Document and Entity Information
Document and Entity Information | 3 Months Ended |
Mar. 31, 2021shares | |
Document and Entity Information [Abstract] | |
Document Type | 10-Q |
Document Quarterly Report | true |
Document Transition Report | false |
Document Period End Date | Mar. 31, 2021 |
Entity File Number | 001-40217 |
Entity Registrant Name | Sun Country Airlines Holdings, Inc. |
Entity Incorporation, State or Country Code | DE |
Entity Tax Identification Number | 82-4092570 |
Entity Address, Address Line One | 2005 Cargo Road |
Entity Address, City or Town | Minneapolis |
Entity Address State Or Province | MN |
Entity Address, Postal Zip Code | 55450 |
City Area Code | 651 |
Local Phone Number | 681-3900 |
Title of 12(b) Security | Common Stock, par value $0.01 per share |
Trading Symbol | SNCY |
Security Exchange Name | NASDAQ |
Entity Current Reporting Status | No |
Entity Interactive Data Current | Yes |
Entity Filer Category | Non-accelerated Filer |
Entity Small Business | false |
Entity Emerging Growth Company | true |
Entity Ex Transition Period | false |
Entity Shell Company | false |
Entity Common Stock, Shares Outstanding | 57,153,467 |
Entity Central Index Key | 0001743907 |
Current Fiscal Year End Date | --12-31 |
Document Fiscal Year Focus | 2021 |
Document Fiscal Period Focus | Q1 |
Amendment Flag | false |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Mar. 31, 2021 | Dec. 31, 2020 |
Current Assets: | ||
Cash and Equivalents | $ 269,599 | $ 62,028 |
Restricted Cash | 6,019 | 8,335 |
Investments | 5,777 | 5,624 |
Accounts Receivable, net of an allowance for credit losses of $293 and $224, respectively | 25,897 | 28,690 |
Short-term Lessor Maintenance Deposits | 1,723 | 3,101 |
Inventory, net of a reserve for obsolescence of $1,089 and $996, respectively | 5,457 | 5,407 |
Prepaid Expenses | 11,678 | 8,002 |
Derivative Assets | 1,205 | |
Other Current Assets | 804 | 5,553 |
Total Current Assets | 328,159 | 126,740 |
Property & Equipment, net: | ||
Property & Equipment | 533,396 | 479,580 |
Accumulated Depreciation & Amortization | (76,467) | (65,065) |
Total Property & Equipment, net | 456,929 | 414,515 |
Other Assets: | ||
Goodwill | 222,223 | 222,223 |
Other Intangible Assets, net | 92,110 | 93,110 |
Operating Lease Right-of-use Assets | 80,587 | 121,269 |
Aircraft Lease Deposits | 8,027 | 10,253 |
Long-term Lessor Maintenance Deposits | 18,855 | 22,584 |
Deferred Tax Asset | 30,810 | 36,216 |
Other Assets | 6,502 | 6,357 |
Total Other Assets | 459,114 | 512,012 |
Total Assets | 1,244,202 | 1,053,267 |
Current Liabilities: | ||
Accounts Payable | 34,171 | 34,035 |
Accrued Salaries, Wages, and Benefits | 16,870 | 16,368 |
Accrued Transportation Taxes | 10,402 | 5,883 |
Air Traffic Liabilities | 94,733 | 101,075 |
Derivative Liabilities | 1,174 | |
Over-market Liabilities | 5,487 | 9,281 |
Finance Lease Obligations | 9,995 | 11,460 |
Loyalty Program Liabilities | 7,115 | 7,016 |
Operating Lease Obligations | 20,672 | 34,492 |
Current Maturities of Long-term Debt | 29,232 | 26,118 |
Other Current Liabilities | 8,963 | 6,841 |
Total Current Liabilities | 237,640 | 253,743 |
Long-term Liabilities: | ||
Over-market Liabilities | 16,113 | 28,128 |
Finance Lease Obligations | 93,293 | 95,710 |
Loyalty Program Liabilities | 13,659 | 15,053 |
Operating Lease Obligations | 77,840 | 112,707 |
Long-term Debt | 274,109 | 256,345 |
Income Tax Receivable Agreement | 115,200 | |
Other Long-term Liabilities | 6,388 | 7,764 |
Total Long-term Liabilities | 596,602 | 515,707 |
Total Liabilities | 834,242 | 769,450 |
Commitments and Contingencies | ||
Stockholders' Equity: | ||
Common stock with $0.01 par value, 995,000,000 shares authorized, 57,153,467 and 46,839,659 issued at March 31, 2021 and December 31, 2020, respectively. | 572 | 468 |
Loans to Stockholders | (3,500) | |
Additional Paid in Capital | 473,848 | 248,525 |
Retained Earnings / (Deficit) | (64,460) | 38,324 |
Total Stockholders' Equity | 409,960 | 283,817 |
Total Liabilities and Stockholders' Equity | 1,244,202 | 1,053,267 |
Aircraft and Flight Equipment | ||
Property & Equipment, net: | ||
Property & Equipment | 384,950 | 331,685 |
Leasehold Improvements and Ground Equipment | ||
Property & Equipment, net: | ||
Property & Equipment | 13,856 | 13,526 |
Computer Hardware and Software | ||
Property & Equipment, net: | ||
Property & Equipment | 7,949 | 7,845 |
Finance Lease Assets | ||
Property & Equipment, net: | ||
Property & Equipment | 117,833 | 117,833 |
Rotable Parts | ||
Property & Equipment, net: | ||
Property & Equipment | $ 8,808 | $ 8,691 |
CONDENSED CONSOLIDATED BALANC_2
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands | Mar. 31, 2021 | Dec. 31, 2020 |
CONDENSED CONSOLIDATED BALANCE SHEETS | ||
Accounts Receivable, allowance for credit losses | $ 293 | $ 224 |
Inventory, reserve for obsolescence | $ 1,089 | $ 996 |
Common stock-par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock-shares authorized | 995,000,000 | |
Common stock-shares issued | 57,153,467 | 46,839,659 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Operating Revenues: | ||
Operating Revenues | $ 127,611 | $ 180,330 |
Operating Expenses: | ||
Aircraft Fuel | 24,274 | 55,561 |
Salaries, Wages, and Benefits | 44,075 | 38,091 |
Aircraft Rent | 5,599 | 11,032 |
Maintenance | 9,210 | 6,478 |
Sales and Marketing | 5,110 | 8,572 |
Depreciation and Amortization | 12,615 | 10,527 |
Ground Handling | 5,230 | 9,292 |
Landing Fees and Airport Rent | 8,785 | 11,114 |
Special Items, net | (26,871) | |
Other Operating, net | 14,651 | 14,433 |
Total Operating Expenses | 102,678 | 165,100 |
Operating Income | 24,933 | 15,230 |
Non-operating Income (Expense): | ||
Interest Income | 15 | 251 |
Interest Expense | (7,121) | (5,616) |
Other, net | (5) | (169) |
Total Non-operating Expense, net | (7,111) | (5,534) |
Income before Income Tax | 17,822 | 9,696 |
Income Tax Expense | 5,406 | 2,445 |
Net Income | $ 12,416 | $ 7,251 |
Net Income per share to common stockholders: | ||
Basic earnings per share | $ 0.26 | $ 0.16 |
Diluted earnings per share | $ 0.24 | $ 0.15 |
Shares used for computation: | ||
Weighted Average Common Shares Outstanding - Basic | 48,496,077 | 46,805,951 |
Weighted Average Common Shares Outstanding - Diluted | 52,508,186 | 48,225,603 |
Passenger | ||
Operating Revenues: | ||
Operating Revenues | $ 104,195 | $ 178,486 |
Cargo | ||
Operating Revenues: | ||
Operating Revenues | 21,585 | |
Other | ||
Operating Revenues: | ||
Operating Revenues | $ 1,831 | $ 1,844 |
CONDENSED CONSOLIDATED STATEM_2
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY - USD ($) $ in Thousands | Warrants | Common Stock | Loans to Stockholders | APIC | Retained Earnings | Total |
Balances, at Beginning of period at Dec. 31, 2019 | $ 68 | $ (3,500) | $ 244,928 | $ 42,228 | $ 283,724 | |
Balances, at Beginning of period (in shares) at Dec. 31, 2019 | 40,005,885 | 6,800,065 | ||||
Stockholder's Equity | ||||||
Exercise of Apollo Warrants | $ 400 | (379) | 21 | |||
Exercise of Apollo Warrants (in shares) | (40,005,885) | 40,005,885 | ||||
Net Income | 7,251 | 7,251 | ||||
Stock-based Compensation | 369 | 369 | ||||
Balances, at End of period at Mar. 31, 2020 | $ 468 | (3,500) | 244,918 | 49,479 | 291,365 | |
Balances, at End of period (in shares) at Mar. 31, 2020 | 46,805,950 | |||||
Balances, at Beginning of period at Dec. 31, 2020 | $ 468 | (3,500) | 248,525 | 38,324 | 283,817 | |
Balances, at Beginning of period (in shares) at Dec. 31, 2020 | 46,839,659 | |||||
Stockholder's Equity | ||||||
Shares Surrendered by Stockholders | $ (1) | $ 3,500 | (3,499) | |||
Shares Surrendered by Stockholders (in shares) | (140,737) | |||||
Initial Public Offering | $ 105 | 224,552 | 224,657 | |||
Initial Public Offering (in shares) | 10,454,545 | |||||
Net Income | 12,416 | 12,416 | ||||
Income Tax Receivable Agreement | (115,200) | (115,200) | ||||
Amazon Warrants | 1,400 | 1,400 | ||||
Stock-based Compensation | 2,870 | 2,870 | ||||
Balances, at End of period at Mar. 31, 2021 | $ 572 | $ 473,848 | $ (64,460) | $ 409,960 | ||
Balances, at End of period (in shares) at Mar. 31, 2021 | 57,153,467 |
CONDENSED CONSOLIDATED STATEM_3
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS | ||
Net Income | $ 12,416 | $ 7,251 |
Adjustments to reconcile Net Income to Cash from Operating Activities: | ||
Depreciation and Amortization | 12,615 | 10,527 |
Reduction in Operating Lease Right-of-use Assets | 5,401 | 6,951 |
Non-Cash Loss on Asset Transactions, net | (8,729) | 72 |
Unrealized Loss (Gain) on Fuel Derivatives | (2,386) | 21,752 |
Amortization of Over-market Liabilities | (2,004) | (2,913) |
Deferred Income Taxes | 5,406 | 2,471 |
Amazon Warrants Vested | 1,400 | |
Stock-based Compensation Expense | 2,870 | 369 |
Amortization of Debt Issuance Costs | 1,496 | 708 |
Changes in Operating Assets and Liabilities: | ||
Accounts Receivable | 2,358 | 5,322 |
Inventory | (173) | (367) |
Prepaid Expenses | (3,676) | (403) |
Lessor Maintenance Deposits | (2,219) | (5,476) |
Aircraft Lease Deposits | 2,226 | 600 |
Other Assets | 233 | (2,313) |
Accounts Payable | 626 | 7,107 |
Accrued Transportation Taxes | 4,519 | (10,539) |
Air Traffic Liabilities | (6,343) | (21,903) |
Loyalty Program Liabilities | (1,295) | (570) |
Reduction in Operating Lease Obligations | (10,722) | (7,803) |
Other Liabilities | 1,820 | 3,015 |
Net Cash Provided by Operating Activities | 15,839 | 13,858 |
Cash Flows from Investing Activities: | ||
Purchases of Property & Equipment | (54,399) | (75,250) |
Purchase of Investments | (337) | |
Proceeds from the Sale of Investments | 184 | 202 |
Net Cash Used in Investing Activities | (54,552) | (75,048) |
Cash Flows from Financing Activities: | ||
Cash Received from Stock Offering | 235,894 | |
Costs of Stock Offering | (7,226) | |
Proceeds Received from Exercise of Apollo Warrants | 21 | |
Proceeds from Borrowings | 68,000 | 108,777 |
Repayment of Finance Lease Obligations | (3,911) | (4,256) |
Repayment of Borrowings | (46,068) | (47,255) |
Debt Issuance Costs | (2,721) | (2,432) |
Net Cash Provided by Financing Activities | 243,968 | 54,855 |
Net Increase / (Decrease) in Cash, Cash Equivalents and Restricted Cash | 205,255 | (6,335) |
Cash, Cash Equivalents and Restricted Cash--Beginning of the Period | 70,363 | 64,478 |
Cash, Cash Equivalents and Restricted Cash--End of the Period | 275,618 | 58,143 |
Supplemental information: | ||
Cash Payments for Interest | 2,728 | 3,278 |
Cash Payments (Receipts) for Income Taxes, net | (7) | (55) |
Lease Deposits Applied Against the Purchase of Aircraft | 2,766 | |
Purchases of Property & Equipment in Accounts Payable | 243 | $ 1,186 |
Costs of Stock Offering in Accounts Payable | $ 1,829 |
CONDENSED CONSOLIDATED STATEM_4
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Parentheticals) - USD ($) $ in Thousands | Mar. 31, 2021 | Mar. 31, 2020 |
Reconciliation of Cash, Cash Equivalents and Restricted Cash | ||
Cash and Equivalents | $ 269,599 | $ 53,112 |
Restricted Cash | 6,019 | 5,031 |
Total Cash, Cash Equivalents and Restricted Cash | $ 275,618 | $ 58,143 |
COMPANY BACKGROUND
COMPANY BACKGROUND | 3 Months Ended |
Mar. 31, 2021 | |
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, cargo customers, charter air transportation and related services. Services are provided to the general public, Amazon, 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. Initial Public Offering of Common Stock and Concurrent Private Placements 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 $224,657 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 was based on an aggregate purchase price of $50,000 and a price per share equal to 94% of the initial public offering price of $24.00 per share. 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 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 months ended March 31, 2021, 189,652 warrants vested and the cumulative warrants vested as of March 31, 2021 were 1,074,704. No warrants vested during the three months ended March 31, 2020. |
BASIS OF PRESENTATION
BASIS OF PRESENTATION | 3 Months Ended |
Mar. 31, 2021 | |
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 three months ended March 31, 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 and March 31, 2020. The reclass as of December 31, 2019 was $239,073. Also, historical shares of common stock have been adjusted to reflect the March 2021 approximately 18.8886 for 1 stock split. 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, 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 months ended March 31, 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. 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 Simplifying the Test for Goodwill Impairment Simplifying the Test for Goodwill Impairment Financial Instruments—Credit Losses Financial Instruments—Credit Losses : Measurement of Credit Losses on Financial Instruments |
IMPACT OF THE COVID19 PANDEMIC
IMPACT OF THE COVID19 PANDEMIC | 3 Months Ended |
Mar. 31, 2021 | |
IMPACT OF THE COVID19 PANDEMIC | |
IMPACT OF THE COVID19 PANDEMIC | 3. IMPACT OF THE COVID-19 PANDEMIC 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. State and local governments may have additional restrictions that adversely impact travel. 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 dramatic 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. The continued distribution of effective vaccines and the easing of travel advisories and restrictions has lead to growing customer confidence and increased demand. There have been fluctuations in the rate of infections during 2021 and the U.S. Food and Drug Administration has issued an emergency use authorization for COVID-19 vaccines. The timing and pace of the recovery from the COVID-19 pandemic 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. 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 have restricted non-essential travel for their employees. 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. As the COVID-19 pandemic continues to evolve, the Company’s financial and operational outlook remains subject to change. 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. The grant amount 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 and an additional $334 was recognized in the first quarter of 2021. 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. Further, the Company was notified on April 15, 2021 that it will receive a grant of approximately $34,547 under the American Rescue Plan Act of 2021 (“PSP3”) enacted on March 11, 2021, in which the Treasury is authorized to provide additional assistance to passenger air carriers and contractors that received financial assistance under the CARES Act. Of this grant amount, $17,274 was received on April 29, 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 the later of March 31, which was extended to September 30, 2022 under PSP3; and restrictions on the payment of certain executive compensation until the October 1, 2022, which was extended to April 1, 2023 under PSP3. |
REVENUE
REVENUE | 3 Months Ended |
Mar. 31, 2021 | |
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 March 31, 2021 2020 Scheduled service $ 54,620 $ 114,228 Charter service 25,805 29,227 Ancillary 23,770 35,031 Passenger 104,195 178,486 Cargo 21,585 — Other 1,831 1,844 Total Operating Revenue $ 127,611 $ 180,330 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 March 31, 2021 2020 Domestic $ 119,312 $ 163,038 Latin America 7,877 17,076 Other 422 216 Total Operating Revenue $ 127,611 $ 180,330 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 months ended March 31, 2021 was $138 and is included in Maintenance expense. There was nothing expensed in the three months ended March 31, 2020, since the Amazon cargo services had not started yet. 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) Amazon Deferred Up-front Payment received (reported within Other Liabilities on the Condensed Consolidated Balance Sheets). Contract Assets and Liabilities are as follows: March 31, 2021 December 31, 2020 Contract Assets Costs to fulfill contract with Amazon $ 3,312 $ 3,614 Air Traffic Liabilities $ 94,733 $ 101,075 Loyalty Program Liabilities 20,774 22,068 Amazon Deferred Up-front Payment 5,010 5,240 Total Contract Liabilities $ 120,517 $ 128,383 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 period ended March 31, 2021, $60,039 of revenue was recognized in Passenger revenue that was included in the Air Traffic Liabilities as of December 31, 2020. 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 is being amortized into revenue on a pro-rata basis over the initial six years of the ATSA. For the three months ended March 31, 2021, $231 was amortized into Cargo revenue. Nothing was amortized for the three months ended March 31, 2020 as services did not begin until the second quarter of 2020. 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 857 1,635 Loyalty Points Redeemed (1) (2,152) (2,206) Balance - March 31 $ 20,774 $ 22,321 (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 is comprised of points that were part of the loyalty program deferred revenue 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. |
EARNINGS PER SHARE
EARNINGS PER SHARE | 3 Months Ended |
Mar. 31, 2021 | |
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. The following table shows the computation of basic and diluted earnings per share: Three Months Ended March 31, 2021 2020 Numerator: Net Income $ 12,416 $ 7,251 Denominator: Weighted Average Common Shares Outstanding - Basic 48,496,077 46,805,951 Dilutive effect of Stock Options and Warrants (1) 4,012,109 1,419,652 Weighted Average Common Shares Outstanding - Diluted 52,508,186 48,225,603 Basic earnings per share $ 0.26 $ 0.16 Diluted earnings per share $ 0.24 $ 0.15 (1) There were 3,557,432 and 3,646,690 performance-based stock options outstanding at March 31, 2021 and 2020, respectively. As a result of the Company’s initial public offering, 75 percent of these options are expected to meet the performance conditions and are included in dilutive options at March 31, 2021. At March 31, 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. |
AIRCRAFT - Owned and Leased
AIRCRAFT - Owned and Leased | 3 Months Ended |
Mar. 31, 2021 | |
AIRCRAFT - Owned and Leased | |
AIRCRAFT - Owned and Leased | 6. AIRCRAFT – Owned and Leased Aircraft Fleet The following tables summarize the Company’s aircraft fleet activity for the three months ended March 31, 2021 and 2020, respectively: December 31, 2020 Additions Removals March 31, 2021 Passenger: Owned 14 5 — 19 Finance leases 5 — — 5 Operating leases 12 — (5) 7 Sun Country Airlines' Fleet 31 5 (5) 31 Cargo: Aircraft Operated for Amazon 12 — — 12 Total Aircraft Operated 43 5 (5) 43 The five aircraft purchased during the three months ended March 31, 2021 were financed through the Delayed Draw Term Loan Facility (see Note 7). All five of these were previously under operating leases. December 31, 2019 Additions Removals March 31, 2020 Passenger: Owned 5 3 — 8 Finance leases 10 — — 10 Operating leases 14 — (1) 13 Seasonal leases 2 — (1) 1 Sun Country Airlines' Fleet 31 3 (2) 32 The three aircraft purchased during the three months ended March 31, 2020 were financed through equipment trust certificates (see Note 7). One of these aircraft was previously under an operating lease 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). The Accumulated Depreciation on owned assets was $57,950 and $52,048 as of March 31, 2021 and December 31, 2020, respectively. Depreciation expense was $8,800 and $5,121 for the three months ended March 31, 2021 and 2020, respectively. The Accumulated Amortization on Finance Lease Assets was $18,517 and $13,018 as of March 31, 2021 and December 31, 2020, respectively. Amortization Expense was $2,692 and $4,290 for the three months ended March 31, 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. The amount deferred as of March 31, 2021 was $975, consisting of $533 under finance leases and $442 under operating leases. 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 Condensed Consolidated Balance Sheets. 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 March 31, 2021 and December 31, 2020, the remaining balance of the contra-asset was $26,512 and $36,729, respectively. Of the $10,217 reduction in the contra-asset during the three months ended March 31, 2021, $9,880 related to the purchase of five 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 March 31, 2021 and 2020, the Company recognized none and $425, respectively, of the contra-asset as a reduction to Maintenance expense on the accompanying Condensed Consolidated Statements of Operations. 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. The remaining balance of this contra-asset as of March 31, 2021 and December 31, 2020 was $12,891 and $16,501, respectively and is recorded within Operating Lease Right-of-Use Assets. The purchase of five aircraft in March 2021 contributed $2,858 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 March 31, 2021 and December 31, 2020 was $21,600 and $37,409, respectively. Of the $15,809 reduction in the over-market maintenance reserve liabilities during the three months ended March 31, 2021, $13,805 related to the purchase of five aircrafts previously leased, whereupon 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 March 31, 2021 and 2020, includes credits of $2,755 and $4,103, respectively, for the amortization of over-market liabilities established at the Acquisition Date related to lease rates and maintenance reserves. |
DEBT
DEBT | 3 Months Ended |
Mar. 31, 2021 | |
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. The Company was in compliance with all covenants in its debt agreements at March 31, 2021. Long-term Debt included the following: March 31, 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 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 $ 227,347 Delayed Draw Term Loan Facility 68,000 — (see terms and conditions above) U. S. Department of the Treasury CARES Act Loan — 45,419 (see terms and conditions above) Notes payable to Wilmington Trust Company. Notes bear interest at an annual rate of 8.45% and mature Nov. 2023 to Feb. 2024. 11,880 12,506 Other Notes payable. These notes bear interest at an annual rate of approximately 5.0% and mature March 2029. 505 529 Total Debt 307,732 285,801 Less: Unamortized debt issuance costs (4,391) (3,338) Less: Current Maturities of Long-term Debt (29,232) (26,118) Total Long-term Debt $ 274,109 $ 256,345 Future maturities of the outstanding Debt are as follows: Debt Principal Amortization of Debt March 31, 2021 Payments Issuance Costs Net Debt Remainder of 2021 $ 28,799 $ (775) $ 28,024 2022 32,059 (983) 31,076 2023 44,900 (908) 43,992 2024 43,962 (785) 43,177 2025 45,062 (670) 44,392 Thereafter 112,950 (270) 112,680 Total $ 307,732 $ (4,391) $ 303,341 The table below presents the Company’s debt measured at fair value: March 31, 2021 December 31, 2020 Carrying Amount $ 307,732 $ 285,801 Fair Value $ 301,513 $ 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. |
FUEL DERIVATIVES AND RISK MANAG
FUEL DERIVATIVES AND RISK MANAGEMENT | 3 Months Ended |
Mar. 31, 2021 | |
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 March 31, 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: Three Months Ended March 31, 2021 2020 Balance - January 1 $ (1,173) $ 2,233 Non-cash Gains (Losses) 2,386 (21,752) Contract Settlements (8) 65 Balance - March 31 $ 1,205 $ (19,454) Fuel Derivative Gains (Losses) consisted of the following: Three Months Ended March 31, 2021 2020 Non-cash Gains (Losses) $ 2,386 $ (21,752) Cash Premiums Paid — (284) Total Fuel Derivative Gains (Losses) $ 2,386 $ (22,036) The gain in the quarter ended March 31, 2021 was primarily due to an increase in oil prices. The loss in the quarter ended March 31, 2020 was primarily due to the significant decline in oil prices. 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. Fuel derivative gains and losses are classified in Aircraft Fuel on the Condensed Consolidated Statements of Operations. As of March 31, 2021, the Company had outstanding fuel derivative contracts covering 12.7 million gallons of crude oil and jet fuel that will settle between April 2021 and September 2021. |
FAIR VALUE MEASUREMENTS
FAIR VALUE MEASUREMENTS | 3 Months Ended |
Mar. 31, 2021 | |
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: March 31, 2021 Level 1 Level 2 Level 3 Total Assets Fuel Derivative Contracts $ — $ 1,205 $ — $ 1,205 Total Assets measured at fair value on a recurring basis $ — $ 1,205 $ — $ 1,205 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 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. |
INCOME TAXES
INCOME TAXES | 3 Months Ended |
Mar. 31, 2021 | |
INCOME TAXES | |
INCOME TAXES | 10. INCOME TAXES The Company’s effective tax rate for the three months ended March 31, 2021 and 2020 was 30.3% and 25.2%, respectively. The effective tax rate represents a blend of federal and state taxes and includes the impact of certain nondeductible items. The increase is primarily related to an unfavorable permanent difference and discrete items related to executive compensation disallowed under Internal Revenue Code Section 162(m), partially offset by the reduction in meals and entertainment disallowed expenses during the current year. 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 Loan Program, the Company does not expect to make payments under the Tax Receivable Agreement until 2023. 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 April 2021, the Company was notified that it is to receive a PSP3 grant of approximately $34,547 under the American Rescue Plan Act of 2021, which will result in a decrease to the Tax Receivable Agreement liability in Q2 2021. This TRA liability decrease is due to an extension in the time period in which distributions made to shareholders are restricted. 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 represents undiscounted aggregate payments that we expect to pay the TRA holders under the Tax Receivable Agreement and is presented in “Long-term Liabilities” on the Condensed Consolidated Balance Sheet as of March 31, 2021, with an offset to Stockholders’ Equity. Subsequent changes in the measurement of the liability will be adjusted through the Consolidated Statements of Operations. |
SPECIAL ITEMS, NET
SPECIAL ITEMS, NET | 3 Months Ended |
Mar. 31, 2021 | |
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 March 31, 2021 2020 CARES Act grant recognition (1) $ (32,208) $ — CARES Act employee retention credit (2) (334) — Aircraft lease buy-out expense (3) 5,664 — Other 7 — Total Special Items, net $ (26,871) $ — (1) In the quarter ended March 31, 2021, the Treasury awarded the Company a grant under PSP2. (2) Relates to a credit recognized under the CARES Act Employee Retention credit which is a refundable tax credit against certain employment taxes. (3) Five aircraft were purchased in March 2021 that were previously under operating leases. Aircraft lease buy-out expense represents the net costs incurred to terminate the leases on those five 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). |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 3 Months Ended |
Mar. 31, 2021 | |
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. |
OPERATING SEGMENTS
OPERATING SEGMENTS | 3 Months Ended |
Mar. 31, 2021 | |
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. 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 presented net on the 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 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 have not been presented herein. Three Months Ended March 31, 2021 (1) Passenger Cargo Consolidated Operating Revenues $ 106,026 $ 21,585 $ 127,611 Non-Fuel Operating Expenses 87,205 18,070 105,275 Aircraft Fuel 24,253 21 24,274 Special Items, net (18,206) (8,665) (26,871) Total Operating Expenses 93,252 9,426 102,678 Operating Income $ 12,774 $ 12,159 24,933 Interest Income 15 Interest Expense (7,121) Other, net (5) Income before Income Tax $ 17,822 (1) As air cargo operations commenced in May 2020, there is no comparable prior period information. |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 3 Months Ended |
Mar. 31, 2021 | |
SUBSEQUENT EVENTS | |
SUBSEQUENT EVENTS | 14. SUBSEQUENT EVENTS The Company evaluated subsequent events for the period from the Balance Sheet date through May 6, 2021, the date that the Condensed Consolidated Financial Statements were available to be issued. On April 22, 2021, we received $4,831 from the Treasury as a top-off grant under PSP2. Further, the Company was notified on April 15, 2021 that it will receive a grant of approximately $34,547 under PSP3, of which $17,274 was received on April 29, 2021 (see Note 3). ****** |
BASIS OF PRESENTATION (Policies
BASIS OF PRESENTATION (Policies) | 3 Months Ended |
Mar. 31, 2021 | |
BASIS OF PRESENTATION | |
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 Simplifying the Test for Goodwill Impairment Simplifying the Test for Goodwill Impairment Financial Instruments—Credit Losses Financial Instruments—Credit Losses : Measurement of Credit Losses on Financial Instruments |
REVENUE (Tables)
REVENUE (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
REVENUE | |
Schedule of significant categories comprising operating revenues | Three Months Ended March 31, 2021 2020 Scheduled service $ 54,620 $ 114,228 Charter service 25,805 29,227 Ancillary 23,770 35,031 Passenger 104,195 178,486 Cargo 21,585 — Other 1,831 1,844 Total Operating Revenue $ 127,611 $ 180,330 |
Schedule of operating revenue by geographic region | Three Months Ended March 31, 2021 2020 Domestic $ 119,312 $ 163,038 Latin America 7,877 17,076 Other 422 216 Total Operating Revenue $ 127,611 $ 180,330 |
Summary of contract assets and liabilities | March 31, 2021 December 31, 2020 Contract Assets Costs to fulfill contract with Amazon $ 3,312 $ 3,614 Air Traffic Liabilities $ 94,733 $ 101,075 Loyalty Program Liabilities 20,774 22,068 Amazon Deferred Up-front Payment 5,010 5,240 Total Contract Liabilities $ 120,517 $ 128,383 |
Schedule of change in contract with customer, liability | 2021 2020 Balance - January 1 $ 22,069 $ 22,892 Loyalty Points Earned 857 1,635 Loyalty Points Redeemed (1) (2,152) (2,206) Balance - March 31 $ 20,774 $ 22,321 (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 is comprised of points that were part of the loyalty program deferred revenue balance at the beginning of the period, as well as points that were earned during the period. |
EARNINGS PER SHARE (Tables)
EARNINGS PER SHARE (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
EARNINGS PER SHARE | |
Summary of computation of basic and diluted earnings per share | Three Months Ended March 31, 2021 2020 Numerator: Net Income $ 12,416 $ 7,251 Denominator: Weighted Average Common Shares Outstanding - Basic 48,496,077 46,805,951 Dilutive effect of Stock Options and Warrants (1) 4,012,109 1,419,652 Weighted Average Common Shares Outstanding - Diluted 52,508,186 48,225,603 Basic earnings per share $ 0.26 $ 0.16 Diluted earnings per share $ 0.24 $ 0.15 (1) There were 3,557,432 and 3,646,690 performance-based stock options outstanding at March 31, 2021 and 2020, respectively. As a result of the Company’s initial public offering, 75 percent of these options are expected to meet the performance conditions and are included in dilutive options at March 31, 2021. At March 31, 2020, these options were excluded from the calculation of diluted EPS since the performance conditions were not considered likely to be met. |
AIRCRAFT - Owned and Leased (Ta
AIRCRAFT - Owned and Leased (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
AIRCRAFT - Owned and Leased | |
Summary of aircraft fleet activity | December 31, 2020 Additions Removals March 31, 2021 Passenger: Owned 14 5 — 19 Finance leases 5 — — 5 Operating leases 12 — (5) 7 Sun Country Airlines' Fleet 31 5 (5) 31 Cargo: Aircraft Operated for Amazon 12 — — 12 Total Aircraft Operated 43 5 (5) 43 December 31, 2019 Additions Removals March 31, 2020 Passenger: Owned 5 3 — 8 Finance leases 10 — — 10 Operating leases 14 — (1) 13 Seasonal leases 2 — (1) 1 Sun Country Airlines' Fleet 31 3 (2) 32 |
DEBT (Tables)
DEBT (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
DEBT | |
Summary of long term debt | March 31, 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 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 $ 227,347 Delayed Draw Term Loan Facility 68,000 — (see terms and conditions above) U. S. Department of the Treasury CARES Act Loan — 45,419 (see terms and conditions above) Notes payable to Wilmington Trust Company. Notes bear interest at an annual rate of 8.45% and mature Nov. 2023 to Feb. 2024. 11,880 12,506 Other Notes payable. These notes bear interest at an annual rate of approximately 5.0% and mature March 2029. 505 529 Total Debt 307,732 285,801 Less: Unamortized debt issuance costs (4,391) (3,338) Less: Current Maturities of Long-term Debt (29,232) (26,118) Total Long-term Debt $ 274,109 $ 256,345 |
Schedule of future maturities of the outstanding debt | Debt Principal Amortization of Debt March 31, 2021 Payments Issuance Costs Net Debt Remainder of 2021 $ 28,799 $ (775) $ 28,024 2022 32,059 (983) 31,076 2023 44,900 (908) 43,992 2024 43,962 (785) 43,177 2025 45,062 (670) 44,392 Thereafter 112,950 (270) 112,680 Total $ 307,732 $ (4,391) $ 303,341 |
Schedule of debt measured at fair value | March 31, 2021 December 31, 2020 Carrying Amount $ 307,732 $ 285,801 Fair Value $ 301,513 $ 279,119 |
FUEL DERIVATIVES AND RISK MAN_2
FUEL DERIVATIVES AND RISK MANAGEMENT (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
FUEL DERIVATIVES AND RISK MANAGEMENT | |
Schedule of changes in derivative assets (liabilities) | Three Months Ended March 31, 2021 2020 Balance - January 1 $ (1,173) $ 2,233 Non-cash Gains (Losses) 2,386 (21,752) Contract Settlements (8) 65 Balance - March 31 $ 1,205 $ (19,454) |
Schedule of fuel derivative gains (losses) | Three Months Ended March 31, 2021 2020 Non-cash Gains (Losses) $ 2,386 $ (21,752) Cash Premiums Paid — (284) Total Fuel Derivative Gains (Losses) $ 2,386 $ (22,036) |
FAIR VALUE MEASUREMENTS (Tables
FAIR VALUE MEASUREMENTS (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
FAIR VALUE MEASUREMENTS | |
Summary of assets and liabilities measured at fair value on a recurring basis | March 31, 2021 Level 1 Level 2 Level 3 Total Assets Fuel Derivative Contracts $ — $ 1,205 $ — $ 1,205 Total Assets measured at fair value on a recurring basis $ — $ 1,205 $ — $ 1,205 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 |
SPECIAL ITEMS, NET (Tables)
SPECIAL ITEMS, NET (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
SPECIAL ITEMS, NET | |
Schedule of special items, net | Three Months Ended March 31, 2021 2020 CARES Act grant recognition (1) $ (32,208) $ — CARES Act employee retention credit (2) (334) — Aircraft lease buy-out expense (3) 5,664 — Other 7 — Total Special Items, net $ (26,871) $ — (1) In the quarter ended March 31, 2021, the Treasury awarded the Company a grant under PSP2. (2) Relates to a credit recognized under the CARES Act Employee Retention credit which is a refundable tax credit against certain employment taxes. (3) Five aircraft were purchased in March 2021 that were previously under operating leases. Aircraft lease buy-out expense represents the net costs incurred to terminate the leases on those five 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). |
OPERATING SEGMENTS (Tables)
OPERATING SEGMENTS (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
OPERATING SEGMENTS | |
Summary of financial information for the operating segments | Three Months Ended March 31, 2021 (1) Passenger Cargo Consolidated Operating Revenues $ 106,026 $ 21,585 $ 127,611 Non-Fuel Operating Expenses 87,205 18,070 105,275 Aircraft Fuel 24,253 21 24,274 Special Items, net (18,206) (8,665) (26,871) Total Operating Expenses 93,252 9,426 102,678 Operating Income $ 12,774 $ 12,159 24,933 Interest Income 15 Interest Expense (7,121) Other, net (5) Income before Income Tax $ 17,822 (1) As air cargo operations commenced in May 2020, there is no comparable prior period information. |
COMPANY BACKGROUND- Stock split
COMPANY BACKGROUND- Stock split (Details) | 3 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 | Mar. 31, 2021 |
IPO | ||||
Shares issued | 10,454,545 | 9,090,909 | ||
Share price | $ 24 | $ 24 | ||
Proceeds from issuance of common stock | $ 224,657 | |||
Aggregate purchase price | $ 50,000 | |||
Share Price Percentage Of I P O Share Price | 94.00% | |||
Underwriters option | ||||
Shares issued | 1,363,636 | |||
Private placement | SCA Horus Holdings, LLC | P A R Investment Partners, L.P | ||||
Shares issued | 2,216,312 | |||
Private placement | SCA Horus Holdings, LLC | Certain funds or accounts managed by an investment adviser subsidiary of Blackrock, Inc | ||||
Shares issued | 2,216,308 |
COMPANY BACKGROUND (Details)
COMPANY BACKGROUND (Details) $ / shares in Units, $ in Thousands | Jun. 27, 2020aircraft | Jun. 26, 2020aircraft | Dec. 13, 2019item | Mar. 31, 2021shares | Mar. 31, 2020shares | Dec. 31, 2019USD ($)$ / sharesshares | Jan. 30, 2020$ / shares |
Exercise price | $ / shares | $ 0.0005 | ||||||
Amazon Agreement | |||||||
Term of agreement | 6 years | ||||||
Number of extension option | item | 2 | ||||||
Term of agreement | 2 years | ||||||
Threshold term of agreement | 10 years | ||||||
Number of aircrafts operated | aircraft | 12 | 10 | |||||
Warrants issued | 9,482,606 | ||||||
Exercise price | $ / shares | $ 15.17 | ||||||
Warrants vested | 189,652 | 0 | 632,183 | ||||
Number of warrants that vest on achievement of each milestone | 63,217 | ||||||
Milestone achievement for warrants to vest | $ | $ 8,000 | ||||||
Cumulative warrants vested | 1,074,704 |
BASIS OF PRESENTATION (Details)
BASIS OF PRESENTATION (Details) $ in Thousands | 3 Months Ended | 12 Months Ended | ||
Mar. 31, 2021 | Mar. 31, 2020USD ($) | Dec. 31, 2020USD ($) | Dec. 31, 2019USD ($) | |
BASIS OF PRESENTATION | ||||
Reclassification In common stock Value | $ 238,694 | $ 238,694 | $ 239,073 | |
Stockholders' Equity Note, Stock Split, Conversion Ratio | 18.8886 |
IMPACT OF THE COVID19 PANDEMIC
IMPACT OF THE COVID19 PANDEMIC (Details) - USD ($) $ in Thousands | Apr. 29, 2021 | Apr. 22, 2021 | Oct. 26, 2020 | Mar. 31, 2021 | Dec. 31, 2020 | Apr. 15, 2021 |
IMPACT OF THE COVID19 PANDEMIC | ||||||
Grants recognized | $ 4,831 | $ 32,208 | $ 62,312 | |||
CARES Act employee retention credit | $ 334 | $ 2,328 | ||||
Subsequent Event | ||||||
IMPACT OF THE COVID19 PANDEMIC | ||||||
Grants recognized | $ 4,831 | |||||
Grants receivable under Payroll Support Program PSP3 | $ 34,547 | |||||
Proceeds from government grants | $ 17,274 | |||||
U. S. Department of the Treasury CARES Act Loan | ||||||
IMPACT OF THE COVID19 PANDEMIC | ||||||
Loan received | $ 45,000 |
REVENUE - Disaggregation of Ope
REVENUE - Disaggregation of Operating Revenue (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
REVENUE | ||
Operating Revenues | $ 127,611 | $ 180,330 |
Domestic | ||
REVENUE | ||
Operating Revenues | 119,312 | 163,038 |
Latin America | ||
REVENUE | ||
Operating Revenues | 7,877 | 17,076 |
Other | ||
REVENUE | ||
Operating Revenues | 422 | 216 |
Passenger | ||
REVENUE | ||
Operating Revenues | 104,195 | 178,486 |
Scheduled service | ||
REVENUE | ||
Operating Revenues | 54,620 | 114,228 |
Charter service | ||
REVENUE | ||
Operating Revenues | 25,805 | 29,227 |
Ancillary | ||
REVENUE | ||
Operating Revenues | 23,770 | 35,031 |
Cargo | ||
REVENUE | ||
Operating Revenues | 21,585 | |
Other | ||
REVENUE | ||
Operating Revenues | $ 1,831 | $ 1,844 |
REVENUE - Contract Balances (De
REVENUE - Contract Balances (Details) $ in Thousands | 3 Months Ended | |||
Mar. 31, 2021USD ($)aircraft | Mar. 31, 2020USD ($) | Dec. 31, 2020USD ($) | Dec. 31, 2019USD ($) | |
REVENUE | ||||
Maintenance expense | $ 9,210 | $ 6,478 | ||
Total Contract Liabilities | 120,517 | $ 128,383 | ||
Air Traffic Liabilities | ||||
REVENUE | ||||
Total Contract Liabilities | $ 94,733 | 101,075 | ||
Threshold period in which tickets can be booked in advance | 12 months | |||
Loyalty Program Liabilities | ||||
REVENUE | ||||
Total Contract Liabilities | $ 20,774 | 22,321 | 22,069 | $ 22,892 |
Revenue recognized | 2,152 | $ 2,206 | ||
Amazon Deferred Up-front Payment | ||||
REVENUE | ||||
Total Contract Liabilities | $ 5,010 | 5,240 | ||
Costs to fulfill contract with Amazon | ||||
REVENUE | ||||
Number of cargo aircraft | aircraft | 12 | |||
Maintenance expense | $ 138 | |||
Contract Assets | 3,312 | $ 3,614 | ||
Passenger | Air Traffic Liabilities | ||||
REVENUE | ||||
Revenue recognized | $ 60,039 |
REVENUE (Details)
REVENUE (Details) - Amazon Deferred Up-front Payment - USD ($) $ in Thousands | 1 Months Ended | 3 Months Ended |
Dec. 31, 2019 | Mar. 31, 2021 | |
REVENUE | ||
Proceeds from startup costs | $ 10,300 | |
Warrants vested | 632,183 | |
Fair value of warrants vested | $ 4,667 | |
Remaining start up costs | $ 5,633 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2019-12-01 | ||
REVENUE | ||
Amortization period | 6 years | |
Cargo | ||
REVENUE | ||
Revenue recognized | $ 231 |
Revenue - Loyalty Program (Deta
Revenue - Loyalty Program (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Changes in the Loyalty Program Liabilities | ||
Balance - January 1 | $ 128,383 | |
Balance - March 31 | 120,517 | |
Loyalty Program Liabilities | ||
Changes in the Loyalty Program Liabilities | ||
Balance - January 1 | 22,069 | $ 22,892 |
Loyalty Points Earned | 857 | 1,635 |
Loyalty Points Redeemed | (2,152) | (2,206) |
Balance - March 31 | $ 20,774 | $ 22,321 |
Loyalty points redemption period | 2 years |
EARNINGS PER SHARE - Computatio
EARNINGS PER SHARE - Computation of basic and diluted earnings (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Numerator: | ||
Net Income | $ 12,416 | $ 7,251 |
Denominator: | ||
Weighted Average Common Shares Outstanding - Basic | 48,496,077 | 46,805,951 |
Dilutive effect of Stock Options and Warrants (1) | 4,012,109 | 1,419,652 |
Weighted Average Common Shares Outstanding - Diluted | 52,508,186 | 48,225,603 |
Basic earnings per share | $ 0.26 | $ 0.16 |
Diluted earnings per share | $ 0.24 | $ 0.15 |
EARNINGS PER SHARE (Details)
EARNINGS PER SHARE (Details) - $ / shares | Jan. 30, 2020 | Mar. 31, 2021 | Mar. 31, 2020 |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Weighted average shares outstanding | 40,005,885 | ||
Exercise price | $ 0.0005 | ||
Performance-based stock options | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Outstanding shares | 3,557,432 | 3,646,690 | |
Percentage Of Stock Options Expected To Meet Performance Conditions | 75.00% |
AIRCRAFT - Owned and Leased - A
AIRCRAFT - Owned and Leased - Aircraft fleet (Details) $ in Thousands | 1 Months Ended | 3 Months Ended | ||
Jan. 31, 2020aircraft | Mar. 31, 2021USD ($)aircraft | Mar. 31, 2020USD ($)aircraft | Dec. 31, 2020USD ($) | |
AIRCRAFT - Owned and Leased | ||||
Balance at beginning of period | 43 | |||
Additions | 5 | |||
Removals | (5) | |||
Balance at end of period | 43 | |||
Number of aircrafts previously under operating leases | 5 | |||
Operating leases | ||||
AIRCRAFT - Owned and Leased | ||||
Number of aircrafts previously under operating leases | 5 | |||
Passenger | ||||
AIRCRAFT - Owned and Leased | ||||
Balance at beginning of period | 31 | 31 | 31 | |
Additions | 5 | 3 | ||
Removals | (5) | (2) | ||
Balance at end of period | 31 | 32 | ||
Number of aircrafts previously under operating leases | 3 | |||
Number of new aircrafts purchased | 2 | |||
Number of aircrafts refinanced | 3 | |||
Passenger | Owned | ||||
AIRCRAFT - Owned and Leased | ||||
Balance at beginning of period | 5 | 14 | 5 | |
Additions | 5 | 3 | ||
Balance at end of period | 19 | 8 | ||
Accumulated depreciation on owned assets | $ | $ 57,950 | $ 52,048 | ||
Depreciation expense | $ | $ 8,800 | $ 5,121 | ||
Passenger | Finance leases | ||||
AIRCRAFT - Owned and Leased | ||||
Balance at beginning of period | 10 | 5 | 10 | |
Balance at end of period | 5 | 10 | ||
Accumulated amortization on finance lease assets | $ | $ 18,517 | $ 13,018 | ||
Amortization expense | $ | $ 2,692 | $ 4,290 | ||
Passenger | Operating leases | ||||
AIRCRAFT - Owned and Leased | ||||
Balance at beginning of period | 14 | 12 | 14 | |
Removals | (5) | (1) | ||
Balance at end of period | 7 | 13 | ||
Number of aircrafts previously under operating leases | 1 | |||
Passenger | Seasonal leases | ||||
AIRCRAFT - Owned and Leased | ||||
Balance at beginning of period | 2 | 2 | ||
Removals | (1) | |||
Balance at end of period | 1 | |||
Cargo | Aircraft Operated for Amazon | ||||
AIRCRAFT - Owned and Leased | ||||
Balance at beginning of period | 12 | |||
Balance at end of period | 12 |
AIRCRAFT - Owned and Leased -_2
AIRCRAFT - Owned and Leased - Aircraft Lease Payment Deferrals (Details) - USD ($) $ in Thousands | Mar. 31, 2021 | Dec. 31, 2020 |
AIRCRAFT - Owned and Leased | ||
Aircraft Lease Payment Deferrals | $ 975 | $ 7,569 |
Finance leases | ||
AIRCRAFT - Owned and Leased | ||
Aircraft Lease Payment Deferrals | 533 | 2,133 |
Operating leases | ||
AIRCRAFT - Owned and Leased | ||
Aircraft Lease Payment Deferrals | $ 442 | $ 5,436 |
AIRCRAFT - Owned and Leased -_3
AIRCRAFT - Owned and Leased - Aircraft Maintenance Deposits Contra-Assets (Details) $ in Thousands | Apr. 11, 2018USD ($)aircraft | Mar. 31, 2021USD ($)aircraft | Mar. 31, 2021USD ($)aircraft | Mar. 31, 2020USD ($) | Dec. 31, 2020USD ($) |
AIRCRAFT - Owned and Leased | |||||
Number Of Purchased Aircrafts Previously Under Operating Leases | aircraft | 5 | ||||
Amortization of Over-market Liabilities | $ 2,004 | $ 2,913 | |||
Aircraft maintenance deposits contra assets | |||||
AIRCRAFT - Owned and Leased | |||||
Remaining contra assets | $ 26,512 | 26,512 | $ 36,729 | ||
Reduction in contra assets | (10,217) | ||||
Decrease in contra assets relating to purchase of aircrafts previously leased | $ 9,880 | ||||
Number Of Purchased Aircrafts Previously Under Operating Leases | aircraft | 5 | ||||
Contra assets as a reduction to maintenance expense | 0 | 425 | |||
Over-market lease rates | |||||
AIRCRAFT - Owned and Leased | |||||
Remaining contra assets | 12,891 | $ 12,891 | 16,501 | ||
Decrease in contra assets relating to purchase of aircrafts previously leased | $ 2,858 | ||||
Number Of Purchased Aircrafts Previously Under Operating Leases | aircraft | 5 | 5 | |||
Over market liabilities | $ 21,600 | $ 21,600 | $ 37,409 | ||
Reduction in over-market maintenance reserve liabilities | (15,809) | ||||
Reduction in the over-market liabilities | 13,805 | ||||
Amortization of Over-market Liabilities | $ 2,755 | $ 4,103 |
DEBT - Lines of Credit (Details
DEBT - Lines of Credit (Details) $ in Thousands | Feb. 10, 2021USD ($) | Mar. 31, 2021USD ($)aircraft | Apr. 06, 2021USD ($) |
DEBT | |||
Number of aircrafts previously under operating leases | aircraft | 5 | ||
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 | ||
Credit Facilities | Minimum | |||
DEBT | |||
Minimum EBITDAR required to be maintained | 62,100 | ||
Credit Facilities | Maximum | |||
DEBT | |||
Minimum EBITDAR required to be maintained | 87,700 | ||
Credit Facilities | Base rate | |||
DEBT | |||
Minimum interest rate | 2 | ||
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% | ||
Delayed Draw Term Loan Facility | |||
DEBT | |||
Maximum borrowing capacity | $ 90,000 | ||
Amount drawn | $ 68,000 | ||
Number of aircrafts previously under operating leases | aircraft | 5 | ||
Delayed Draw Term Loan Facility | Subsequent Event | |||
DEBT | |||
Amount drawn | $ 12,500 |
DEBT - Long-term Debt (Details)
DEBT - Long-term Debt (Details) $ in Thousands | Mar. 24, 2021USD ($) | Oct. 26, 2020USD ($) | Dec. 31, 2020USD ($)aircraft | Mar. 31, 2021USD ($) |
Notes payable under the Company's 2019-1 EETC agreement | ||||
DEBT | ||||
Face amount | $ 248,587 | $ 248,587 | ||
Number of used aircrafts purchased or refinanced | aircraft | 13 | |||
U. S. Department of the Treasury CARES Act Loan | ||||
DEBT | ||||
Appraised value of aircraft purchased | $ 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 | Mar. 31, 2021 | Dec. 31, 2020 |
DEBT | ||
Total Debt | $ 307,732 | $ 285,801 |
Less: Unamortized debt issuance costs | (4,391) | (3,338) |
Less: Current Maturities of Long-term Debt | (29,232) | (26,118) |
Total Long-term Debt | 274,109 | 256,345 |
Notes payable under the Company's 2019-1 EETC agreement | ||
DEBT | ||
Total Debt | 227,347 | 227,347 |
Face amount | $ 248,587 | $ 248,587 |
Notes payable under the Company's 2019-1 EETC agreement | Minimum | ||
DEBT | ||
Interest Rate | 4.13% | 4.13% |
Notes payable under the Company's 2019-1 EETC agreement | Maximum | ||
DEBT | ||
Interest Rate | 6.95% | 6.95% |
Delayed Draw Term Loan Facility | ||
DEBT | ||
Total Debt | $ 68,000 | |
U. S. Department of the Treasury CARES Act Loan | ||
DEBT | ||
Total Debt | $ 45,419 | |
Notes payable to Wilmington Trust Company | ||
DEBT | ||
Total Debt | $ 11,880 | $ 12,506 |
Interest Rate | 8.45% | 8.45% |
Other Notes payable | ||
DEBT | ||
Total Debt | $ 505 | $ 529 |
Interest Rate | 5.00% | 5.00% |
DEBT - Future maturities of the
DEBT - Future maturities of the outstanding Debt (Details) - USD ($) $ in Thousands | Mar. 31, 2021 | Dec. 31, 2020 |
Debt Principal Payments | ||
Remaining 2021 | $ 28,799 | |
2022 | 32,059 | |
2023 | 44,900 | |
2024 | 43,962 | |
2025 | 45,062 | |
Thereafter | 112,950 | |
Total | 307,732 | $ 285,801 |
Amortization of Debt Issuance Costs | ||
Remaining 2021 | (775) | |
2022 | (983) | |
2023 | (908) | |
2024 | (785) | |
2025 | (670) | |
Thereafter | (270) | |
Total | (4,391) | $ (3,338) |
Debt, net | ||
Remaining 2021 | 28,024 | |
2022 | 31,076 | |
2023 | 43,992 | |
2024 | 43,177 | |
2025 | 44,392 | |
Thereafter | 112,680 | |
Net Debt | $ 303,341 |
DEBT - Measured at fair value (
DEBT - Measured at fair value (Details) - USD ($) $ in Thousands | Mar. 31, 2021 | Dec. 31, 2020 |
DEBT | ||
Carrying Amount | $ 307,732 | $ 285,801 |
Fair Value | $ 301,513 | $ 279,119 |
FUEL DERIVATIVES AND RISK MAN_3
FUEL DERIVATIVES AND RISK MANAGEMENT (Details) - Fuel Derivative Contracts $ in Thousands, gal in Millions | 3 Months Ended | |
Mar. 31, 2021USD ($)gal | Mar. 31, 2020USD ($) | |
Changes in Derivative Assets (Liabilities) | ||
Balance - January 1 | $ (1,173) | $ 2,233 |
Non-cash Gains (Losses) | 2,386 | (21,752) |
Contract Settlements | (8) | 65 |
Balance - March 31 | 1,205 | (19,454) |
Fuel Derivative Gains (Losses) | ||
Non-cash Gains (Losses) | 2,386 | (21,752) |
Cash Premiums Paid | (284) | |
Total Fuel Derivative Gains (Losses) | $ 2,386 | $ (22,036) |
Outstanding volume | gal | 12.7 |
FAIR VALUE MEASUREMENTS (Detail
FAIR VALUE MEASUREMENTS (Details) - Recurring - USD ($) $ in Thousands | Mar. 31, 2021 | Dec. 31, 2020 |
FAIR VALUE MEASUREMENTS | ||
Total Assets measured at fair value on a recurring basis | $ 1,205 | |
Total Liabilities measured at fair value on a recurring basis | $ 1,173 | |
Fuel Derivative Contracts | ||
FAIR VALUE MEASUREMENTS | ||
Total Assets measured at fair value on a recurring basis | 1,205 | |
Total Liabilities measured at fair value on a recurring basis | 1,173 | |
Level 2 | ||
FAIR VALUE MEASUREMENTS | ||
Total Assets measured at fair value on a recurring basis | 1,205 | |
Total Liabilities measured at fair value on a recurring basis | 1,173 | |
Level 2 | Fuel Derivative Contracts | ||
FAIR VALUE MEASUREMENTS | ||
Total Assets measured at fair value on a recurring basis | $ 1,205 | |
Total Liabilities measured at fair value on a recurring basis | $ 1,173 |
INCOME TAXES (Details)
INCOME TAXES (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2021 | Mar. 31, 2020 | Apr. 15, 2021 | |
Income Taxes | |||
Effective tax rate | 30.30% | 25.20% | |
Percentage of cash savings | 85.00% | ||
Percentage of cash savings retained | 15.00% | ||
Income Tax Receivable Agreement | $ 115,200 | ||
Subsequent Event | |||
Income Taxes | |||
Grants receivable under Payroll Support Program PSP3 | $ 34,547 |
SPECIAL ITEMS, NET - Schedule o
SPECIAL ITEMS, NET - Schedule of special items, net (Details) - USD ($) $ in Thousands | Apr. 22, 2021 | Mar. 31, 2021 | Dec. 31, 2020 |
SPECIAL ITEMS, NET | |||
CARES Act grant recognition | $ (4,831) | $ (32,208) | $ (62,312) |
CARES Act employee retention credit | (334) | $ (2,328) | |
Aircraft purchase impacts | 5,664 | ||
Other | 7 | ||
Total Special Items, net | $ (26,871) |
SPECIAL ITEMS, NET (Details)
SPECIAL ITEMS, NET (Details) | 3 Months Ended |
Mar. 31, 2021aircraft | |
SPECIAL ITEMS, NET | |
Number of aircrafts previously under operating leases | 5 |
OPERATING SEGMENTS (Details)
OPERATING SEGMENTS (Details) $ in Thousands | 3 Months Ended | |
Mar. 31, 2021USD ($)itemsegment | Mar. 31, 2020USD ($) | |
OPERATING SEGMENTS | ||
Number of operating segments | segment | 2 | |
Number of internal passenger groups | item | 2 | |
Operating Revenues | $ 127,611 | $ 180,330 |
Non-Fuel Operating Expenses | 105,275 | |
Aircraft Fuel | 24,274 | 55,561 |
Special Items, net | (26,871) | |
Total Operating Expenses | 102,678 | 165,100 |
Operating Income | 24,933 | 15,230 |
Interest Income | 15 | 251 |
Interest Expense | (7,121) | (5,616) |
Other, net | (5) | (169) |
Income before Income Tax | 17,822 | $ 9,696 |
Passenger | ||
OPERATING SEGMENTS | ||
Operating Revenues | 106,026 | |
Non-Fuel Operating Expenses | 87,205 | |
Aircraft Fuel | 24,253 | |
Special Items, net | (18,206) | |
Total Operating Expenses | 93,252 | |
Operating Income | 12,774 | |
Cargo | ||
OPERATING SEGMENTS | ||
Operating Revenues | 21,585 | |
Non-Fuel Operating Expenses | 18,070 | |
Aircraft Fuel | 21 | |
Special Items, net | (8,665) | |
Total Operating Expenses | 9,426 | |
Operating Income | $ 12,159 |
SUBSEQUENT EVENTS (Details)
SUBSEQUENT EVENTS (Details) - USD ($) $ in Thousands | Apr. 29, 2021 | Apr. 22, 2021 | Mar. 31, 2021 | Dec. 31, 2020 | Apr. 15, 2021 |
SUBSEQUENT EVENTS | |||||
Grants recognized | $ 4,831 | $ 32,208 | $ 62,312 | ||
Subsequent Event | |||||
SUBSEQUENT EVENTS | |||||
Grants recognized | $ 4,831 | ||||
Grants receivable under Payroll Support Program PSP3 | $ 34,547 | ||||
Proceeds from government grants | $ 17,274 |