753 $ (6,040) $ 64,169 $ 1,211 Denominator: Weighted Average Common Shares Outstanding—Basic 57,156,159 46,805,950 52,850,041 46,805,950 Dilutive effect of Stock Options and Warrants (1) 4,826,282 — 4,553,552 1,437,196 Weighted Average Common Shares Outstanding—Diluted 61,982,441 46,805,950 57,403,593 48,243,146 Basic earnings (loss) per share $ 0.91 $ (0.13) $ 1.21 $ 0.03 Diluted earnings (loss) per share $ 0.83 $ (0.13) $ 1.12 $ 0.02 (1) There were 3,547,524 and 3,636,773 performance-based stock options outstanding at June 30, 2021 and 2020, respectively. As a result of the Company’s initial public offering, 75% of these options are expected to meet the performance conditions and are included in dilutive options at June 30, 2021. At June 30, 2020, these options were excluded from the calculation of diluted EPS since the performance conditions were not considered likely to be met. | Successor Predecessor Year Ended December 31, For the Period April 11, 2018 to For the Period January 1, 2018 to 2020 2019 December 31, 2018 April 10, 2018 Numerator: Net income / (Loss) $ (3,904) $ 46,072 $ (367) $ 25,910 Denominator: Weighted Average Common Shares Outstanding—Basic 46,806,042 46,773,038 46,700,990 100,000,000 Dilutive effects of Warrants — — — — Dilutive effect of Stock Options and Warrants (1) — 1,136,375 — — Weighted Average Common Shares Outstanding—Diluted 46,806,042 47,909,413 46,700,990 100,000,000 Basic earnings / (loss) per share $ (0.08) $ 0.99 $ (0.01) $ 0.26 Diluted earnings / (loss) per share $ (0.08) $ 0.96 $ (0.01) $ 0.26 (1) There were 3,577,252 , 3,502,925 and 3,583,923 performance-based stock options outstanding as of December 31, 2020, 2019 and 2018, respectively, that were excluded from the calculation of diluted EPS. Additionally, in loss periods, the inclusion of unvested options would have an anti-dilutive effect. |
AIRCRAFT (Tables)
AIRCRAFT (Tables) | 6 Months Ended | 12 Months Ended |
Jun. 30, 2021 | Dec. 31, 2020 | |
AIRCRAFT | ||
Summary of aircraft fleet activity | December 31, 2020 Additions Removals June 30, 2021 Passenger: Owned 14 6 — 20 Finance leases 5 2 — 7 Operating leases 12 — (6) 6 Sun Country Airlines' Fleet 31 8 (6) 33 Cargo: Aircraft Operated for Amazon 12 — — 12 Total Aircraft Operated 43 8 (6) 45 December 31, 2019 Additions Removals June 30, 2020 Passenger: Owned 5 9 — 14 Finance leases 10 — (5) 5 Operating leases 14 — (2) 12 Seasonal leases 2 — (2) — Sun Country Airlines' Fleet 31 9 (9) 31 Cargo: Aircraft Operated for Amazon — 7 — 7 Total Aircraft Operated 31 16 (9) 38 | The following tables summarize the Company’s aircraft fleet activity for the years ended December 31, 2020 and 2019, respectively: December 31, 2019 Additions Removals December 31, 2020 Passenger: Owned 5 9 — 14 Finance leases 10 — (5) 5 Operating leases 14 — (2) 12 Seasonal leases 2 — (2) — Sun Country Airlines’ Fleet 31 9 (9) 31 Cargo Aircraft Operated for Amazon — 12 — 12 Total Aircraft Operated 31 21 (9) 43 The 12 cargo aircraft added during 2020 relate to the Amazon Agreement (see Note 1). December 31, 2018 Additions Removals December 31, 2019 Owned 3 2 — 5 Finance leases 5 5 — 10 Operating leases 19 — (5) 14 Seasonal leases 3 2 (3) 2 Sun Country Airlines’ Fleet 30 9 (8) 31 |
DEBT (Tables)_2
DEBT (Tables) | 6 Months Ended | 12 Months Ended |
Jun. 30, 2021 | Dec. 31, 2020 | |
DEBT | ||
Summary of long term debt | June 30, 2021 December 31, 2020 Notes payable under the Company's 2019-1 EETC agreement dated December 2019, with original loan amounts of $248,587 payable in bi-annual installments, in June and December, through December 2027. These notes bear interest at an annual rate of between 4.13% and 6.95% and the weighted average interest rate is 4.78%. $ 211,605 $ 227,347 Delayed Draw Term Loan Facility (see terms and conditions above) 79,494 — U. S. Department of the Treasury CARES Act Loan (see terms and conditions above) — 45,419 Notes payable to Wilmington Trust Company. Notes bear interest at an annual rate of 8.45% and were scheduled to mature Nov. 2023 to Feb. 2024. In April 2021, these notes were repaid. — 12,506 Other Notes payable. These notes bear interest at an annual rate of approximately 5.0% and mature March 2029. 493 529 Total Debt 291,592 285,801 Less: Unamortized debt issuance costs (4,113) (3,338) Less: Current Maturities of Long-term Debt (19,795) (26,118) Total Long-term Debt $ 267,684 $ 256,345 | December 31, 2020 December 31, 2019 Notes payable under the Company’s 2019-1 EETC agreement dated December 2019, with original loan amounts of $248,587 payable in bi-annual installments through December 2027. These notes bear interest at an annual rate of between 4.13% and 6.95% and are secured by the equipment for which the loan was used $ 227,347 $ 28,280 U. S. Department of the Treasury CARES Act Loan (see terms and conditions above) 45,419 — Notes payable to Wilmington Trust Company dated October and November 2018, with original loan amounts totaling $55,671 payable in monthly installments through November 2023. These notes bore interest at an annual rate of 8.45%. They were refinanced in January 2020 through 2019-1 EETC notes — 46,617 Note payable to Wilmington Trust Company dated February 2019, with an original loan amount of $12,750 payable in monthly installments of $151 through January 2024, and then final lump sum payment of $2,825 in February 2024. This note bears interest at an annual rate of 8.45% and is secured by the equipment for which the loan was used 9,813 11,237 Note payable to Wilmington Trust Company dated November 2018, with an original loan amount of $3,671 payable in monthly installments of $44 through October 2023, and then final lump sum payment of $1,101 in November 2023. This note bears interest at an annual rate of 8.45% and is secured by the equipment for which the loan was used 2,693 3,105 Note payable to Alliance Bank dated February 2019, with an original loan amount of $600 payable in monthly installments of $5 through March 2029. This note bears interest at an annual rate of 5.0% 519 569 Notes payable to Riverland Bank dated between April 2015 and May 2016, with original loan amounts totaling $734 payable in monthly installments with expirations between April 2020 and April 2021. The notes bear interest at an annual rate of 5.15% and are secured by the equipment for which the loan was used 10 97 Total Debt 285,801 89,905 Less: Unamortized debt issuance costs (3,338) (2,988) Less: Current Maturities of Long-term Debt (26,118) (13,197) Total Long-term Debt $ 256,345 $ 73,720 |
Schedule of future maturities of the outstanding debt | Debt Principal Amortization of Debt Payments Issuance Costs Net Debt Remainder of 2021 $ 10,661 $ (509) $ 10,152 2022 30,367 (983) 29,384 2023 42,358 (908) 41,450 2024 44,000 (785) 43,215 2025 49,087 (670) 48,417 Thereafter 115,119 (258) 114,861 Total as of June 30, 2021 $ 291,592 $ (4,113) $ 287,479 | Year Ending December 31 Debt Principal Payments Amortization of Debt Issuance Costs Net Debt 2021 $ 26,928 $ (810) $ 26,118 2022 28,846 (752) 28,094 2023 43,819 (678) 43,141 2024 67,659 (554) 67,105 2025 64,810 (342) 64,468 Thereafter 53,739 (202) 53,537 Total $ 285,801 $ (3,338) $ 282,463 |
Schedule of debt measured at fair value | June 30, 2021 December 31, 2020 Carrying Amount $ 291,592 $ 285,801 Fair Value $ 281,640 $ 279,119 | December 31, 2020 December 31, 2019 Carrying Amount $ 285,801 $ 89,905 Fair Value $ 279,119 $ 96,342 |
FUEL DERIVATIVES AND RISK MAN_5
FUEL DERIVATIVES AND RISK MANAGEMENT (Tables) | 6 Months Ended | 12 Months Ended |
Jun. 30, 2021 | Dec. 31, 2020 | |
FUEL DERIVATIVES AND RISK MANAGEMENT | ||
Schedule of changes in derivative assets (liabilities) | Six Months Ended June 30, 2021 2020 Balance - January 1 $ (1,174) $ 2,233 Non-cash Gains (Losses) 3,599 (16,056) Contract Settlements (827) 4,990 Balance - June 30 $ 1,598 $ (8,833) | Year Ended December 31, 2020 2019 Balance—January 1 $ 2,233 $ (12,006) Non-cash gains (losses) (12,206) 10,791 Contract settlements 8,800 3,448 Balance—December 31 $ (1,173) $ 2,233 |
Schedule of fuel derivative gains (losses) | Three Months Ended June 30, Six Months Ended June 30, 2021 2020 2021 2020 Non-cash Gains (Losses) $ 1,213 $ 5,695 $ 3,599 $ (16,056) Cash Premiums Paid — (1,617) — (1,901) Total Fuel Derivative Gains (Losses) $ 1,213 $ 4,078 $ 3,599 $ (17,957) | Year Ended December 31, For the Period 2020 2019 December 31, 2018 Non-cash gains (losses) $ (12,206) $ 10,791 $ (12,006) Cash Premiums Paid (2,053) (665) (2,280) Total Fuel Derivative gains (losses) $ (14,259) $ 10,126 $ (14,286) |
FAIR VALUE MEASUREMENTS (Tabl_2
FAIR VALUE MEASUREMENTS (Tables) | 6 Months Ended | 12 Months Ended |
Jun. 30, 2021 | Dec. 31, 2020 | |
FAIR VALUE MEASUREMENTS | ||
Summary of assets and liabilities measured at fair value on a recurring basis | June 30, 2021 Level 1 Level 2 Level 3 Total Assets Fuel Derivative Contracts $ — $ 1,598 $ — $ 1,598 Total Assets measured at fair value on a recurring basis $ — $ 1,598 $ — $ 1,598 December 31, 2020 Level 1 Level 2 Level 3 Total Liabilities Fuel Derivative Contracts $ — $ 1,174 $ — $ 1,174 Total Liabilities measured at fair value on a recurring basis $ — $ 1,174 $ — $ 1,174 | December 31, 2020 Level 1 Level 2 Level 3 Total Liabilities Fuel Derivative Contracts $ — $ 1,173 $ — $ 1,173 Total Liabilities measured at fair value on a recurring basis $ — $ 1,173 $ — $ 1,173 December 31, 2019 Level 1 Level 2 Level 3 Total Assets Fuel Derivative Contracts $ — $ 2,233 $ — $ 2,233 Total Assets measured at fair value on a recurring basis $ — $ 2,233 $ — $ 2,233 |
SPECIAL ITEMS, NET (Tables)_2
SPECIAL ITEMS, NET (Tables) | 6 Months Ended | 12 Months Ended |
Jun. 30, 2021 | Dec. 31, 2020 | |
SPECIAL ITEMS, NET | ||
Schedule of special items, net | Three Months Ended June 30, Six Months Ended June 30, 2021 2020 2021 2020 CARES Act grant recognition (1) $ (39,378) $ (31,516) $ (71,587) $ (31,516) CARES Act employee retention credit (2) (446) — (780) — Aircraft lease buy-out expense (3) 1,299 — 6,963 — Other 5 35 12 35 Total Special Items, net $ (38,520) $ (31,481) $ (65,392) $ (31,481) (1) In the quarter ended March 31, 2021, the Treasury awarded the Company a grant of $32,208 under PSP2. On April 22, 2021, the Company received an additional $4,831 from the Treasury as a top-off grant under PSP2. Further, during the quarter ended June 30, 2021, the Company received a grant of $34,547 under PSP3. (2) The CARES Act Employee Retention credit relates to a refundable tax credit against certain employment taxes. (3) Five aircraft were purchased in March 2021 that were previously under operating leases. One additional aircraft was purchased in April 2021 that was previously under an operating lease. Aircraft lease buy-out expense represents the net costs incurred to terminate the leases on those six aircraft. This includes the associated lease termination costs, write-off of previously capitalized maintenance deposits, and the write-off of over-market liabilities (see Note 6). | Successor Predecessor Year Ended December 31, For the Period For the Period 2020 2019 December 31, 2018 April 10, 2018 CARES Act grant recognition (1) $ (62,312) $ — $ — $ — CARES Act employee retention credit (2) (2,328) — — — Contractual obligations for retired technology (3) — 7,578 — — Sale of airport slot rights (4) — (1,200) — — Sun Country Rewards program modifications (5) — — (8,463) — Early-out payments and other outsourcing expenses (6) — — 1,757 271 Other (7) 77 714 — — Total Special Items, net $ (64,563) $ 7,092 $ (6,706) $ 271 (1) Relates to the credit recognized under the CARES Act Payroll Support Program through December 31, 2020. Under the Payroll Support Program, the United States Department of the Treasury provided the Company with a Payroll Support grant, which was to be used exclusively for the continuation of payments for salaries, wages, and benefits. (see Note 3 for more information). (2) Relates to the credit recognized under the CARES Act Employee Retention credit which is a refundable tax credit against certain employment taxes (see Note 3 for more information). (3) This was a charge related to contractual obligations for retired technology. In connection with implementing SCA’s new reservations systems, the Company incurred obligations under the contracts for existing systems that were being phased out ahead of their scheduled contract terms. 16. SPECIAL ITEMS, NET (continued) (4) Represents proceeds from the sale of unused airport slot rights. SCA does not hold any other remaining airport slot rights; therefore this gain does not reflect the Company’s continuing operations. (5) This reduction to expense is associated with changes to the terms of the Sun Country Rewards program. As of November 3, 2018, the Company modified policies within the program which accelerated loyalty point expiration, while making points more valuable for its members. (6) Related to early-out payments and other expenses incurred in connection with outsourcing certain operations personnel and other employee initiatives. These efforts were primarily related to airport station, flight attendants and ground handling employees. (7) Consists of employee relocation costs due to closing flight attendant bases and costs to exit the Company’s prior headquarters building. |
OPERATING SEGMENTS (Tables)_2
OPERATING SEGMENTS (Tables) | 6 Months Ended | 12 Months Ended |
Jun. 30, 2021 | Dec. 31, 2020 | |
OPERATING SEGMENTS | ||
Summary of financial information for the operating segments | Three Months Ended June 30, 2021 Three Months Ended June 30, 2020 Passenger Cargo Consolidated Passenger Cargo (1) Consolidated Operating Revenues $ 127,091 $ 22,098 $ 149,189 $ 32,157 $ 3,219 $ 35,376 Non-Fuel Operating Expenses 92,361 16,401 108,762 63,507 4,907 68,414 Aircraft Fuel 29,657 52 29,709 677 — 677 Special Items, net (28,784) (9,736) (38,520) (28,111) (3,370) (31,481) Total Operating Expenses 93,234 6,717 99,951 36,073 1,537 37,610 Operating Income (Loss) $ 33,857 $ 15,381 49,238 $ (3,916) $ 1,682 (2,234) Interest Income 9 63 Interest Expense (6,080) (5,442) Other, net 18,054 (325) Income (Loss) before Income Tax $ 61,221 $ (7,938) Six Months Ended June 30, 2021 Six Months Ended June 30, 2020 Passenger Cargo Consolidated Passenger Cargo (1) Consolidated Operating Revenues $ 233,118 $ 43,684 $ 276,802 $ 212,487 $ 3,219 $ 215,706 Non-Fuel Operating Expenses 179,566 34,472 214,038 173,046 4,907 177,953 Aircraft Fuel 53,912 72 53,984 56,238 — 56,238 Special Items, net (46,991) (18,401) (65,392) (28,111) (3,370) (31,481) Total Operating Expenses 186,487 16,143 202,630 201,173 1,537 202,710 Operating Income $ 46,631 $ 27,541 74,172 $ 11,314 $ 1,682 12,996 Interest Income 24 314 Interest Expense (13,201) (11,058) Other, net 18,049 (494) Income before Income Tax $ 79,044 $ 1,758 (1) As air cargo operations commenced in May 2020, there are limited Cargo amounts included in the three and six month periods ended June 30, 2020. | Year Ended December 31, 2020 Passenger Cargo Consolidated Operating Revenues $ 364,677 $ 36,809 $ 401,486 Non-Fuel Operating Expenses 332,742 32,530 365,272 Aircraft Fuel 83,392 — 83,392 Special Items, net (53,842) (10,721) (64,563) Total Operating Expenses 362,292 21,809 384,101 Operating Income $ 2,385 $ 15,000 $ 17,385 Interest Income $ 377 Interest Expense (22,073) Other Non-operating Income (Expense), net (371) Income / (Loss) before Income Tax $ (4,682) |
COMPANY BACKGROUND- Stock split
COMPANY BACKGROUND- Stock split (Details) | 1 Months Ended |
Mar. 31, 2021shares | |
COMPANY BACKGROUND | |
Stock split ratio | 18.8886 |
Share issued as a result of stock split | 44,226,587 |
COMPANY BACKGROUND - Initial Pu
COMPANY BACKGROUND - Initial Public Offering (Details) - USD ($) $ / shares in Units, $ in Thousands | Mar. 19, 2021 | Mar. 17, 2021 | Mar. 16, 2021 | May 31, 2021 | Jun. 30, 2021 | Dec. 31, 2018 |
Shares issued | 1,416,645 | |||||
Offering expenses | $ 8,669 | |||||
SCA Horus Holdings, LLC | ||||||
Shares issued | 7,250,000 | |||||
Share price | $ 34.50 | |||||
IPO | ||||||
Shares issued | 10,454,545 | 9,090,909 | 8,337,500 | |||
Share price | $ 24 | $ 24 | ||||
Offering expenses | $ 640 | |||||
Proceeds from issuance of common stock | $ 225,006 | |||||
Underwriters option | ||||||
Shares issued | 1,363,636 | 1,087,500 | ||||
Private placement | SCA Horus Holdings, LLC | P A R Investment Partners, L.P | ||||||
Shares issued | 2,216,312 | |||||
Aggregate purchase price | $ 50,000 | |||||
Share price percentage of I P O share price | 94.00% | |||||
Private placement | SCA Horus Holdings, LLC | Certain funds or accounts managed by an investment adviser subsidiary of Blackrock, Inc | ||||||
Shares issued | 2,216,308 | |||||
Aggregate purchase price | $ 50,000 | |||||
Share price percentage of I P O share price | 94.00% |
COMPANY BACKGROUND (Details)_2
COMPANY BACKGROUND (Details) $ / shares in Units, $ in Thousands | Jun. 27, 2020aircraft | Jun. 26, 2020aircraft | Dec. 13, 2019USD ($)item$ / sharesshares | Mar. 31, 2021shares | Jun. 30, 2021shares | Jun. 30, 2020item | Jun. 30, 2021shares | Jun. 30, 2020shares | Dec. 31, 2020USD ($)shares | Dec. 31, 2019$ / sharesshares | Jan. 30, 2020$ / shares |
Warrants issued | 9,482,606 | ||||||||||
Exercise price | $ / shares | $ 0.0005 | $ 0.0005 | |||||||||
Amazon Agreement | |||||||||||
Term of each renewal option | 6 years | 2 years | |||||||||
Number of extension option | item | 2 | 2 | |||||||||
Term of agreement | 2 years | 180 days | |||||||||
Threshold term of agreement | 10 years | ||||||||||
Number of aircrafts operated | aircraft | 12 | 10 | |||||||||
Warrants issued | 9,482,606 | 9,482,606 | |||||||||
Exercise price | $ / shares | $ 15.17 | $ 15.17 | |||||||||
Warrants vested | 632,183 | 189,652 | 379,304 | 0 | 632,183 | ||||||
Number of warrants that vest on achievement of each milestone | 63,217 | 63,217 | |||||||||
Milestone achievement for warrants to vest | $ | $ 8,000 | $ 8,000 | |||||||||
Cumulative warrants vested | 1,264,356 | 1,264,356 | 252,869 | ||||||||
2021 Omnibus Incentive Plan | Maximum | |||||||||||
Common stock-shares authorized | 3,600,000 | ||||||||||
2018 Equity Incentive Plan | |||||||||||
Number of share grants | 0 |
BASIS OF PRESENTATION (Details)
BASIS OF PRESENTATION (Details) - USD ($) $ / shares in Units, $ in Thousands | Dec. 31, 2020 | Jun. 30, 2020 | Mar. 31, 2020 | Dec. 31, 2019 | Jun. 30, 2021 | Apr. 11, 2018 |
BASIS OF PRESENTATION | ||||||
Common stock-par value (in dollars per share) | $ 0.01 | $ 0 | $ 0.01 | $ 0 | ||
Reclassification in common stock value | $ 238,694 | $ 238,694 | $ 238,694 | $ 239,073 |
IMPACT OF THE COVID19 PANDEMI_7
IMPACT OF THE COVID19 PANDEMIC (Details) - USD ($) $ in Thousands | Apr. 22, 2021 | Feb. 02, 2021 | Oct. 26, 2020 | Jun. 30, 2021 | Mar. 31, 2021 | Jun. 30, 2020 | Apr. 10, 2018 | Jun. 30, 2021 | Jun. 30, 2020 | Dec. 31, 2018 | Dec. 31, 2020 | Dec. 31, 2019 |
IMPACT OF THE COVID19 PANDEMIC | ||||||||||||
Grants recognized | $ 39,378 | $ 31,516 | $ 71,587 | $ 31,516 | $ 62,312 | |||||||
Grants awarded | $ 32,208 | |||||||||||
Impairment of its long-lived assets | $ 0 | $ 0 | 0 | $ 0 | ||||||||
CARES Act employee retention credit | 446 | 334 | $ 780 | 2,328 | ||||||||
Subsequent Event | ||||||||||||
IMPACT OF THE COVID19 PANDEMIC | ||||||||||||
Proceeds from government grants | $ 16,104 | |||||||||||
U. S. Department of the Treasury CARES Act Loan | ||||||||||||
IMPACT OF THE COVID19 PANDEMIC | ||||||||||||
Grants recognized | 62,312 | |||||||||||
Loan received | $ 45,000 | 45,000 | ||||||||||
PSP2 | ||||||||||||
IMPACT OF THE COVID19 PANDEMIC | ||||||||||||
Grants recognized | $ 4,831 | 4,831 | $ 32,208 | $ 62,312 | ||||||||
PSP3 | ||||||||||||
IMPACT OF THE COVID19 PANDEMIC | ||||||||||||
Grants awarded | $ 34,547 |
REVENUE - Disaggregation of O_2
REVENUE - Disaggregation of Operating Revenue (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | 9 Months Ended | 12 Months Ended | |||||||||||
Jun. 30, 2021 | Dec. 31, 2020 | Sep. 30, 2020 | Jun. 30, 2020 | Mar. 31, 2020 | Dec. 31, 2019 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Apr. 10, 2018 | Jun. 30, 2021 | Jun. 30, 2020 | Dec. 31, 2018 | Dec. 31, 2020 | Dec. 31, 2019 | |
REVENUE | |||||||||||||||
Operating Revenues | $ 149,189 | $ 107,807 | $ 77,973 | $ 35,376 | $ 180,330 | $ 163,864 | $ 171,478 | $ 169,373 | $ 196,669 | $ 197,452 | $ 276,802 | $ 215,706 | $ 384,931 | $ 401,486 | $ 701,384 |
Domestic | |||||||||||||||
REVENUE | |||||||||||||||
Operating Revenues | 142,774 | 34,307 | 173,995 | 262,020 | 197,345 | 368,456 | 382,463 | 666,332 | |||||||
Latin America | |||||||||||||||
REVENUE | |||||||||||||||
Operating Revenues | 6,266 | 1,038 | 23,003 | 14,228 | 18,114 | 15,628 | 18,515 | 33,716 | |||||||
Other | |||||||||||||||
REVENUE | |||||||||||||||
Operating Revenues | 149 | 31 | 454 | 554 | 247 | 847 | 508 | 1,336 | |||||||
Passenger | |||||||||||||||
REVENUE | |||||||||||||||
Operating Revenues | 125,130 | 31,341 | 172,897 | 229,325 | 209,827 | 335,824 | 359,232 | 688,833 | |||||||
Scheduled service | |||||||||||||||
REVENUE | |||||||||||||||
Operating Revenues | 67,073 | 17,882 | 132,234 | 121,693 | 132,110 | 224,507 | 193,047 | 396,113 | |||||||
Charter service | |||||||||||||||
REVENUE | |||||||||||||||
Operating Revenues | 28,898 | 8,491 | 40,663 | 54,703 | 37,718 | 111,317 | 98,130 | 174,562 | |||||||
Ancillary | |||||||||||||||
REVENUE | |||||||||||||||
Operating Revenues | 29,159 | 4,968 | 52,929 | 39,999 | 68,055 | 118,158 | |||||||||
Cargo | |||||||||||||||
REVENUE | |||||||||||||||
Operating Revenues | 22,098 | 3,219 | 43,684 | 3,219 | 36,809 | ||||||||||
Other | |||||||||||||||
REVENUE | |||||||||||||||
Operating Revenues | $ 1,961 | $ 816 | $ 24,555 | $ 3,793 | $ 2,660 | $ 49,107 | $ 5,445 | $ 12,551 |
REVENUE - Contract Balances (_2
REVENUE - Contract Balances (Details) $ in Thousands | 3 Months Ended | 6 Months Ended | 9 Months Ended | 12 Months Ended | ||||
Jun. 30, 2021USD ($) | Jun. 30, 2020USD ($) | Apr. 10, 2018USD ($) | Jun. 30, 2021USD ($)aircraft | Jun. 30, 2020USD ($) | Dec. 31, 2018USD ($) | Dec. 31, 2020USD ($)aircraft | Dec. 31, 2019USD ($) | |
REVENUE | ||||||||
Maintenance expense | $ 11,300 | $ 2,426 | $ 9,508 | $ 20,510 | $ 8,904 | $ 15,491 | $ 27,416 | $ 35,286 |
Total Contract Liabilities | 139,420 | 139,420 | 128,384 | 141,185 | ||||
Air Traffic Liabilities | ||||||||
REVENUE | ||||||||
Total Contract Liabilities | 113,771 | $ 113,771 | $ 101,075 | 116,660 | ||||
Threshold period in which tickets can be booked in advance | 12 months | 12 months | ||||||
Loyalty Program Liabilities | ||||||||
REVENUE | ||||||||
Total Contract Liabilities | 20,877 | $ 22,118 | $ 20,877 | 22,118 | $ 23,950 | $ 22,069 | 22,892 | |
Revenue recognized | 3,096 | $ 3,395 | 4,838 | 12,408 | ||||
Amazon Deferred Up-front Payment | ||||||||
REVENUE | ||||||||
Total Contract Liabilities | 4,772 | $ 4,772 | 5,240 | $ 1,633 | ||||
Revenue recognized | $ 393 | |||||||
Costs to fulfill contract with Amazon | ||||||||
REVENUE | ||||||||
Number of cargo aircraft | aircraft | 12 | 12 | ||||||
Maintenance expense | 169 | $ 307 | $ 271 | |||||
Contract Assets | $ 3,203 | 3,203 | 3,614 | |||||
Passenger | Air Traffic Liabilities | ||||||||
REVENUE | ||||||||
Revenue recognized | $ 82,206 | $ 110,868 |
REVENUE (Details)_2
REVENUE (Details) - Amazon Deferred Up-front Payment - USD ($) $ in Thousands | Dec. 13, 2019 | Dec. 31, 2019 | Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2021 | Jun. 30, 2020 | Dec. 31, 2020 | Dec. 31, 2019 |
REVENUE | ||||||||
Proceeds from startup costs | $ 10,300 | $ 6,300 | ||||||
Warrants vested | 632,183 | 632,183 | ||||||
Fair value of warrants vested | $ 4,667 | 4,667 | ||||||
Remaining start up costs | $ 5,633 | $ 5,633 | ||||||
Revenue recognized | $ 393 | |||||||
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2019-12-01 | ||||||||
REVENUE | ||||||||
Amortization period | 6 years | 6 years | ||||||
Other Liabilities | ||||||||
REVENUE | ||||||||
Remaining start up costs | $ 5,633 | $ 5,633 | ||||||
Cargo | ||||||||
REVENUE | ||||||||
Revenue recognized | $ 237 | $ 38 | $ 468 | $ 38 |
Revenue - Loyalty Program (De_2
Revenue - Loyalty Program (Details) - USD ($) $ in Thousands | 6 Months Ended | 12 Months Ended | ||
Jun. 30, 2021 | Jun. 30, 2020 | Dec. 31, 2020 | Dec. 31, 2019 | |
Changes in the Loyalty Program Liabilities | ||||
Balance - January 1 | $ 128,384 | $ 141,185 | $ 141,185 | |
Balance - June 30 | 139,420 | 128,384 | $ 141,185 | |
Loyalty Program Liabilities | ||||
Changes in the Loyalty Program Liabilities | ||||
Balance - January 1 | 22,069 | 22,892 | 22,892 | 23,950 |
Loyalty Points Earned | 1,904 | 2,621 | ||
Loyalty Points Redeemed | (3,096) | (3,395) | (4,838) | (12,408) |
Balance - June 30 | $ 20,877 | $ 22,118 | $ 22,069 | $ 22,892 |
Loyalty points redemption period | 2 years | 2 years |
EARNINGS PER SHARE - Computat_2
EARNINGS PER SHARE - Computation of basic and diluted earnings (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 6 Months Ended | 9 Months Ended | 12 Months Ended | ||||||||||||
Jun. 30, 2021 | Mar. 31, 2021 | Dec. 31, 2020 | Sep. 30, 2020 | Jun. 30, 2020 | Mar. 31, 2020 | Dec. 31, 2019 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Apr. 10, 2018 | Jun. 30, 2021 | Jun. 30, 2020 | Dec. 31, 2018 | Dec. 31, 2020 | Dec. 31, 2019 | |
Numerator: | ||||||||||||||||
Net Income (Loss) | $ 51,753 | $ 12,416 | $ (8,042) | $ 2,927 | $ (6,040) | $ 7,251 | $ 5,018 | $ 3,973 | $ 3,713 | $ 33,368 | $ 25,910 | $ 64,169 | $ 1,211 | $ (367) | $ (3,904) | $ 46,072 |
Denominator: | ||||||||||||||||
Weighted Average Common Shares Outstanding - Basic | 57,156,159 | 46,805,950 | 100,000,000 | 52,850,041 | 46,805,950 | 46,700,990 | 46,806,042 | 46,773,038 | ||||||||
Dilutive effect of Stock Options and Warrants (1) | 4,826,282 | 4,553,552 | 1,437,196 | 1,136,375 | ||||||||||||
Weighted Average Common Shares Outstanding - Diluted | 61,982,441 | 46,805,950 | 100,000,000 | 57,403,593 | 48,243,146 | 46,700,990 | 46,806,042 | 47,909,413 | ||||||||
Basic earnings (loss) per share | $ 0.91 | $ (0.17) | $ 0.06 | $ (0.13) | $ 0.16 | $ 0.11 | $ 0.08 | $ 0.08 | $ 0.71 | $ 0.26 | $ 1.21 | $ 0.03 | $ (0.01) | $ (0.08) | $ 0.99 | |
Diluted earnings (loss) per share | $ 0.83 | $ (0.17) | $ 0.06 | $ (0.13) | $ 0.15 | $ 0.10 | $ 0.08 | $ 0.08 | $ 0.71 | $ 0.26 | $ 1.12 | $ 0.02 | $ (0.01) | $ (0.08) | $ 0.96 |
EARNINGS PER SHARE (Details)_2
EARNINGS PER SHARE (Details) - $ / shares | Jan. 30, 2020 | Jun. 30, 2021 | Dec. 31, 2020 | Jun. 30, 2020 | Dec. 31, 2019 | Dec. 31, 2018 |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||||
Outstanding shares | 40,005,885 | |||||
Warrants held | 40,005,885 | |||||
Exercise price | $ 0.0005 | $ 0.0005 | ||||
Performance-based stock options | ||||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||||
Outstanding shares | 3,547,524 | 3,577,252 | 3,636,773 | 3,502,925 | 3,583,923 | |
Percentage Of Stock Options Expected To Meet Performance Conditions | 75.00% |
AIRCRAFT - Aircraft fleet (Deta
AIRCRAFT - Aircraft fleet (Details) $ in Thousands | 1 Months Ended | 3 Months Ended | 6 Months Ended | 9 Months Ended | 12 Months Ended | |||||||||
Apr. 30, 2021aircraft | Mar. 31, 2021aircraft | Jan. 31, 2020aircraft | Dec. 31, 2019USD ($)aircraft | Feb. 28, 2019aircraft | Jun. 30, 2021USD ($)aircraft | Jun. 30, 2020USD ($)aircraft | Mar. 31, 2020aircraft | Apr. 10, 2018USD ($) | Jun. 30, 2021USD ($)aircraft | Jun. 30, 2020USD ($)aircraft | Dec. 31, 2018USD ($)aircraft | Dec. 31, 2020USD ($)aircraft | Dec. 31, 2019USD ($)aircraft | |
AIRCRAFT - Owned and Leased | ||||||||||||||
Balance at beginning of period | 31 | 31 | 43 | 31 | 31 | |||||||||
Additions | 8 | 16 | 21 | |||||||||||
Removals | (6) | (9) | (9) | |||||||||||
Balance at end of period | 31 | 45 | 38 | 45 | 38 | 43 | 31 | |||||||
Number of aircrafts previously under operating leases | 1 | 5 | 6 | 2 | ||||||||||
Amortization expense | $ | $ 119 | $ 4,475 | $ 11,948 | $ 13,104 | ||||||||||
Passenger | ||||||||||||||
AIRCRAFT - Owned and Leased | ||||||||||||||
Balance at beginning of period | 31 | 31 | 31 | 31 | 31 | 30 | ||||||||
Additions | 8 | 9 | 9 | 9 | ||||||||||
Removals | (6) | (9) | (9) | (8) | ||||||||||
Balance at end of period | 31 | 33 | 31 | 33 | 31 | 30 | 31 | 31 | ||||||
Number of new aircrafts purchased | 2 | 2 | ||||||||||||
Number of aircrafts refinanced | 3 | |||||||||||||
Passenger | Owned | ||||||||||||||
AIRCRAFT - Owned and Leased | ||||||||||||||
Balance at beginning of period | 5 | 5 | 14 | 5 | 5 | 3 | ||||||||
Additions | 6 | 9 | 9 | 2 | ||||||||||
Balance at end of period | 5 | 20 | 14 | 20 | 14 | 3 | 14 | 5 | ||||||
Number of aircrafts previously under operating leases | 6 | 2 | ||||||||||||
Number of aircrafts under finance leases | 2 | |||||||||||||
Number of aircrafts previously under finance leases | 5 | |||||||||||||
Accumulated depreciation on owned assets | $ | $ 21,030 | $ 67,495 | $ 67,495 | $ 52,048 | $ 21,030 | |||||||||
Depreciation expense | $ | $ 9,642 | $ 6,370 | 2,315 | $ 18,442 | $ 11,491 | $ 6,731 | $ 31,657 | $ 17,347 | ||||||
Passenger | Finance leases | ||||||||||||||
AIRCRAFT - Owned and Leased | ||||||||||||||
Balance at beginning of period | 10 | 10 | 5 | 10 | 10 | 5 | ||||||||
Additions | 2 | 5 | ||||||||||||
Removals | (5) | (5) | ||||||||||||
Balance at end of period | 10 | 7 | 5 | 7 | 5 | 5 | 5 | 10 | ||||||
Number of aircrafts previously under finance leases | 5 | |||||||||||||
Accumulated amortization on finance lease assets | $ | $ 6,698 | $ 21,209 | $ 21,209 | $ 13,018 | $ 6,698 | |||||||||
Amortization expense | $ | $ 2,692 | $ 4,665 | $ 119 | $ 5,384 | $ 8,955 | $ 4,476 | $ 11,948 | $ 13,104 | ||||||
Passenger | Operating leases | ||||||||||||||
AIRCRAFT - Owned and Leased | ||||||||||||||
Balance at beginning of period | 14 | 14 | 12 | 14 | 14 | 19 | ||||||||
Removals | (6) | (2) | (2) | (5) | ||||||||||
Balance at end of period | 14 | 6 | 12 | 6 | 12 | 19 | 12 | 14 | ||||||
Number of aircrafts previously under operating leases | 1 | |||||||||||||
Passenger | Seasonal leases | ||||||||||||||
AIRCRAFT - Owned and Leased | ||||||||||||||
Balance at beginning of period | 2 | 2 | 2 | 2 | 3 | |||||||||
Additions | 2 | |||||||||||||
Removals | (2) | (2) | (3) | |||||||||||
Balance at end of period | 2 | 3 | 2 | |||||||||||
Cargo | Aircraft Operated for Amazon | ||||||||||||||
AIRCRAFT - Owned and Leased | ||||||||||||||
Balance at beginning of period | 12 | |||||||||||||
Additions | 7 | 12 | ||||||||||||
Balance at end of period | 12 | 7 | 12 | 7 | 12 | |||||||||
Boeing 737-800 | ||||||||||||||
AIRCRAFT - Owned and Leased | ||||||||||||||
Balance at end of period | 44 | 44 | ||||||||||||
Boeing 737-700 | ||||||||||||||
AIRCRAFT - Owned and Leased | ||||||||||||||
Balance at end of period | 1 | 1 | ||||||||||||
Notes payable under the Company's 2019-1 EETC agreement | ||||||||||||||
AIRCRAFT - Owned and Leased | ||||||||||||||
Additions | 1 | 2 |
AIRCRAFT - Aircraft Lease Payme
AIRCRAFT - Aircraft Lease Payment Deferrals (Details) - USD ($) $ in Thousands | Jun. 30, 2021 | Dec. 31, 2020 |
AIRCRAFT - Owned and Leased | ||
Aircraft Lease Payment Deferrals | $ 0 | $ 7,569 |
Finance leases | ||
AIRCRAFT - Owned and Leased | ||
Aircraft Lease Payment Deferrals | 2,133 | |
Operating leases | ||
AIRCRAFT - Owned and Leased | ||
Aircraft Lease Payment Deferrals | $ 5,436 |
AIRCRAFT - Aircraft Maintenance
AIRCRAFT - Aircraft Maintenance Deposits Contra-Assets (Details) $ in Thousands | Apr. 11, 2018USD ($)aircraft | Apr. 30, 2021aircraft | Mar. 31, 2021aircraft | Jun. 30, 2021USD ($) | Jun. 30, 2020USD ($) | Apr. 10, 2018USD ($) | Jun. 30, 2021USD ($)aircraft | Jun. 30, 2020USD ($) | Dec. 31, 2018USD ($) | Dec. 31, 2020USD ($)aircraft | Dec. 31, 2019USD ($) |
AIRCRAFT - Owned and Leased | |||||||||||
Number of aircrafts previously under operating leases | aircraft | 1 | 5 | 6 | 2 | |||||||
Aircraft maintenance deposits contra assets | |||||||||||
AIRCRAFT - Owned and Leased | |||||||||||
Remaining unamortized balance contra assets | $ 22,792 | $ 22,792 | $ 36,729 | $ 43,844 | |||||||
Reduction in contra assets | (13,937) | (7,115) | |||||||||
Decrease in purchase of aircrafts previously leased | $ 5,624 | ||||||||||
Number of aircrafts previously under operating leases | aircraft | 6 | 2 | |||||||||
Contra assets as a reduction to maintenance expense | 850 | $ 0 | 850 | $ 328 | $ 6,516 | $ 1,402 | 12,263 | ||||
Aircraft maintenance deposits contra assets | Owned | |||||||||||
AIRCRAFT - Owned and Leased | |||||||||||
Reduction in contra assets | $ 12,749 | ||||||||||
Over-market lease rates | |||||||||||
AIRCRAFT - Owned and Leased | |||||||||||
Remaining unamortized balance contra assets | 11,444 | 11,444 | 16,501 | ||||||||
Decrease in purchase of aircrafts previously leased | $ 3,765 | ||||||||||
Number of aircrafts previously under operating leases | aircraft | 6 | ||||||||||
Over market liabilities | 16,892 | $ 16,892 | 37,409 | ||||||||
Reduction in over-market maintenance reserve liabilities | (20,517) | ||||||||||
Amortization of Over-market Liabilities | $ 1,618 | $ 3,726 | $ 0 | 4,373 | $ 7,830 | $ 17,275 | $ 14,110 | $ 20,386 | |||
Over-market lease rates | Owned | |||||||||||
AIRCRAFT - Owned and Leased | |||||||||||
Reduction in over-market maintenance reserve liabilities | $ 17,435 |
DEBT - Lines of Credit (Detai_2
DEBT - Lines of Credit (Details) $ in Thousands | Apr. 06, 2021aircraft | Feb. 10, 2021USD ($) | Jun. 30, 2021USD ($) | Apr. 30, 2021aircraft | Mar. 31, 2021USD ($)aircraft | Mar. 31, 2022USD ($) | Jun. 30, 2021USD ($) | Jun. 30, 2021USD ($)aircraft | Dec. 31, 2021USD ($) | Dec. 31, 2020USD ($)aircraft | May 15, 2020USD ($) | Dec. 31, 2019USD ($) | Dec. 31, 2018USD ($) |
DEBT | |||||||||||||
Maximum borrowing capacity | $ 25,000 | $ 20,000 | |||||||||||
Commitment fee on unused facility (as a percent) | 0.50% | ||||||||||||
Number of aircrafts previously under operating leases | aircraft | 1 | 5 | 6 | 2 | |||||||||
Minimum | |||||||||||||
DEBT | |||||||||||||
Maximum borrowing capacity | 20,000 | ||||||||||||
Maximum | |||||||||||||
DEBT | |||||||||||||
Maximum borrowing capacity | $ 25,000 | ||||||||||||
Prior revolving credit agreement | |||||||||||||
DEBT | |||||||||||||
Maximum borrowing capacity | $ 25,000 | ||||||||||||
Credit Facilities | |||||||||||||
DEBT | |||||||||||||
Term of debt | 5 years | ||||||||||||
Minimum liquidity required to be maintained | $ 30,000 | $ 30,000 | |||||||||||
Credit Facilities | Minimum | |||||||||||||
DEBT | |||||||||||||
Minimum EBITDAR required to be maintained | $ 62,100 | $ 62,100 | |||||||||||
Credit Facilities | Maximum | |||||||||||||
DEBT | |||||||||||||
Minimum EBITDAR required to be maintained | 87,700 | ||||||||||||
Credit Facilities | Subsequent Event | Minimum | |||||||||||||
DEBT | |||||||||||||
Minimum EBITDAR required to be maintained | $ 87,700 | $ 78,100 | |||||||||||
Credit Facilities | Base rate | Minimum | |||||||||||||
DEBT | |||||||||||||
Margin (as a percent) | 4.00% | ||||||||||||
Credit Facilities | Base rate | Maximum | |||||||||||||
DEBT | |||||||||||||
Margin (as a percent) | 5.00% | ||||||||||||
Revolving Credit Facility | |||||||||||||
DEBT | |||||||||||||
Maximum borrowing capacity | $ 25,000 | ||||||||||||
Commitment fee on unused facility (as a percent) | 0.50% | ||||||||||||
Balance amount of payment | $ 0 | $ 0 | |||||||||||
Delayed Draw Term Loan Facility | |||||||||||||
DEBT | |||||||||||||
Maximum borrowing capacity | $ 90,000 | ||||||||||||
Amount of draw | $ 80,500 | ||||||||||||
Number of aircrafts previously under operating leases | aircraft | 6 | ||||||||||||
Principal payment on debt | $ 1,006 | ||||||||||||
Balance amount of payment | $ 79,494 | $ 79,494 | $ 79,494 | ||||||||||
Debt instrument fixed interest rate | 6.00% | ||||||||||||
Delayed Draw Term Loan Facility | Subsequent Event | |||||||||||||
DEBT | |||||||||||||
Number of aircrafts previously under operating leases | aircraft | 5 | 5 | |||||||||||
Balance amount of payment | $ 68,000 |
DEBT - Long-term Debt (Detail_2
DEBT - Long-term Debt (Details) $ in Thousands | Mar. 24, 2021USD ($) | Oct. 26, 2020USD ($) | Dec. 31, 2020USD ($)aircraft | Dec. 31, 2019USD ($)aircraft | Dec. 31, 2020USD ($)aircraft | Jun. 30, 2021USD ($) |
DEBT | ||||||
Carrying Amount | $ 282,463 | $ 282,463 | $ 287,479 | |||
Appraised value of aircraft purchased | 292,450 | 292,450 | ||||
Notes payable under the Company's 2019-1 EETC agreement | ||||||
DEBT | ||||||
Face amount | $ 248,587 | $ 248,587 | $ 248,587 | 248,587 | ||
Number of used aircrafts purchased or refinanced | aircraft | 13 | 13 | ||||
Carrying Amount | $ 211,605 | |||||
Number of aircraft serve as security for loan | aircraft | 13 | |||||
Appraised value of aircraft purchased | $ 292,450 | |||||
U. S. Department of the Treasury CARES Act Loan | ||||||
DEBT | ||||||
Face amount | $ 45,000 | |||||
Repayment period prior to expiration date of loyalty program | 6 months | |||||
Repayment of debt | $ 46,260 | |||||
U. S. Department of the Treasury CARES Act Loan | Adjusted LIBOR Rate | ||||||
DEBT | ||||||
Margin (as a percent) | 6.50% |
DEBT - Long-term Debt schedul_2
DEBT - Long-term Debt schedule (Details) - USD ($) $ in Thousands | Jun. 30, 2021 | Dec. 31, 2020 | Oct. 26, 2020 | Dec. 31, 2019 |
DEBT | ||||
Total Debt | $ 291,592 | $ 285,801 | $ 89,905 | |
Less: Unamortized debt issuance costs | (4,113) | (3,338) | (2,988) | |
Less: Current Maturities of Long-term Debt | (19,795) | (26,118) | (13,197) | |
Total Long-term Debt | 267,684 | 256,345 | 73,720 | |
Notes payable under the Company's 2019-1 EETC agreement | ||||
DEBT | ||||
Total Debt | 211,605 | 227,347 | 28,280 | |
Face amount | $ 248,587 | $ 248,587 | $ 248,587 | |
Weighted average interest rate | 4.78% | 4.78% | ||
Notes payable under the Company's 2019-1 EETC agreement | Minimum | ||||
DEBT | ||||
Interest Rate | 4.13% | 4.13% | 4.13% | |
Notes payable under the Company's 2019-1 EETC agreement | Maximum | ||||
DEBT | ||||
Interest Rate | 6.95% | 6.95% | 6.95% | |
Delayed Draw Term Loan Facility | ||||
DEBT | ||||
Total Debt | $ 79,494 | |||
U. S. Department of the Treasury CARES Act Loan | ||||
DEBT | ||||
Total Debt | $ 45,419 | |||
Face amount | $ 45,000 | |||
Notes payable to Wilmington Trust Company | ||||
DEBT | ||||
Total Debt | $ 12,506 | |||
Interest Rate | 8.45% | 8.45% | ||
Other Notes payable | ||||
DEBT | ||||
Total Debt | $ 493 | $ 529 | ||
Interest Rate | 5.00% | 5.00% |
DEBT - Future maturities of t_2
DEBT - Future maturities of the outstanding Debt (Details) - USD ($) $ in Thousands | Jun. 30, 2021 | Dec. 31, 2020 | Dec. 31, 2019 |
Debt Principal Payments | |||
Remaining 2021 | $ 10,661 | ||
2022 | 30,367 | $ 26,928 | |
2023 | 42,358 | 28,846 | |
2024 | 44,000 | 43,819 | |
2025 | 49,087 | 67,659 | |
Thereafter | 115,119 | 53,739 | |
Total | 291,592 | 285,801 | $ 89,905 |
Amortization of Debt Issuance Costs | |||
Remaining 2021 | (509) | ||
2022 | (983) | (810) | |
2023 | (908) | (752) | |
2024 | (785) | (678) | |
2025 | (670) | (554) | |
Thereafter | (258) | (202) | |
Total | (4,113) | (3,338) | $ (2,988) |
Debt, net | |||
Remaining 2021 | 10,152 | ||
2022 | 29,384 | 26,118 | |
2023 | 41,450 | 28,094 | |
2024 | 43,215 | 43,141 | |
2025 | 48,417 | 67,105 | |
Thereafter | 114,861 | 53,537 | |
Net Debt | $ 287,479 | $ 282,463 |
DEBT - Measured at fair value_2
DEBT - Measured at fair value (Details) - USD ($) $ in Thousands | Jun. 30, 2021 | Dec. 31, 2020 | Dec. 31, 2019 |
DEBT | |||
Carrying Amount | $ 291,592 | $ 285,801 | $ 89,905 |
Fair Value | $ 281,640 | $ 279,119 | $ 96,342 |
FUEL DERIVATIVES AND RISK MAN_6
FUEL DERIVATIVES AND RISK MANAGEMENT (Details) - Fuel Derivative Contracts $ in Thousands, gal in Millions | 3 Months Ended | 6 Months Ended | 9 Months Ended | 12 Months Ended | |||
Jun. 30, 2021USD ($)gal | Jun. 30, 2020USD ($) | Jun. 30, 2021USD ($)gal | Jun. 30, 2020USD ($) | Dec. 31, 2018USD ($) | Dec. 31, 2020USD ($)gal | Dec. 31, 2019USD ($) | |
Changes in Derivative Assets (Liabilities) | |||||||
Balance - January 1 | $ (1,174) | $ 2,233 | $ 2,233 | $ (12,006) | |||
Non-cash Gains (Losses) | 3,599 | (16,056) | (12,206) | 10,791 | |||
Contract Settlements | (827) | 4,990 | 8,800 | 3,448 | |||
Balance - June 30 | $ 1,598 | $ (8,833) | 1,598 | (8,833) | $ (12,006) | (1,174) | 2,233 |
Fuel Derivative Gains (Losses) | |||||||
Non-cash Gains (Losses) | 1,213 | 5,695 | 3,599 | (16,056) | (12,006) | (12,206) | 10,791 |
Cash Premiums Paid | (1,617) | (1,901) | (2,280) | (2,053) | (665) | ||
Total Fuel Derivative Gains (Losses) | $ 1,213 | $ 4,078 | $ 3,599 | $ (17,957) | $ (14,286) | $ (14,259) | $ 10,126 |
Outstanding volume | gal | 5.8 | 5.8 | 21 |
FAIR VALUE MEASUREMENTS (Deta_2
FAIR VALUE MEASUREMENTS (Details) - Recurring - USD ($) $ in Thousands | Jun. 30, 2021 | Dec. 31, 2020 | Dec. 31, 2019 |
FAIR VALUE MEASUREMENTS | |||
Total Assets measured at fair value on a recurring basis | $ 1,598 | $ 2,233 | |
Total Liabilities measured at fair value on a recurring basis | $ 1,174 | ||
Fuel Derivative Contracts | |||
FAIR VALUE MEASUREMENTS | |||
Total Assets measured at fair value on a recurring basis | 1,598 | 2,233 | |
Total Liabilities measured at fair value on a recurring basis | 1,174 | ||
Level 2 | |||
FAIR VALUE MEASUREMENTS | |||
Total Assets measured at fair value on a recurring basis | 1,598 | 2,233 | |
Total Liabilities measured at fair value on a recurring basis | 1,174 | ||
Level 2 | Fuel Derivative Contracts | |||
FAIR VALUE MEASUREMENTS | |||
Total Assets measured at fair value on a recurring basis | $ 1,598 | $ 2,233 | |
Total Liabilities measured at fair value on a recurring basis | $ 1,174 |
INCOME TAXES (Details)
INCOME TAXES (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | 9 Months Ended | 12 Months Ended | ||||
Jun. 30, 2021 | Mar. 31, 2021 | Jun. 30, 2020 | Jun. 30, 2021 | Jun. 30, 2020 | Dec. 31, 2018 | Dec. 31, 2020 | Dec. 31, 2019 | |
Income Taxes | ||||||||
Effective tax rate | 15.50% | 23.90% | 18.80% | 31.10% | (77.90%) | 16.60% | 23.50% | |
Percentage of cash savings | 85.00% | |||||||
Percentage of cash savings retained | 15.00% | |||||||
Grants awarded | $ 32,208 | |||||||
Non-current liability recognized | $ 115,200 | $ 115,200 | ||||||
Decrease to the tax receivable agreement liability | (18,700) | (18,700) | ||||||
Income tax receivable agreement liability | 96,500 | $ 96,500 | ||||||
PSP3 | ||||||||
Income Taxes | ||||||||
Grants awarded | $ 34,547 |
SPECIAL ITEMS, NET - Schedule_2
SPECIAL ITEMS, NET - Schedule of special items, net (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | 9 Months Ended | 12 Months Ended | |||||
Jun. 30, 2021 | Mar. 31, 2021 | Jun. 30, 2020 | Apr. 10, 2018 | Jun. 30, 2021 | Jun. 30, 2020 | Dec. 31, 2018 | Dec. 31, 2020 | Dec. 31, 2019 | |
SPECIAL ITEMS, NET | |||||||||
CARES Act grant recognition | $ (39,378) | $ (31,516) | $ (71,587) | $ (31,516) | $ (62,312) | ||||
CARES Act employee retention credit | (446) | $ (334) | (780) | (2,328) | |||||
Aircraft lease buy-out expense | 1,299 | 6,963 | |||||||
Other | 5 | 35 | 12 | 35 | 77 | $ 714 | |||
Total Special Items, net | $ (38,520) | $ (31,481) | $ 271 | $ (65,392) | $ (31,481) | $ (6,706) | $ (64,563) | $ 7,092 |
SPECIAL ITEMS, NET (Details)
SPECIAL ITEMS, NET (Details) $ in Thousands | Apr. 22, 2021USD ($) | Apr. 30, 2021aircraft | Mar. 31, 2021aircraft | Jun. 30, 2021USD ($) | Mar. 31, 2021USD ($) | Jun. 30, 2020USD ($) | Jun. 30, 2021USD ($)aircraft | Jun. 30, 2020USD ($) | Dec. 31, 2020USD ($)aircraft |
Unusual or Infrequent Item, or Both [Line Items] | |||||||||
Number of aircrafts previously under operating leases | aircraft | 1 | 5 | 6 | 2 | |||||
Grants awarded | $ 32,208 | ||||||||
Grants recognized | $ 39,378 | $ 31,516 | $ 71,587 | $ 31,516 | $ 62,312 | ||||
PSP2 | |||||||||
Unusual or Infrequent Item, or Both [Line Items] | |||||||||
Grants recognized | $ 4,831 | 4,831 | $ 32,208 | $ 62,312 | |||||
PSP3 | |||||||||
Unusual or Infrequent Item, or Both [Line Items] | |||||||||
Grants awarded | $ 34,547 |
OPERATING SEGMENTS (Details)_2
OPERATING SEGMENTS (Details) $ in Thousands | 3 Months Ended | 6 Months Ended | 9 Months Ended | 12 Months Ended | ||||||||||||
Jun. 30, 2021USD ($) | Dec. 31, 2020USD ($) | Sep. 30, 2020USD ($) | Jun. 30, 2020USD ($) | Mar. 31, 2020USD ($) | Dec. 31, 2019USD ($) | Sep. 30, 2019USD ($) | Jun. 30, 2019USD ($) | Mar. 31, 2019USD ($) | Apr. 10, 2018USD ($) | Jun. 30, 2021USD ($)segmentitem | Jun. 30, 2020USD ($) | Dec. 31, 2018USD ($) | Dec. 31, 2020USD ($)segmentitem | Dec. 31, 2019USD ($)segment | Dec. 31, 2018segment | |
OPERATING SEGMENTS | ||||||||||||||||
Number of operating segments | segment | 2 | 2 | 2 | 2 | ||||||||||||
Number of internal passenger groups | item | 2 | 1 | ||||||||||||||
Operating Revenues | $ 149,189 | $ 107,807 | $ 77,973 | $ 35,376 | $ 180,330 | $ 163,864 | $ 171,478 | $ 169,373 | $ 196,669 | $ 197,452 | $ 276,802 | $ 215,706 | $ 384,931 | $ 401,486 | $ 701,384 | |
Non-Fuel Operating Expenses | 108,762 | 68,414 | 214,038 | 177,953 | 365,272 | |||||||||||
Aircraft Fuel | 29,709 | 677 | 45,790 | 53,984 | 56,238 | 119,553 | 83,392 | 165,666 | ||||||||
Special Items, net | (38,520) | (31,481) | 271 | (65,392) | (31,481) | (6,706) | (64,563) | 7,092 | ||||||||
Total Operating Expenses | 99,951 | 37,610 | 171,336 | 202,630 | 202,710 | 377,699 | 384,101 | 623,262 | ||||||||
Operating Income (Loss) | 49,238 | $ (4,428) | $ 8,817 | (2,234) | $ 15,230 | $ 11,604 | $ 10,475 | $ 9,541 | $ 46,502 | 26,116 | 74,172 | 12,996 | 7,232 | 17,385 | 78,122 | |
Interest Income | 9 | 63 | 96 | 24 | 314 | 258 | 377 | 937 | ||||||||
Interest Expense | (6,080) | (5,442) | (339) | (13,201) | (11,058) | (6,060) | (22,073) | (17,170) | ||||||||
Other, net | 18,054 | (325) | 37 | 18,049 | (494) | (1,636) | (371) | (1,729) | ||||||||
Income (Loss) before Income Tax | 61,221 | (7,938) | $ 25,910 | 79,044 | 1,758 | $ (206) | (4,682) | $ 60,160 | ||||||||
Passenger | ||||||||||||||||
OPERATING SEGMENTS | ||||||||||||||||
Operating Revenues | 127,091 | 32,157 | 233,118 | 212,487 | 364,677 | |||||||||||
Non-Fuel Operating Expenses | 92,361 | 63,507 | 179,566 | 173,046 | 332,742 | |||||||||||
Aircraft Fuel | 29,657 | 677 | 53,912 | 56,238 | 83,392 | |||||||||||
Special Items, net | (28,784) | (28,111) | (46,991) | (28,111) | (53,842) | |||||||||||
Total Operating Expenses | 93,234 | 36,073 | 186,487 | 201,173 | 362,292 | |||||||||||
Operating Income (Loss) | 33,857 | (3,916) | 46,631 | 11,314 | 2,385 | |||||||||||
Cargo | ||||||||||||||||
OPERATING SEGMENTS | ||||||||||||||||
Operating Revenues | 22,098 | 3,219 | 43,684 | 3,219 | 36,809 | |||||||||||
Non-Fuel Operating Expenses | 16,401 | 4,907 | 34,472 | 4,907 | 32,530 | |||||||||||
Aircraft Fuel | 52 | 72 | ||||||||||||||
Special Items, net | (9,736) | (3,370) | (18,401) | (3,370) | (10,721) | |||||||||||
Total Operating Expenses | 6,717 | 1,537 | 16,143 | 1,537 | 21,809 | |||||||||||
Operating Income (Loss) | $ 15,381 | $ 1,682 | $ 27,541 | $ 1,682 | $ 15,000 |