SNCY - Earnings call transcript Q4 2021 | Sun Country Airlines Holdings, Inc.

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Operator

Welcome to the Sun Country Airlines Fourth Quarter and Full Year 2021 Earnings Conference Call. My name is Norma, and I will be your operator for today's call. At this time, all participants are in a listen-only mode. After the speakers’ presentation, there’ll be a question-and-answer session. [Operator Instructions]. the to turn now would conference Mr. over I Relations. Allen, Director Investor of Chris Mr. Allen, you may begin.

Chris Allen

joined Jude Officer; today Executive I'm help you. Thank by Davis, group others and answer talented questions. Officer; Bricker, President Chief a Financial and of to Dave Chief our

may I’d company certain we call, begin, that this constitute to like Before statements everyone that remind during the make statements. forward-looking

differ expectations, uncertainties. may are to risk based and current our We may any beliefs, obligation filings. which Actual you include and upon assume earnings SEC risks statements, assumptions to We update forward-looking today statements. to review remarks factors forward-looking Our statements subject encourage and release materially. results outlined no most management's the our cautionary in

the You that can call Investor ir.suncountry.com. website I of said, over find to With at our to our portion fourth turn on now release Relations like would the Jude. quarter press

Jude Bricker

Thanks, adjusted again Chris. record Today, XXXX. year everyone. in Further, excited CARES full announce for we're to Good the industry. morning, our Act margins, results lead benefit,

reliably us business we've of low to multi-segment allow capacity crisis. of as airlines believe We're deliver exogenous predictable through cycles, due one due businesses. best to respond cargo the the throughout we'll leisure unique model flexibility schedule demonstrating We The all able to of and to industry among the model, to advantages, shocks. predictability deliver and charter both industry. demand fluctuations be combination the our profitability been structural COVID industry's flexible able schedule our in most fixed to service cost this and the is Our

I have want team the put our Thank to the operation as start, peak, to of the circumstances I of some be front the to members. lines all want you to raised set operation amazed a seen aviation to my been I'm they concerns make folks what dealing challenging and sure work. we've this operations. I do. day not First, since as our I've as To with on most delivered, for impressed each commonly industry. yet with about holiday an we address professionals ever continue always in talk

also our issues. we're agreement groups, a in our set. staffing all capacity, It group, positive believe the Across will with should confidence industry, groups. most announced seen across and notably we've a I major on or our Currently in pressure fares. downward Shortages, In our to growth pay certainly pilots, ability those needs. competitive and pilot offerings benefit reached give staffing recently. staff. bringing effects acutely tight for labor the negotiated hiring our however technicians, labor market We in airlines targets. First, We've result be each therefore staffing and pilot challenges ramp most those our felt to investors’ pay in increased new of just are on above staff of

XXXX. Further, Second XXXX and we expect related cost in be CASM under less XXXX. the ex-fuel to $X.XX we pressures, our price. CASM of rates, still well adjusted to control than in fuel pilot new We cost including still remain is positions, come expect adjusted by including

diluting We our expect of introducing legacy out fleet able to to pressures growth. in efficiencies, by technology labor offset to continue inflationary be and deals, overhead cycling our with

will the us that schedule our our to a outperformance allows fuel flying to want a build environment. of fuel high fuel will a has any of third in our equal. And everyone, industry operation variable schedule environment, I about believe contribute in positively service all widen I However, pass-through remind else economics.

March the domestic reported, other demand, leisure recovery in on we're our March a for our effects are particularly our the currently staff strong volume peak maximum by bookings, and we in with confidence indicating carriers limited have recovery, revenue for seeing of schedule selling recovery. Finally, period. certainly we our variant like felt now markets have with a and Omicron

but new that about of continuing price announced to fleet plan, more also point feedstock wanted Dave our five transactions We favorable I we're NG for will to additional see growth out aircraft. and fleet the aircraft. availability XXX talk

expect the as that, max to production turn aircraft. over We to And we’ll this in ramps, continue for Dave. demand with along recovery with

Dave Davis

year launched our as We're XXXX, on results a for and In Jude. Thanks, challenging sheet March, very public pleased airline which a our signed year balance XX% long grew block great offering, gave versus five pilot lot during we the new agreements rapidly Caesars ratified least resources a term accomplished and Entertainment, we in necessary XX% and XXXX. We we XXXX, our industry. hours We agreement. initial and by the added strengthened with us negotiated with charter growth. our versus drive aircraft, and the to passenger MLS

five All greater quarters maintaining EBITDA of this consecutive of while was done than margins. XX%

to by MSP. commuting to system. the Country and work XXX% our agreement and promising, four our Two, to pilot a the pilots pilots than are our applications being preferential of compared Amazon highly Early And crews. reserve to need schedule new which more for agreement team. for the their unlock with allow to key to Specific us benefits of rules ability of are work requirement costs growth. include, new the one, a low-cost a changes rules future trips from pilot competitive indications home assign Our Country flexibility we agreement pilots, recruit to us flight prior peers three, speaks are and bidding plans. by to in allowing a pilot dedication bases was pilots growth potential Sun and new reduce allow and professionalism new up months’ negotiated locations, These our benefits, group pay the make and provide company growth. more announced. start to outside option December negotiating that to as was months of support will the four-year will attractive of the enabler key implementation that The efficiently in our Sun to is time, This should less deal signed rates,

and rates our behind pay XX% the in cost the are and industry, new contract significantly pilot to between the approximately pilot by were XXXX Our hour per XXXX. increase block expected changes

most in Pilot new hour is versus this to block be to of expected per it to work block expected be and realized. elsewhere, expected X% in as non-fuel than decrease the cost increase lower XXXX, full per to expect our able is was of absorb X% hour, the XXXX. benefit are to are costs however, We total rules increase XXXX only XXXX, and operating costs

‘XX we delivered fourth quarter the specific of adjusted ‘XX, pretax $X revenue income $X.XX, now and of turn to of results. of me QX million. EPS In $XXX.X on adjusted Let million,

income adjusted our was on was adjusted revenue $XX.X million, XXXX, $X.XX year and $XXX million. of EPS full For pretax

impact We operating given and in margins We Moreover, X.X% XXXX quarter. on particularly are very results effects industry full were which pandemic year QX, acute pandemic in the to industry-leading. pleased margin the bookings. strongest for the is the QX our full Country's year believe with had respectively. Sun XXXX, Operating our be and profitable were traditionally X.X%,

or going XX% an our do industry. XXXX, forward. the Despite has to consistently we year non-fuel Regarding expense since per take costs, out handling adjusted only XX% than only ‘XX demonstrated be XXXX X% Full top able the aircraft CASM factor XXXX. lower GAAP maintained an on XXXX, cost the of higher wage they our We've were XXXX, to we than ground declined of pressure block growth while operating reduction near total departure our in a expect versus increased so in in X% CASM in costs Per $X.XX.XX, on XXXX million ability ASMs. completion to XX% $X expenses, adjusted business, ownership QX was by were hours. QX in and a X%

to of Jude we pilot XXXX. which As $X.XX.XX finish includes new impact the in the than adjusted the we XXXX lower achieved CASM, mentioned, our year agreement, expect

of Turning was was pax same charter Caesar's revenue X%, XXXX. the while now QX finished was $XXX finished $XX, in ‘XX scheduled XX% QX On hours block hours charter in Revenue quarter company's versus basis, only were revenue when ‘XX versus same ancillary to towards than the in will XXXX, QX contribute revenue charter a $X.X QX XXXX highest which service the million $XX quarter in revenue. block XXXX history. in down flying service begin the XX% QX QX MLS ancillary period down was as strong. was scheduled average ‘XX. per higher and the the per in end QX down Both ’XX, to fewer passenger meaningfully ’XX. XX% revenue base fare quite versus Despite period. the flying

is revenue between to $XXX QX be Let million. and me total now $XXX guidance. turn expected million to XXXX

We're X% for quarter. of quarter strongest to our historically operating anticipating is price quarter is between $X.XX year. first the of the XX%. margin a be gallon per expected reminder, a fuel As the Adjusted and

Finally, we we're open nature year expect highest ready the QX Due of level ASMs, for $X.X of to we ASMs seasonal our have by now the billion. followed of With XXXX business, to to it total the be system questions. full expect QX. that, approximately up to for

Operator

[Operator Instructions].

comes question Research. Wolfe first from Keay Our with Hunter

open. now Your line is

Hunter Keay

thanks. Hey,

Dave, Just kind ASMs? billion last that $X.X charter scheduled a of for on that's the one plus quick together

Dave Davis

Yes. That’s right.

Hunter Keay

want was pal, to Dave, thanks. Jude. or for the right, Allegiant view could wondering - of thought but maybe this evolving old max that wondering work if what planes your Jude comment on necessarily on bought, that All if them, there's an thoughts not maybe And to kind I you you. any your then that that for just

Jude Bricker

been able max tear-down late much today. XX I closed. I and don't not with compete seeing so just think We but to far always values values make it's above six work aircraft that. we aircraft, it, aren't the mean, that model still thus economics I old, know. And study years the haven't we're can don't to for used

Hunter Keay

you. got right. I All

does you're of or the are Spirit-Frontier for for how terms Again, competitive landscape? deal. thinking that impact, thinking overall growth, question overall the on about in of terms it? will how you algorithm the Another that you And the how about in change you

Jude Bricker

single Not Minnesota find as company. been of don't successful multiple rapidly. as things And that overlap been a They've years the hasn't at both don't them trying And been lot with changes for I very all. carriers. both do there that of We for to out other either have them. think a growing doesn't with those so they’ve

of future view have positive, necessarily lot therefore, a lot it change not doing. it's a thing. that also won't it So, with of not a them negative. in have makes we're we my really overlap is, what And them now. a overlap great really real with We doesn't isn't a don't it the but

Dave Davis

consolidation we generally view think thing. industry in Hunter, good sort of a the I as

positively level, toward inclined a we're high it. from So,

Hunter Keay

to lot. I'm a queue. get right. Thanks the All going back in

Operator

you. Thank

next Our Duane from Evercore question Pfennigwerth with comes ISI.

open. is line Your

Duane Pfennigwerth

everybody's Hope morning. warm. this you with speaking be staying to nice guys, Hey

Jude Bricker

actually today. It's XX degrees

it's record. a record So, an eight-week

Duane Pfennigwerth

Break little but the and with that's you your sunscreen you the On now have and you exactly. pilot might of new cargo out this going basing, to bit could thinking it about side expand to side, a how which the how business, talked on new flexibility, how passenger impact the respect on that impacts you markets? help

Jude Bricker

Yes.

of more us efficiently schedule that here which the one of pilots. got and for quality system, think we out allow is things going pilots, PBS help was cost the to I the take to improve biggest trip our implementation us

So, other has place. in Sun airlines most it. have Country this

more now got Minneapolis Amazon. We for out a it get This thing needed pilots to of cargo now for station be we've trips ability big growth, to it. it. we’ve reserve eligible gotten to was and So, for

In for So, pilots our necessarily to is start interesting don't Sun in forward. of trips Minneapolis up who the because live rolling to, it cities on hopefully, Country I pilots we're what was the ultimately or here going more I Minneapolis, for our improves get of to to locations our the it's fair home win than it don't growth of start does rather Generally, and quality share strategy but us fly think changes have other this ability big sort for side, going here pilots passenger pilots. to to makes life up. come that from they'll think help words, commuting a us.

Dave Davis

like of are it kind sounds you're towards, another in Duane, plan. Minneapolis? And going that Yes. we to angling isn't create the

like non-Minnesota Southern on Minnesota So, and into and seasonal, have a the Dallas summer opportunities mind, keep and Reno Minnesota-based lot charter then a traffic. summer of our to a And peak (indiscernible) see which replicate network, market from on Dallas. in significant traffic capacity summer of going major AC. origination is across deploy business with for doesn't out LA that summer be we'll to that our of O&Ds. really And We cities growth blueprint originations focus Gulfport and we touch is

just flexibility to assets - just the contract country. this the the around we that adds deploy so, can And

Duane Pfennigwerth

maybe then you vis-à-vis of incremental lot you flexibility a about this type? was larger now in a makes along questions. a those maybe Thanks It perhaps strokes for aircraft type, complexity And the support of versus it, sense. lines, helpful broad up, how potentially my can opportunities do new follow that fleet with which weigh just mentioned And supporting you just cargo? increased growth Can opportunities the taking for you talk Amazon.

Jude Bricker

shared our Duane. service. discussions, them obviously, on - is about remains On about, But I read continual focus into growth, primary leveraging as Amazon growth. in we Thanks, Yes. their all mean, - the we're And should is with I publicly say, for rapidly. business negotiate growing recovery know

before out the of started more said, have adding I comments our any and don't fleet an the XXXs be cargo it. today. build aircraft remain aircraft. opportunity, flexible, would passenger of I mean, there's utilization we're Our take really kind that type than we'll preference existing That any be if other being able operating We we to to on

Duane Pfennigwerth

thoughts. the Appreciate

Operator

you. Thank

with Brandon comes Barclays. question from next Oglenski Our

Your line is open.

Brandon Oglenski

much taking Hey limitations mentioned you Jude, as staffing. thanks you think my I correctly? as and I that you're Did March a on everyone, good hear morning, based flying with you for can, questions. schedule

Jude Bricker

right. that's Yes,

XX, started we've - earlier than - XX and have of the We of adding we industry. rest industry situation So, but the airplanes, passenger months at ago. then hiring catching to than XX up or with COVID a there just do. in rest of the continually in was the we're of lot so been XX into passenger went a October, added different cargo so aircraft. just pilots And airplanes, been

So, to a going it's and up the fleet while to us to staff has take grown just that. substantially,

of the of we little Our up. XX a of have ramp two kind pilots the time expanding, it COVID make want to we're capability. training of staff a just training takes that that, process times in we into three pipeline, month but was that that went all to or And we which with, and bit

Brandon Oglenski

Appreciate Okay. that.

something in not period. commercial spring you're it's break the So, like seeing

on favorable you had think demand. commentary I pretty

Jude Bricker

Yes, absolutely.

COVID particularly several last So, the quarter the now. I mean, been long a environment tough weighted it’s a the the towards about, first as for we've to us time in forecast like seems And in quarter. is heavily it of talking very revenue weeks

highly the what And of And of weeks, like last, the just the we're country, see international with seeing begins it the And the example, to starting and bookings across COVID is markets what with in our and other markets into see know, extend turning corner we way. recovery it markets. longer that in this haul in just same just leisure positive. serve. I don't and really, two for over we're domestic are we so, some now waves, bookings to And the is hospitalizations, really waves like correlated other crisis, fall-offs our

in still like today, uncertainty, first out So, have that a quarter, you lot of if such a finish quite our looks quarter. a of for forecast revenue there's it is the extrapolate wide the we that's really we're what bracket seeing why positive but

Brandon Oglenski

that. appreciate more, just Dave. And if Okay, ask could I maybe one of

financial the or talk difficulties. some You guys prepared release, operational about if you Can you remarks, at that, from implications about mentioned the and mind? the impacts don't least Amazon in in of

Dave Davis

sort COVID-related, minimal. we towards that operational cold the $X weather disruptions impact abnormally financial really, of year, of fourth of us high here. the issues I storm implications us. to perfect financial And pretty some some then had were that staffing would cancellations in say issues quarter a Yes. sort of outage really of The end We let's the of an the level all right had in think as, for an of these IT resulted million-ish. were

not us fourth So, the impact in a in for huge quarter.

Jude Bricker

across bit the we a mean, like I little see just contextualize want to - I kind of ecosystem. just

So, associated maintenance staffing hiring chain. to on agencies and rely are support, also vendors for time control, the staffing then all both us, and but and the issues with federal COVID, ground like issues also and sick traffic having supply air and we related TSA our that for FAA

the service to And So, kind going airlines we of environment put summer now. as capacity announced. commentary we're we that's fares a just on as That'll and for a like bulletins be service Boeing. weird as into governor push repairs to and delayed engineering in that industry see It's getting work the I have aircraft done, believe into positive from right continue period.

Brandon Oglenski

you. Thank

Operator

Thank you.

O'Brien question next with Catherine from Goldman Sachs. Our comes

open. now is line Your

Catherine O'Brien

morning, everyone. Hey, much the for Thanks time. good so

you revenue on there or that beat that? drove can higher some here, it with quarter, us of part passenger ops last Any walk was just one, mission was the ops think incremental stronger charter the what quarter quarter, charter your beat? this I drove So, third through Amazon, Afghani just demand?

Dave Davis

in mean, the then higher I down Yes, probably and went coming was think had off fare. call, we were the the it of into a happened. we uncertain environment, I we when right? thing really quarter Omicron Delta,

were we revenue think and and fare the outperformance. just strengthened guide, the pretty environment that somewhat So, on produced the cautious I rapidly

Jude Bricker

Yes.

Omicron strong March really up holiday the that kind demand point back we're as period. Delta, recall went was you place late really next was move to just we day where the saw the September from the Omicron kind environment a of same And this this dramatic really increasing, in we that weak variant with of saw of kind period. inflection into to and If we we through increase it around until and now

our into peak really weeks I'm the spring we in four break next on And so, I demand bullish season. holiday move as just six to

Catherine O'Brien

it. Got

Okay.

how answered the like last you're you thinking the March. about weighted, several bit very quarter seasonality. XQ back bookings you sense. which quarter, you half certainty makes forecasting Omicron just about trying as as my us little color Is just there color on out? just on all. the the have conservatism were more into some like some - follow-up, in of weeks to in, amount about or of forecasting like where how can you first we a get give spoke that work it's you a thought That to It’s than have But it typical So, variant, the is, get you fair too given first feel you locked do you of degree how due already XQ? you’ve

Jude Bricker

to maybe our to and revenue color. going Grant who for turn over I'm some runs it

Grant Whitney

first Catherine. thanks, forecast said. We've what Yes. after I return periods instructive And say Delta distinct how us, sort had these seeing waves demand of quarter we the of so was quarter, would terms peak would little And that for pretty Jude to and the at I as look was of we three different. of - good which fourth echo play in sort that performed. how out bit things gotten a

and October break we half holiday We have a of second school good really December. where saw in the demand, Thanksgiving,

we the we quarter, in And about that's overall for pretty the sense quarter. a have first one so, us, that, actually first good just capacity. in And have thing notable really inflection using point an

we the first is This For on XXXX. substantial pretty basis. we're XXXX where bigger a than a while, trailed quarter

have the good customers the brand market. about feel of good It's Minneapolis, side house, building job here. in scheduled connecting done the the really with really focused. a On We've in schedule really Minneapolis the we we

closely I our with one in team, think thing airline just is working operating we So, because are fully is that deployed the really March. the doing

does it's as team say so, that I've sure And airline I any seen. just deliver. making us, as for we that well here can the And execution,

on focused very we're So, that.

deliver. will. to confidence first of sure anything making there's that I a just we here So, the can quarter, think we And just that bring ton guardrails would

Catherine O'Brien

on - then sheet. That's to maybe quick follow great. you, one And Dave, on for clarification. Wanted up the balance the

of there's sale, not the little And have five on on comment like, for, year, from perspectives, your deliveries So, lock-ins incremental? you do I some signed on know is for balance a an here given guardrails LOIs aircraft there. are you So, stay perspective, those then, if still or - like to from management’s have aircraft training planned for being those part the deals tear-down, those Jude's perhaps eight appetite future are I guess, working much maybe guys are thanks target still aircraft on periods? this above but the you two-part sheet are bit of on, Thanks. - capacity a balance not a there forever, sheet,

Dave Davis

Yes.

Let me fleet the just talk situation. about

We has So, two our for for fleet of us last ‘XX. aircraft. those plan XXXX signed passenger adding deals in year eight

are mentioned of be going five those part to eight. are the delivering. So, I The

and think through our delivering accurate. only more to it's only need that But So, is February, find year. that us you said that'll fair the hit early plan. to I to brings And seven, fleet we be to say what it's

We market. fleet see to deals deals not is Balance the load And a will front we a that to we and concern. really very continue attractive capitalized. do the good maybe that. see extent active. We're sheet we're the in very well we little bit,

that we whatever have We access the to financing at - really rates. attractive need to

of So, available. that's this - a only limiter the point us, our There's aircraft ability Really, the get for us. fly them really opportunities of is at pilots, plenty market ability staffing are aircraft. that through side, train for to is and our plenty the limiter not

balance sheet the to on. have capacity We them bring

spot in good So, a the perspective. from yes, we're fleet

Catherine O'Brien

much great. time. for Thanks the so Okay, all

Operator

you. Thank

comes next Mike Our question Linenberg Deutsche Bank. with from

open. Your line is

Unidentified Analyst

putting (indiscernible) historic charter and recent Oh, to recapture and fares? for My cargo is in you ability can hi. given on Yes, this provide runup Mike. detail some us the more fuel your is, on aside, with higher first question

Jude Bricker

to new and to price a flights out fares. in We eliminate and the the whatever, prices going fuel to It's So, under just spectrum adding important dollar, as are there's an predictably go for raise across revenue the how That's flights We inputs we concept. scheduled is and wide service airfare. a clear don't raise return targets. to on become that of become response to outcomes just And is a us. network. our fares eliminate this high fleet fuel by marginal

for the so, unit much of a don't cost And relationship model. We that's utilization. and have

What profitable and our So, margins we're how our it to maintain okay, that's to - in at The how able high that's fuel run input? are ones fuel that's - hit and price? just are able other on we service prices. that rising business. the how fuel pass price becomes, rate what's the flights we're eliminated, And hurdle

Dave Davis

Yes. flights recapture there's And flights is look but capacity if you I talking profitable as time. think recaptured part Jude's trend. or you sort profitable industry, not see definitely of call that's across rise. instant. effect unprofitable that - And cost that a the over less of, It's about lower comes lag, down, fares the this

Unidentified Analyst

Got throughout can growth more And is tailwinds really to Or cost maybe the adjusted us it below unit that it. you inputs about restoring question, network? just Thanks. perhaps questions. cost run drive any the XXXX of Thanks ASM and better utilization my give the the for XXXX second levels? the

Dave Davis

fleet the cost Yes. cost is is part just in We on ground ‘XX averaging as in metric. us. to in continued dividends leveraging the That Minneapolis here of provide insourced I I A for significant opportunity XXXX. continued down think ASMs come side back. handling in and mean, control our continues

the the As to numbers. able in been essentially the cost we've pilot agreement. of new I out, absorb that's pointed

growth. So, and it's leveraging cost control to in elsewhere

Operator

Thank you.

Susquehanna. from comes Chris with next Stathoulopoulos Our question

open. is line Your

Chris Stathoulopoulos

everyone. morning, taking for Good question. my Thanks

and kind was great the any upcoming mutually could that with it, rules ordinary other union to or changes brought period, have or something back respect if or with the out other the So, expect was bargaining you perhaps table, curious brought going whether Thanks. resignation made to groups? there you you kind of new new that this to we mentioned should of you pilot atypical the that we of to environment, were of sort concessions see work to meaning, however any the describe to during deals in deal, want

Dave Davis

Yes.

that would So, an There's as that. nothing out PBS, talked say place. let's ordinary that's the in by interest the like industry of about it the rule the a some through for were - the others, characterize in of I getting in deal. sort Basically, changes both that work sort nothing thinking nothing sides here in of unique made, there's that table particularly had I there's work lot the brought company. probably to deal, of kind in of we this rules

at the that. stuff out Some is unique, final of on this, starting fairly and home trips details we’re hammering

this average our I things the we substantially is, are the our - of behind agreement pilots competitors were think one about our believe low-cost in of who the world.

So, there position made that other In benefits, with we're of which We not quite is was indicate and would this believe, that ground number lot are so same don’t hour be and drives up, what class block a gave. point. data the per I pilot our peers in at consistent the with groups. words, work other pay our forth, rates, what to pay

groups for So, I wouldn't other us. expect to see with work similar moves

Jude Bricker

a done just that in Alpha have our been those two on pilots our We a National career, and We’ve had. those MEC. from first was amendment has old. more time of challenges Just through industry-leading also for got amount an for Country Sun commentary whole been group the of did, negotiation the it was but now really just and really I'm pilots their in to contract. get, line we took for excited was on really maybe XX together, It's going and that they're amazing it great we the across for takes that pilot all that And And that I'm a this got guys. it pretty months. effort so it we and contract got kind lot happened. that a the finish in working and obviously, an timeline got guys. negotiated payroll our of that team, little impressed years, I the the with here excited And tremendous

Chris Stathoulopoulos

Frontier And so with Hunter's question we it the Spirit my merger to, think Okay. was I one, on and proposal back go announced second yesterday.

impact mentioned in peers do. you long of business US, to we does you perhaps doesn't we you international anything have the the But recovery this favorably. that And hearing. phenomenon there take I you said in look really haul kind that it the longer, of and keep - think So, kind managing jump-all if also there's your consolidation as approach from and inventory upselling is at

goes within wouldn't to everything So, you. you there if sell Thank merger perhaps this happening, this and to is have through where at - an opportunity perhaps markets looked inventory? else look that's typically

Jude Bricker

to days. clear, be of really we're just focused I peakiest like, the on want

that so, new going drives aircraft, the combination Frontier their have utilization that daily dynamic. of XX-hour is and of to XX And same Spirit and still these

our along opportunity don't think this set really predictable seasonal or that primarily So, a have peaks changes all day of sensitivities. at I markets of week leisure peaky

So, three contributions can't demand. have really exists any to Frontier just leisure Spirit there's modulate what's they're other and to up carrier on be with those that from of that us. capacity a demand these pick that effectively their peak as not O&Ds set XXX And served required late going to periods. than peak

changes leisure mentioned, focused a our markets as think outside So, market. still think originating it's Minneapolis, becoming these don't from on - don't I net going a to I of think I growth major in DMAs. dynamic is it Minneapolis be predictable much quickly the And positive. is think two-airline Dave I here which peak-season

Dave Davis

our growth, it's kind merger. I it's neutral that And we'll still it. feel out, to of with positive how plays Minneapolis our and And I think ex-Minneapolis strongly evaluating plans it's us that strong about see and here. think and kind for think for the we're And new I - I more of it but

Chris Stathoulopoulos

you. Thank Okay.

Operator

with up Research. Thank Hunter a you. Keay follow Wolfe And I have with

open. Your is line

Hunter Keay

that couldn't with guys place happened few. or comment compete Jude, capacity Any competitive got the you what with studied made, and became of see developing Delta, Seattle Yes. that there that tertiary here what Thanks. loyalty? may I’ve last happened you two-airline you have on a maybe schedule market similarities some when in and a there?

Jude Bricker

mean, than mean, look, a yes, market yes, with But Yes. you. the completely I different, have mean, I I of here, course. bit I the Seattle's over bigger flow with we and agree is a little ocean. geography what

and we yes, in leisure, the Alaska I a which and about want will focused with coexisting, would directly front we here. to what think seeing right model I I Alaska think a focus an we're as more there's up market. more than I mean, think for the to put think I an cities good way example on carefully, Seattle But be us allegory mean, think I is it's and to on less more even be I there Delta. Delta, with here we're twin segmented of leisure

Hunter Keay

Yes.

get You but at $X.XX year flying just you're now, clear, commies ‘XX. point your full you be guys ex-adjusted going you're to in some to ‘XX the completely right. be are that - made, CASM expecting basis. on comment you're under on And all then there saying CASM a just to

Dave Davis

full I be at thinking year point, this mean, six. is we're number our Yes. that sub going to

Hunter Keay

anyway. run for bring some and it's to Got might it. can going that you Country. talk help call to elaborate is to to just more, the benefits thing on then, people - a little And a PBS bit just about beneficial of All understand right. unique on that why Sun some you the And be PBS also,

Jude Bricker

So, I'm so be super it inappropriately. shouldn't about much passionate Like … PBS,

Hunter Keay

hear don't that. You

Jude Bricker

to great pilots. but it's our focus be for I I just think because, product a love and going the … to me,

is, just then So, month-long does from us seniority a select own scheduled schedule of allows that select order it schedule in pilots to a pilot, what and options. while set PBS building seniority, of instead their honoring

to two- portfolio And a work Alliance gets cargo a which build now an Further, a the instead than personal on want, system in select imagine is takes a for are out And outdated the from there, schedule depending just system. likely trips what of four, then, trips and cities charters, can on so, but not rolling and a PBS you. your was they basis. an just XXXX, Minneapolis, best in satisfy a for trips line own multiple through primary three-day system, you situation everybody lot we're basis for just legalities pilot calendar of change on you that rules five their on XXX. a days. personally, that's scheduling pilots that Obviously, Part more desires changed, And round

think to rolling now be month it to makes and perfect used It's a sense. able start You I anew, basis. the

other It's lot it and company. or as any pilots efficient those takes attendants’ Greg, the more restrictions. account for PBS, comments? So, flight awards into pilots both just calendars, it even a

Gregory Mays

fewer trips, your No. construction And more more came passion workforce. dropped efficiency, which means I desirable trip through. mean, means pilot the

Hunter Keay

there a behind others me? Can Chris? couple Are more, Okay. ask I

Chris Allen

two got I’ve behind Yes. you.

Jude Bricker

more. ahead. Go One

Hunter Keay

so Is right. have been I show do it weak? ops thing? Do contact. cultural have All to getting Fine. think mean, can up? you because you Why how been One are you're people to you you so have is mean, more. it volunteering others your small? while just mean, direct strong I folks a trips? have pick like, I up

Jude Bricker

really Wow, it's feel I hard. been the question. love I like

over to go me Let Greg.

Gregory Mays

Hunter. Yes,

I things. few think it's a

actually good Grant day, we’ve that have think discussions - of, just commercial looking, I super make need team that by next the in. the some we that we operations to only agreement that have had that a leaning our between evidenced that and forward. day pinpoint the we're we team we've got our have decisions mentioned relationship close daily where really shows with close We and days. next relationship, pilots to as not few seen got

just a the a close accomplish. lot organization a and that largely work. on need to but basis it's mean, it to in I lot this aligned daily work come very is, that's I So, on what think tactics there's much of think I of make what whole we that is been

Dave Davis

isn't just type. it's middle. Minneapolis, which on single-based the touch of should fleet we're One in We operator, Honolulu, is, JFK. we we're kind structural have. but a not in advantages single

lot so, of airline a ATC constraints the - congestion didn't to and like have things And we with field that. deal other

Jude Bricker

our consistency terminal here, at operation. position good of with a which in got also helps TX We've

Gregory Mays

some got. are advantages as that There definitely such we've Yes. that Yes.

Grant Whitney

schedule reset when the And the capacity we that need variable to. can we

Jude Bricker

kind we breaks, the in schedule recovery of cancel thing schedule only to That's Yes. is our fire and that other as and the Spirit-Frontier is option reset. but down exist natural breaks - you’re you’re if fire demand, for

that's We is our reset date, which have naturally Tuesday. scheduled. today,

Hunter Keay

sense. No, right, All Right. that Yes. makes great.

Gregory Mays

of a come of There's lot and hard is work. it's lot a with It work involved.

So, it's very difficult.

Jude Bricker

All right. That’s enough.

Hunter Keay

it. more have I you. Thank way. by the Appreciate

Operator

Thank you.

question with ISI. Duane Pfennigwerth next Evercore from Our comes

line Your is open.

Duane Pfennigwerth

in restrictions these may if you on be those capital us can the you thanks one how with follow-up. the stock restrictions go you'd and didn't Hey, away your recovery. this ask be most when return off-the-wall point But an not just question at airlines would remind levels? I for at it have thinking This about and

Dave Davis

Yes. year. The restrictions go away, of I Yes. think September of this end

strong. this it balance position sheet really me way. Let is The

flow think are We capital We're We shares the the the operate and strongly needs price either - substantially that is have sheet operating positive. undervalued. balance or business. buy on excess our beyond above what planes to cash share the

sort conclusions would, at can levels. these strong that you You of draw think we are but buy from our shares

Duane Pfennigwerth

Thank you. Okay.

Operator

a have Thank with you. Sachs. O'Brien follow-up Catherine Goldman I with

Your line open. is

Catherine O'Brien

‘XX the this for XXXX, for down of is Hey in just time try like year $X.XX here. that. step that of to kind comment.? should means about be guys. high-level down for versus thinking this, us Obviously, guessing exercise level extra any might we guidepost the the towards versus any I'm and But think for year thoughts XXXX. full XXXX we how below Thanks context one a but XXXX thought path I about just should high on in CASM what Thanks.

Dave Davis

Yes.

be levels. modestly should it about you XXXX think as below thinking I

of should We not knocking So, in be on quite door there the ‘XX. words, yet. other sort of we're six in

- So, confident to below XXXX we according goes levels. be modestly we'll if which be everything we're in, our plan, should modestly below

Jude Bricker

quickly cap blow that's those whether variable going were able not the not. out And shoulder how some effect on the around big recovery is to level the happens, in drive or or to I and months think input particular and CASM.

Catherine O'Brien

just Makes it. Got one me. sense. And then more Yes. for

military new then so through you're the can impact and I that these the the XX% military give if down helping more or after do just back so, color due from or I flying. so of of in then you the some all comes as know quarter contracts charter up? contracts lower tank of ramp Thanks you think that? guess, And contracts still much. demand still us Just to backfill just on us those have in do ‘XX impact capacity to on Will some are contract, left stronger? if what's flying those fulfilled. they the the new fourth So,

Grant Whitney

question, feel total the This XXXX, year, for of the in of Great winning Catherine. winning really business, new in terms successes again. portfolio selling this about XXXX. ourselves, back is business, team Yes, good Grant so the in we

this it's We in very of operationally it’s have really terms to - a friendly. what lot be, that's in of going precision because helpful times, and these

in doing, be So, flying will it a lot of to we'll pilot the bids. lineup have sights be it. good on going we're

in close the drive organization. or work drive to lot for a going not it's So, of changes

it important, So, in back business us. good And it good right. where that. we Getting about was those really for contracts feel where above because then really casino was are XXXX, of to our and really you're sort is absolutely

just other watch will that very And has and spare opportunistically deploying we some competitive, take can it have We makes they've to sense. been airlines been very, more military military. closely, as capacity when it military

tabs engage much things very on recovery, it us. makes do, As and on when the will will for close we military we based keep change the and sense business. We

and we to a portfolio we really begin with. have upside have yes, So, good

Catherine O'Brien

that. great. so for Okay, Thanks much

Operator

with you. up Stathoulopoulos I And Thank with have Susquehanna. a Chris follow

Your line is open.

Chris Stathoulopoulos

follow-up. my taking for Thanks

on the cargo. So, going to back question

the and few current be dots what in sick-outs could well but adding aircraft, peaks, like curious some the is here. air mentioned XX hubs believe fleet, just you it's issues, is So, or the to utilization, a as I sufficient handle erratic as looks IT Thanks. or what Amazon on of map context more growing

Jude Bricker

to You clear. said sick-outs. we I … have just be very Like want

Dave Davis

Legitimate COVID. I mean, people were …

Jude Bricker

(unintelligible). Right. COVID

Dave Davis

I know. don't

be - C-check line constant. now, a have that answer I and right a the mean, we're - we running think that'll won't - I

- for more mean, it's fourth and I expect the in kind my what is, we we of likely. view that's we going quarter a cargo in for until think aircraft. saw what production, get standard of think Amazon our kind production, would forward is I I relatively quarter

valuable continue have would have partner. that to capability that'll operations we be is And we intend or think any cargo really to to great Amazon other valuable. think a that I I

Jude Bricker

viable very, of -if I fleet competitors mean, are it's to want we’re ultimately, XXX, XXX aircraft, performance. we’re confident more very that to grow Amazon more, get up but our and those happy them. comfortable to the is with they And

Chris Stathoulopoulos

Thank you. Okay.

Operator

at comments. time. Thank Bricker showing over hand for I'm currently Mr. I'd back closing this the conference you. questions And like further to to Jude those any

Jude Bricker

Everybody, great your have for and quarter. day to we'll interest. talk Thanks, guys. a you next Thanks

Operator

Ladies conference. today's participation and for gentlemen, thank in your you

wonderful Everyone, now may disconnect. a have day. You

Sun Country Airlines (SNCY) 8 Feb 222021 Q4 Earnings call transcript