SNCY - Earnings call transcript Q4 2024 | Sun Country Airlines Holdings, Inc.

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Operator

Ladies and gentlemen, thank you for standing by. Welcome to the Sun Country Airlines Fourth Quarter and Full Year 2024 Earnings Call. My name is Michelle, and I will be your operator for today's call. [Operator Instructions] Please be advised that today's conference is being recorded. I will now turn the call over to Chris Allen, Director of Investor Relations. Mr. begin. may you Allen,

Chris Allen

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

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

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

release ir.suncountry.com. With Investor website Jude. on of our You over said, the that portion the full can find our press quarter Relations at fourth like to and call to I'd turn earnings year XXXX

Jude Bricker

Thanks, Chris. Good everyone. morning,

want address in Before results, financial a I we week last take accident to into get Washington, tragic to moment our D.C. the

are with this families affected by loved event. ones thoughts Our and the

Our highly competitive, OEMs the together industry. the are all airlines, make operations. will is regulators there be lessons possible be always surely will applied we've gathered, across to safest other we and with sure facts worked Once that deliver but the industry the

our We will the safety of the passengers and trust maintain standards highest in across continue earn public. to the our operations keep to

Due want industry able schedule of and reliably our fixed industry. due to we to be developments. structural the scheduled We profitability cycles. I both cost Our to diversified and to to of predictable model capacity to flexible predictability business most businesses, unique believe first to combination highlight allows few our leisure model shocks. industry-leading the a service all the able is demand will throughout advantages, The industry. fluctuations deliver us exogenous charter airline low deliver and the our in cargo flexibility we're in respond

the unions attendants of in principle our month, dispatchers. reached we with and flight both last First, agreements our

our the these to or deliver to I'm among delivery to vote in with by aircraft members. Also, we all is X will this excited all next cargo revenue yet month go double rules service. cargo work groups and first growing fleet to I by team our these expect year. agreement We took so. This enter we time work Amazon. latest to to expect able aircraft agreements of to improved rates summer, the respective aircraft from the be roughly cargo will But next XX. have

by be freighters, we XX% aircraft scheduled without grow the similar through positive. unit able industry, years, we'll of seeing still provide also our This service this the coming to lease go aircraft summer. to the inflect out block will or additional on the change rationalization XXXX revenues a These our XXXX. including about to acquisitions. In hours starting through fleet rest the own in that growth aircraft in service will that also the executed passenger XXX-XXX. first redelivery are aircraft redelivering off-lease capacity of into We to of the in We have are end and X we utilization

Our TRASM fourth was quarter. flat year-on-year for the

However, is which Capacity through scheduled X%, is. increase trends in we January selling remained the TRASM December, a service where almost schedule. positive saw

I well. strong, remains demand underlying revenues As expect perform to unit continue

operational XX% growth it I'll rate, of expect Of in with XXXX, to best the Our Dave. more continued hour model, are that, our at in cash block the same strengthening. And from XXXX, turn us increase, excellence our free and you near operational important over top healthy for at that levels frequency of note, completion customers. the industry. After or the low our staff high particularly balance of factor to margins bag should to are and continues a metrics deliver industry, the about mishandled strong sheet production, near

David Davis

revenue that million We're of for report pleased tenth QX of Sun consecutive total Both profitability. Jude. quarter on the to Country. and our $XXX.X XX.X% adjusted record were of was highest Thanks, operating margin

With basis, we've income since March every the of an the second quarter XXXX, quarter adjusted XXXX. IPO of on exception of in been net profitable our in

driven the was adjusted our of the the Additionally, margin consecutive revenues highest XXXX business was was operating and XXXX prevailed $X.XX. line the diversified overcapacity Sun results XX.X%. year fourth These the directly Total uniquely and revenue in scheduled demand. much adjusting $X.XX on resilience the in picture for cargo our margin quickly service was in year capacity full for EPS year active billion capacity we charter to X.X% full diluted of QX, profitability. of that through of and model. Industry were of was Country match year speak strong Adjusted to changed the record, segment. Operating by very

to first in still year growth hold of CASM X.X% of year service QX While we the for only the half the as half scheduled in scheduled X% less removal in on the scheduled scheduled growth X%. Despite flying, half in service than service ASMs significant the X.X% to to only year year. in grew the second TRASM revenues service Unit growth the we're of able XX%, on rebounded ASMs. adjusted down the trimmed was

of seeing of the specifics rationalize, stronger As 'XX. I'll we environment quarter. industry a QX pricing fourth to now the capacity turn continues to into are

improved segment, quarter TRASM up total last and our X.X% scheduled charter than quarter Fourth revenue and fare grew December Revenue scheduled businesses year-over-year. passenger during revenue X.X% our service year. to year-over-year. of First, service year-over-year the $XXX.XX. Scheduled was X.X% $XXX.X which million higher also grew includes Average with service for capacity. steadily X.X% to

expecting revenue to our we're block growth X% $XX flat charter X% roughly quarter to QX to 'XX QX of ASMs. Charter growth grew on fourth we and service be 'XX, with turn in X.X% million scheduled scheduled hours. the unit in service As focus revenues in

to of amount in a of reconciliation charter of revenue the prices our portion the specified caused fuel fuel reminder, a by longer-term As charter a is contracts. expense variance

we were received As fuel reconciliation. QX fuel tied to revenue XX%, less prices down

Excluding as increase it charter QX year. grew reconciliation, by charter was the last XX% over revenue in year. last saw approximately hoc XX% Ad we this also quarter versus revenue growth fuel significant

Excluding of the up QX 'XX block per say. I 'XX, should charter revenue QX -- of hour was fuel X.X% reconciliation, versus

XX.X% as $XX.X For rate X.X% extended grew cargo in hour our up revenue was all-time by growth million, which decrease a QX of portion XX%, cargo adjustments. a hours. quarterly rate cargo segment, to of QX was in changes the an annual driven despite as well Amazon in implicit revenue impact per the agreement block high. our This came by block

XXXX additional freighter aircraft to on the an X cargo expect to upward as year. continue anticipated take We flying inflect we throughout in sharply

One continue second XXXX. to of in receive Amazon and late escalate enter has half QX. we and rates will already the aircraft delivered, additional freighters will revised until we be as of contract to been not the in expect effect The it full service

expense Turning growth total operating grew on now total QX X.X% in costs. block hours. to X.X%

We X.X% remain to XXXX. continue XXXX the versus well year CASM disciplined increasing by demonstrated by full adjusted only as

versus full XXXX. XXXX, between with our our XX% operating expenses grow increase year expect are For and X% hours, we ex-fuel total which to year to block full expected in line

currently to and This high digits adjusted to will will anticipate As in the are lower increase mid- XXXX. of through in on and anticipating a will QX XXXX we happen CASM, we to single rest through QX. The growth put ASMs X% decline aircraft growth the most as scheduled between reminder, Amazon service occurring ASM which drive scheduled QX. X service productions decline expect of X% in with revenue XXXX, we reductions our full year pressure from additional in QX the

our Regarding sheet. balance

of year end liquidity was million. the total at the $XXX.X Our

X, on capacity. this million. XXXX or for need we February incremental finance until includes leases. we X At XXXX liquidity Full point, begin of do As $XX at not previously stood which total purchase looking $XXX.X million, CapEx aircraft of acquisition to XXXX the any year aircraft was

million million, this We expect with be and of $XX CapEx XXXX spare much engines. $XX between on spent to

aircraft. quarter, expected the significant raising our savings to is of XXXX million. a $XXX,XXX C-tranche used approximately drive appended our interest to five XXX-XXXER This $XX loan was This During down we term pay XXXX to existing the in expense. a financing portion new of EETC,

improve Xx. EBITDA and adjusted leverage we XXXX finish to a of debt to net Our ratio continues with

Additionally, aircraft lease and we revenues our had of XXXX, as XXXX. to May, expected the cargo of in X and continued November September focus another dates in We of These now X aircraft lease business. in us one the XXX-XXXER on service to we X are lease mid-'XX. carrier. expect we returned on enter currently provide extensions and revenue The our XXXX on XXX-XXXERs growth return November have XXXX to in extended to return us November this to

passenger the expect return 'XX. us, we XXX-XXXERs and to provide lease in the As service 'XX growth they'll

guidance. to now me Let turn

to be growth total $X.XX, X% our quarter achieve XX%. margin us $XXX block We're between million and on an be first to expect We to and revenue X%. to million and cost operating fuel between anticipating for hour $XXX XX% per gallon of

Our for resiliency segments business and for to capacity allocate up maximize earnings volatility. With continue open that, we'll we'll and minimize to is between profitability questions. built it

Operator

our come with Shanker will question Stanley. And Morgan Instructions] first [Operator Ravi from

Ravi Shanker

in important about destinations A some that feeder? other strength Does Europe How help been by unusual and probably to airline the redirect in potentially it There's first such. kind domestic kind couple does going given from how here you on calls impact to with quarter, XQ driven is Just guys? for just to winter just guys? just FX obviously, you Europe? it of of Does some off. commentary away traffic kick

Jude Bricker

the Yes. we there. To start with don't fly obvious,

that us. the out We're certainly reallocation there's those but think the that I is of the there's it So secondary doesn't market well into shift market. affects the demand markets a transatlantic that a in selling positively capacity Mexican-Caribbean into destination, really of transatlantic effect appear in

So see I mean U.S. I everywhere would think to for strength positive. whole, it's we airlines. like a on the

So downside there. there's no risk

Ravi Shanker

there. here, moving of And to yes, That's help the referring as please? was for the I indirect But of, frame thanks trajectory through it. kind Dave, helpful. the maybe a the and margin guidance really just you Got And us, specific follow-up, parts CASM year, impact. given can the evolution

David Davis

the I know the you profile seasonal Yes. of think I company. mean,

we to gave strong. expect be First quarter, really We guidance.

sort think confident in, very in I of come we're guidance. revenues as that

of follow how out going is driven to pattern. A plays dates Amazon typical the exact cargo delivery of we'll lot of be year the by think aircraft. I sort a the seasonal

the I service in start from and in abnormal service profitability don't into to the be should perspective fourth them quarter. expect see by company. late throughout then They summer March a enter the seasonal year. We anything for all But

Jude Bricker

and year, of network, affected the things the the and negatively last were primarily encroachment that thing quarter we were second One competitive dealing with note most. that would third into be our

as tailwind As guidance you that headwind April. in a best not into variance All quarter. we've ever strongest quarter, opposed we into did the capacity second is a else quarter. the could second see well, with to And equal, quite quarter, in the the shift fourth the in the we're is giving where done fourth combined the now Easter

The has the comps. upside to second quarter prior relative most year

David Davis

probably the year. the for Yes. in to Ravi, And in in capacity anticipate reduction Right from around to and now, you QX rebound a QX. scheduled be then biggest XX% drawdown perspective, capacity QX looking starting being service can it's

Operator

And Evercore. question with the next will Pfennigwerth Duane come from

Duane Pfennigwerth

speak changes? extending? you the bookings maybe booking provide Or just something be could quarter. ATL. Any curve break? And seasonal build fourth in nice you on a could looked that Maybe there great. it It the is would in color like patterns there spring your is was Is to around

Jude Bricker

look want just look seasonality. sequential I year-on-year we have we not strong a doing that at basis, Well, to I'm you're because it make a at such ATL, that. sure when on we so should assuming

Duane Pfennigwerth

Sorry.

for It that much the move We guess is us. has are, to last years. looks sequential been than stronger few I but like it

Jude Bricker

Yes.

were in So of ATLs. bigger first we things. year, couple than the that quarter a the prior We in affects were

mentioned, TRASM we we got As tailwind. some

our that just on changes booking further own is we're One capacity holding of out. the inflicting ourselves

So we're our in seeing variability less pricing.

in on. because we our As a larger bookings we demand close midrange, factor such EU building days, then get these else? markets. sells, in And we're close Anything see so in particular as load in, the flight particularly strong less moves early it

David Davis

Okay.

Jude Bricker

Yes.

say a answer, load generally, that's the of output factors. but higher So I'd and slightly is fares complicated lower that

Duane Pfennigwerth

on, expansion, the on? it. relatedly, guess, the then maybe the remind just that you're improvement you us And taking of, changed? you how that may rolls I Got can that extent cargo the of business just aircraft have And to on cadence as cadence rate the of the that can

David Davis

Yes.

I think guidance really giving there's significant as from we sit no a been for the now, we've while. change

in And looks in -- late service first in March. all by like The aircraft going it's to now probably should be late QX. to be they then mid- March service

Jude Bricker

Yes, by the end of August.

David Davis

August. Yes. of End

our is rate X the we've of escalations the additional what in fast. the talking been similar the escalations, before. So to is really about basically rate delivery rate And of

Operator

the And will next Oglenski Barclays. Brandon from with come question

Brandon Oglenski

guys priorities flip mind as that some about Jude into softer or margin especially help quarters pilot those you you months, for profile shape get the network actually, talking you should better into summer a And capacity Dave, do as the cargo you guys? in business?

Jude Bricker

Yes, I'll take one. that

in mean of simple. the same-store there's the we markets that be to the had margin -- had are last incursion. going a stuff that's summer, last suspended some be particular, of to was that carving, -- competitive summer yield. will be to we of going is in from pretty to some repel cuts I it's on So particularly Many low in cut markets schedule. then lot and combination going reductions put that those capacity be And going the be a to

So And forecasting write to we're from based those our a fares perspective. expect capacity pretty be in strong OA moves and productions. network some general demand. revenue yes, planning Yes, strong substantially capacity on then pretty across a a reduction higher underlying easy we to capacity schedule it's and

Brandon Oglenski

as Appreciate thinking out think beginning it be remain that, next And you about but we I of far it's the well? should capacity XXXX, at down into going then Jude. as year scheduled know there,

David Davis

to close end probably say, mid-'XX, of think I let's should by we to the the be were, first we quarter pretty back 'XX. of at where

into shrink rebound the QX, quarter QX, start to and in shrink then 'XX. of grow words, other first in So QX

sometime between we and and of then So growing should sort back again. middle the 'XX, of be there

Operator

Catherine And come from will our next Sachs. Goldman question O'Brien with

Catherine O'Brien

details, environment Midpoint further Obviously, continues XXX smaller first decline. on quarter operating Amazon. implies is your guide tailwind year-over-year. up one sounded outlook the some that Just point I just the but on here. to year-over-year. margin of you've points given improve, the margin capacity fourth over XXX know just already But basis quarter fuel basis the upside

the margin or industry there comparison, Any year-over-year deals flight versus XQ, would around helpful. be fuel maybe attendant conservatism really On XQ that in uplift? year-over-year Perhaps there? just new is the color some

David Davis

Yes.

this new the bit would for 'XX, attendant quarter. first the increase generally, the range So I little of 'XX. as quarter in around deal was of first of we're all, least pay probably at the looks Everything XXXX. significant confident see is to not Probably, say, I part we're strong than quarter much as point. There of in the first the we think guidance. there We put going more speaking in at in more flight pilot a just good number. a say but that, very

Catherine O'Brien

you you decade? just lease need aircraft to your find Got to out And rough rest the aircraft? on then opportunistic growth decade? the have it. you'll later the aircraft do pricing, able aircraft of maybe to find of still volume think frame strong us already And a you purchases get you that through do Can confident secondary be able plan feel help for growth just many how through past this Understood. ones numbers, like you you'd being

David Davis

other there X those and The on ones and X aircraft a are that answer are the is then have XXX-XXXs, into There's pieces the 'XX, XXX-XXXs. couple to we provide of 'XX. Oman, And 'XX lease, yes. are X pieces those redelivery growth with lease on of that aircraft the out that

well. fleet. in that the then utilization X And on to We range-ish. there's into the there's back upside come hours those So think think front. still the we room We're as

market, right growth in We'll probably of there's to continue 'XX with that and expensive on get gets opportunistically. we'll the us end be very now, there's think us aircraft XX% that likely. in now. to buy into are to just have But in and enough little right the Used growth metal most activity So XX% the we airline market the significant left the decade. the through we

Jude Bricker

on dependent they're right not good now. Whitney, comments. a executing Pratt of to more or way CFM Just the It's Boeing, couple be & Airbus,

plan rather reliable And anybody have fleet than very I'd sort have we So else's. aircraft. a our also, of then

the with deal other to equipment. of having not any technology issues we're out-of-service the dealing associated airlines that are like new with with So

provide aircraft where are So are feel on these already about going mean, good we side. just fleet that we to I own growth. that mentioned really I Dave the

Operator

Bank. And the Linenberg will Deutsche next Michael question with come from

Michael Linenberg

couple we skimming. Jude, additional some are I And markets guess into just are as early your probably spring, about a there here. you summer, encroachment those come talked capacity. capacity who in, you back I that guys it, see scale do some of meaningfully by seeing call pretty

for it guess to I that. establish does so on open back, of is, and you as thoughts sort opportunities up the scale others maybe share, And question

Jude Bricker

let take Mike, capacity. a how opportunity bit about talk me we little to think about this better

impossible that by so entirely capacity track don't make inputs. It's can and fly to and have of times when where fixed based get And on run schedule about flying So the a is which cargo fill want then an I the and and be which we either it. can certain just we to fundamentally different many we that low what say basically every right think the what's airline to in Country plane time, the planes. of we now. brings park do in at out case, airplanes market that any things other moment run is we way tweak to we that's to repeat out we thing serviced many, think then would day to of kind and a be where And innovation our Sun that best decisions. or obligations until we our out optimized are do contractual And probably it independent build day generally can we is

for ours the even can of like daily else carrier it going anybody and to fly -- pulling that to support look back summer demand that for the a but be don't at work at because example, twice-weekly to pattern. But be about service Day those with markets supported between carrier for fares. if we're leisure there's going Memorial you're going talking out, when not leisure empty be it's by the Minneapolis, work a a we We're at if like we're in sufficient them. XXX us, So Day, X clock, Cleveland, markets, Labor to

opportunities all other the for And that not -- about some happen lose any at just I'm backfill might I so sleep don't of airlines.

are We call strategically these JetBlue out Minneapolis, I'd I really, markets. down footprint like keeping leaving our what consider, important would in Boston.

go If time used healthy of we to daily that X in market market. We're you way in the summertime. to XXXX, in of level back up serve keep going to that capacity a

So for sustain markets year. to capacity only to are that be back the us for to I that on any work then and from think going that the be pulling will significant summer of service us going kind continue markets can level get really we're markets next

Michael Linenberg

minimums, going downside flies if risk just XX% get full talk so hours you're you is or with and Great. with impact going going to from secondary about Very or tariff second, realize helpful. just there's to effects the block Can and and it's about freight, plane knock-on protection? headlines and maybe your whether the Amazon and have second all contract, compensated. on full, plane the my or more it's around And the I do overall get you're whether all tariffs to then in effects, order just you you're revenues in and commerce cargo, cargo XX%

David Davis

Yes.

there's one way and way the we a there's block set no rate way hour -- this are -- have speaking contract rate per maybe before then aircraft to of on constructed the which fixed sort broadly is given is that there about but top -- So especially that. tariffs, is The of minimums, the customer. contract assess, a difficult

de of sort as get each minimum paid aircraft. for operates it facto because So we a

Jude Bricker

the into of so out, And the you we pilot Generally same. the the full, a full mentioned any that cargo that I doesn't fly of on other utilization then the high-margin rates secondary are speaking, of us. fuel load margins profitability could of the It's the empty to on airplane, doesn't the fleet, pass-through economics better that and the the for redeploy effects more airplane lower stuff, we flying. us capacity because the calendar market or impact cargo call most it for want are matter can

Operator

next will Wolfe our with And question Group Scott Research. from come

Scott Group

this flat. Is X%, I said right? unit just you -- if one for I'm I but -- quarter, revenue point, tracking Did that but at understand just heard I hear that. right, think up to I revenue wanted not service scheduled sure was January that the you're I assuming unit

Jude Bricker

Yes.

So December doing what about is did. January

but closed January year. like February We going is the this it looks yet, softer be lines, a haven't along to month

and of March the is line. about kind wash in So -- is

we're that's quarterly of at. roughly kind where So basis, a On flat.

Scott Group

weaker a March January? strong the February driving to What's and flattish relative

Jude Bricker

So we a -- flat the or is think, a February, I unit pretty X% has In X% with talk March there's the March X% ASM weakness? revenue with about should shift, Easter growth, good result.

Grant Whitney

moving we it's the sort into on year just capacity of -- And of some as we into holidays. meeting that some Caribbean, it Milwaukee year-over-year about but time growth early April think that frame. strategic into concentrated which really was comp good some expectations, so I have there's of well. feel out the Last with

Jude Bricker

softer our more core the markets little just are yes, color But Caribbean than bit be is a year. say, strong. previous I'd would really

you So that for markets trunk those see, wrap it, would the us. are call

of Fort and Orlando, Vegas, February those twice are a kind off. Phoenix, deep So network weighted week those into are in heavily or is become the these a early Cancun really March, And where good. more once all of markets Caribbean Myers, little a portion

Scott Group

announced Okay. their week, XX% last with UPS in cut volume Amazon. a -- With

this what what doing than Amazon is So to involved an different for for is you? else. -- you're pretty the UPS has Amazon somewhere maybe is got Is this opportunity look Or with.

or is don't So an opportunity this risk? know, I

David Davis

Yes.

way. I -- a risk it don't as any think I in see

and Here's Amazon XX narrow-bodies we're sort The of operates the going to issue. them. have

if to there's short-term as a what's on UPS. opportunity going to or probably advantage out, Jude a at get different grow that not paid fleet it doesn't on hour So of And per pointed take narrow-body are unless sort matter fleet, go type the basis. of we full, aircraft more we a they block

term, the over we The Amazon are love great. the long business. margins Now

So us. we a stuff UPS is potential growth don't there's probably ahead. I think near-term the more think But near-term for

Jude Bricker

and growth keep that of Amazon expect. is faster can kind The the we also performance we operation coming the than grow

So we able be it. and before want We way, scheduled to growth this if allocate a then cargo this we we our have absorb how to least. more XX then talk could growth we do and service couple after expansion growth, years, it for that's growth, about our into pause on of at cargo airplane

Scott Group

just then if can. I lastly, And

free I think flow? other year. you are $XX how thinking of puts Any this said what for million, million now? are the -- you And and right about $XX takes buyback the CapEx cash

David Davis

Yes.

And of is of We'll the sort decisions. come debt sort back your flow in CapEx it. at is of we number So right numbers -- in, but as we're table how a paying are continue fair now, not our amount make it. looks the be and buyback buyback right. kind XXXX. to now, cash be yes, And looking of see assessing But we we strong we'll we'll a that always on announcing

Operator

question Tom from TD Fitzgerald Cowen. next And with comes the

Thomas Fitzgerald

you hear scheduled XXXX? said growth were -- hour and that charter that breaking XX% would between I that And out Did you cargo? right just through that block mind you

Jude Bricker

is into in-service that will operation. all after the fleet Well, we of simple fleet applied the utilization committed have that's just XXXX redelivered arithmetic to the saying

David Davis

Yes.

is growth. definition, by passenger that, So

Grant Whitney

Yes.

David Davis

Yes.

aircraft as -- just the said, Jude basically is utilization. redelivery XX% then the improved and So leased the of

Thomas Fitzgerald

to you dry to airlines talked powder And really some -- of That's just opportunistically. thinking invest know then like Wanted Okay. longer that about are with term, the about August, volatility how I helpful. your you other are facing. keep in

Just cities how like Minneapolis? about another are something addition term to -- adding else other in focus you thinking and longer or adding

Jude Bricker

we do Well, Sun we're type into support that investments in. can operations. it. time, over to I'd we We're think Country making the say putting markets want

So Midwest of origination Milwaukee. the we've service expanded Upper with out into

Dallas service out support of our Texas. to Mexican-Caribbean continue and We summer Central

those going at I of of are But the 'XX. So getting end of years, decade. kind going quite what markets into able be network expand that it's it think to was the the be to X frankly, we're kind the in next the back to to

David Davis

Yes.

of aircraft of I I cargo, the will full bit well. new look focus then 'XX, cargo So be 'XX some airline a hitting the effect as then And think 'XX, just And of mean, Minneapolis growth these in term, sort right? longer year is could cities. little of are and the then you all probably 'XX other these basically refilling

As next of different Grant to a we programmed years. but strategic can in we all with that's full -- model the of over got on table. lot this it's couple our But move to the we one, definitely we decade, growth think take now, of hands cities. later we're our mentioned where doing some the sort of growth here

Jude Bricker

difficult where in all going from end because of it's their also are those they and kind Spirit the would where the shakes pull predict think opportunities that be restructuring. out, to to point up down how I be of

some their doing So their network pretty -- and then Southwest changes is adjusting growth. down and dramatic to

opportunity few years a may we now an as be not today. what we what think I see see from So

main be think -- to a happens, capacity growth different so our And of I be And available to be the about is when years. our going point Minneapolis network. it's X capacity probably is for to isn't going outside that going

Operator

Kirby next And question our comes with JPMorgan. from James

James Kirby

the in fourth been quarter. remarks I the should questions that? that to I ad growth think Was kind year? you down been or prepared for efficiency the better segment, going have guess the of segment kind scheduled in with Maybe we just service charter just charter has of of Most guess, on that of mentioned drove hoc my forward, what the be the expect demand? And asked. I proportionately cadence

David Davis

Yes.

quarter on program significant. fourth percentage So our flying, ad on was And growth in of XX% a the charter plus the is in remember, most the basis hoc side.

cargo see scheduled year So the that And that off really But the did to that ad quarter football -- not lot we is is growth hoc in percentage flat growth charter a a digits continuing fourth that flying have kind the growth. sorry, of of low be we a of low up on of that The relatively to into maybe sort drove the business, number. the going XXXX. down business, single order into service base.

James Kirby

helpful. no was in years, And incorrect? MLS the XXXX? X Got it. I that next there's think Or roll-offs believe, significant I contract right? is That's

Grant Whitney

Yes. We them with did year. this work

just So then I feel add that into the good just I contract what said. fourth the future. for really quarter, we about would would And say to Dave

good power just scheduled it's with the our communicate And proactive looking our we be brought we when ability are model that think the that. of had service them. very of And we well ad we for have charter win business. hoc We when illustration availability, more to customers really a basis. I on the down,

would for just medium to But about really good I doing customers. feel our we say term. So our yes, term We're a good delivering very in job short that. partnerships of the

Operator

[Operator Instructions] And from Christopher our next question will with come Stathoulopoulos Susquehanna.

Christopher Stathoulopoulos

go want the I to business. to Amazon back

the August, -- you'll then in full the place. March have So late and fleet dates full to mid

economics I to here. go the So want back to

is hour as hours? how then covers over commitment a will more is of block things much So going rate ad utilization the block aircraft, nuances given ] hour that -- of all the EVG commitments do point-to-point? to hoc out network fixed a and the it more concentrated or are understand between fixed here Just block piece into like month of [ which of rate then And that you looks insurance per then ultimately and the kind is flying And week, how and top have that schedules on rate that, time? shape be visibility to there's which want and a and I'm advance? in guessing sort So per agnostic.

Jude Bricker

is do DNA know. planes that's our expect Country go I I of roughly comment is where can't development we They they And the and because the inputs. optimize a can on charter approved and on But want. brings to a come in X-month really it to fly try really we airplane gets based that Scheduled times where the they that Sun anything we their with it's sort really. value don't schedule for schedule work utilization X ultimately, year. network together the to

are a and of through So your else basis. are that and associated the that the margin rate includes costs on then a variable about with comments everything passed structure -- but accurate component fee there's fixed in operation the sort

it doesn't network much from like. matter perspective, so the looks what So our

Christopher Stathoulopoulos

Okay.

So Chris... heard I

Jude Bricker

is prop. Go Crux ahead. your

Christopher Stathoulopoulos

Yes.

approval prop, this point? So at what X-month March through visibility so into might spring you like have flying look and

Jude Bricker

That's Yes. Yes. right.

airplane, Now messy be the airplane that to get take we'll certificate, then certificate the dates delivery, the this the on work just then the because is so the it. get we on some do schedule going and period to we a

bit so integrate going of be to the And and and little there's about schedule aircraft. these the noise as we a count the fleet utilization

Christopher Stathoulopoulos

domestic you second of from if single-digit half that my about sort heard doing versus understand as the But peers. that perhaps better pockets low seat question, your or their we that? or so as are look U.S. to what and worse supply-demand growth map to your favorable of wanted a here Just top worse on spoke first the as or We've looks a there point areas for at we of think whole? are the system like demand that Okay. better kind a of And a of balance or in regions X network, domestic least at than doing are

Jude Bricker

I routes. down impact of this West really lot were our into side, Florida. seeing, mentioned there. as say a seats. I'd trunk demand On really we're earlier, of a leisure uncertain going got we've strong are from They've that storms the things into period the And scheduled ton had

the on markets doing on. but know, as I Caribbean, well. the a just markets mentioned Mexican really, point That of... little Southern it's California all then well. Coast, off say X and I uncertainty, was really bit. I'd sort are have stuff a doing West earlier, really don't is geopolitical going And they're the with We of

Grant Whitney

the the The think there. Caribbean, spring I traditional a pressure growth in exceptionally because it's look for good just really you rationalization. break the it's routes mentioned, as it. strategic we've but opportunity well we've done Caribbean, nailed us, capacity year-over-year, there's And

really single some -- to adjustment. These We've we've are markets. So a these week. added significant some weekly That's twice strong were capacity markets. added a

markets of these we've responding and But that, some we was have to to for seen what that, always competitors impact going some long be too. -- added. there run in So continue be customers will to the are be the and

Jude Bricker

a When in level It's high Grant, going should the high good profitability. a such I year. level achieve Yes. to of prior clarify. the it's in It's year-over-year weak, from it's it's because really point, some schedule I say decline, a TRASM but

Grant Whitney

Yes.

Operator

to questions to would queue remarks. Bricker for I at now turn call further in like closing this I the over back the show Jude time. no

Jude Bricker

appreciate in, calling really for Thanks everybody. it. We

share I a great think we excited a story, everybody. Have guys. you day, we're great have with to and

Operator

conference participating. you concludes This for call. today's Thank

You may now disconnect.

Sun Country Airlines (SNCY) 4 Feb 252024 Q4 Earnings call transcript