Read More: Air Canada is ripping seats out of aircraft across its fleet to turn them into cargo planes. If they were going to other 737 operators like Alaska and Southwest that were really large, they wouldn't be able to give the kind of attention that we give them. This helps keep crew training costs down, as well. I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours. Our Story, Eric is the Supply Chain and Air Cargo Editor at FreightWaves. Lufthansa has a similar model. Revenues rose by 78% year-over-year driven by higher passenger volumes and mostly focused toward growth in the scheduled services segment. Sun Country Airlines was profitable during the first quarter. We are committed to helping the company continue growing and achieving its objectives through this modern contract, which will ensure the airline is able to retain and attract pilots.. So, there's a strong uptick in demand for air travel but it's not going to be translating to the bottom line at all. Air freight is really concentrated. The pilots that it allocates for domestic services are also able to fly the cargo jets. Reconstructed Boeing 747: The Crash Of TWA Flight 800, Hyderabad Bound IndiGo Flight Diverted To Pakistans Jinnah Airport Amid Technical Defect, SAS & Pilots Union Show Signs Of Imminent Agreement, Then There Were 15: Inside The Last Remaining Airline Airbus A318s, United Airlines Reports First Quarterly Profit Since 2019, 33 Daily Flights In Its Heyday: Inside The Doha-Dubai Route, What United's Fleet Could Look Like In 10 Years, Interesting: Ethiopian Airlines Is The Largest Operator Between Africa & Asia, Trip Report: American Airlines Airbus A321T Business Class New York JFK to San Francisco, Malaysia Airlines Unveils Its New Boeing 737-800 Cabin, Nearly 350 Narrowbodies: The Alaska Airlines Fleet In 2022, The Story Of Short-Lived Canadian Carrier Greyhound Air. See inside the new Boeing 777 and Dash 8-400 temporary conversions. See inside the new Boeing 777 and Dash 8-400 temporary conversions. Bricker told Business Insider just how the decision is helping Sun Country, one of the smallest of America's major airlines, survive the pandemic. I do much more than just articles at The Aerospace Forum: Members get access to model portfolios, regular updates, a chat room, and more. A Growing Fleet: Where Is Delta Flying Its Airbus A220s? The increase in operating revenues was supported by a 36% uptick in base fares. Please disable your ad-blocker and refresh. 
Source: FlightAware and Planespotters.net, Read More: Why an airline CEO thinks Hawaii is poised for a major tourism boom after the pandemic, but his won't be part of it, Read More: Big airlines are flying 'ghost planes' stuffed with packages now that the demand for passenger flights has cratered, Read More: Inside the massive effort by US airlines to transport medical supplies and mail on cargo-only flights using passenger jets. The transition to low-cost spearheaded by the former Allegiant Air executive was intended to be the company's way forward after being purchased by Apollo Global Management. The element is not completely true but there still are long-term contracts (six years with two two-year extension options) in place which insulate the company somewhat. The partnership was announced in December, just a month before the novel coronavirus was widely known. 
Additionally, last year there was payroll support that reduced the cost load by $26.9 million. The Amazon business was a key factor in Sun Countrys ability to keep from furloughing pilots during the COVID-19 pandemic when most airlines cut staff. it was a good marriage. You can view aviation and aerospace job vacancies. So, over time the airline is turning cash items into non-cash items. , Sun Country Airlines Cargo Sales Managers Phone number / Address / Email. now, Amazon. He has won two regional Gold Medals from the American Society of Business Publication Editors for government coverage and news analysis, and was voted best for feature writing and commentary in the Trade/Newsletter category by the D.C. Chapter of the Society of Professional Journalists. British Midland International (bmi regional), COVID19 Country-wise Air Travel procedures, Sun Country Airlines phone number, address. Sun Country can keep costs down on the Amazon deal because it is already familiar with the jet. Once your resume has been uploaded, you will be able to click the checkbox above to attach the resume to the message. Fares should be at record highs and many airlines are expecting that regardless of the fuel price environment margins will be strong but Sun Country Airlines has guided for a disappointing quarter ahead in my view. Deputy Content Manager & Lead US Journalist - Jays extensive travels and experience with premium products has given him incredible insight into the wider landscape of commercial aviation. You can, The Most Recommended Aviation Job Website. During the previous earnings season, airlines were rather upbeat on their performance in the second quarter. That in part might be caused by the fact that the airline already was profitable in previous quarters, but also because the company is transitioning its cost structure where pilots are paid more and aircraft are being owned or brought under financial lease. Stay informed:Sign upfor ourdailyandweeklyaviation news digests. As associate editor at American Shipper Magazine for more than a decade, he wrote about trade, freight transportation and supply chains. Is this happening to you frequently? This will lead to margins of 5% to 9% which is a reduction from the 10% margin in Q2 2019 and Q1 2022. Indeed, if you dont have the staff to fly the aircraft there isnt much you can do and flying at a loss doesnt sound attractive at all. 
During the quarter aircraft rents decreased by 43%, this is driven by Sun Country Airlines transitioning from operating leases where the aircraft should be returned to the lessor by the end of the lease to financial leases where the aircraft is the airlines property by the end of the lease term. Plus, for Amazon, the partnership allows it to continue on its rapid cargo growth. The company has increased pilot pay, which should help in the process of hiring but I feel that with decreases to charter flying which provides a part of the business where the high fuel prices can simply be passed through, the company is making the most out of its available staff but not the most out of the nature of the pass-through businesses. The past few years have seen the former full-service Minnesota leisure airline transform into a nationwide low-cost carrier, expanding as far as Hawaii while completely restructuring the customer experience. The airline has a lot of potential, but also depends on scaling up operations to unlock further scale benefits because the current demand-and-cost environment is not what's going to unlock that potential. So, Sun Country Airlines did something to become more attractive to pilots but I feel it did not outline how they get from hiring to training to having proficient workers. What's more worrying is that Sun Country Airlines says it will cherry pick and fly into the high-yield markets amidst crew shortages and the current pricing environment. Additionally, I find the Q2 2022 guidance disappointing. Sun Country Airlines was an ultra-low-cost carrier that flew under most radars as it pushed through a transition from full service to ultra-low-cost. My main concern with Sun Country Airlines is that it's operating 30% more block hours compared to the same quarter in 2019 and for the second quarter its expecting revenues up 24% to 30%. Instead, it prefers to work with other carriers to fly the cargo jets on their behalf to support their network. The passenger and cargo worlds are also very different. An award-winning business journalist with extensive experience covering the logistics sector, Eric spent nearly two years as the Washington, D.C., correspondent for Automotive News, where he focused on regulatory and policy issues surrounding autonomous vehicles, mobility, fuel economy and safety. I wrote this article myself, and it expresses my own opinions. Based in Washington DC, United States. I am not receiving compensation for it (other than from Seeking Alpha). For example, Cathay Pacific flies passengers under its main brand and cargo under the Cathay Pacific Cargo brand. Paul (MSP) Base, Minnesota, Management - Director of Quality Assurance, Maintenance - Technical Services Reliability Analyst, Search all aviation and aerospace jobs by clicking, Unlike other web sites, JSfirm's service is free for job seekers. The latter two provide some stability as they are partially insulated from economic shocks with long-term contracts, recurring set of customers regardless of economic downturn and fuel costs are passed through to customers. For a company that has been doing 10% adjusted margins this quarter that's disappointing. Air Canada is ripping seats out of aircraft across its fleet to turn them into cargo planes. Please find my resume and contact information attached. Second quarter outlook looks somewhat weak despite high demand. I look forward to speaking with you. as well as other partner offers and accept our, Stephen Brashear / Stringer / Getty Images, Visit Business Insider's homepage for more stories, Why an airline CEO thinks Hawaii is poised for a major tourism boom after the pandemic, but his won't be part of it, Big airlines are flying 'ghost planes' stuffed with packages now that the demand for passenger flights has cratered, Inside the massive effort by US airlines to transport medical supplies and mail on cargo-only flights using passenger jets. Please. What I'm liking about Sun Country Airlines is the combination of scheduled services, cargo and charter flights. "[Amazon] had airplanes, and so they needed the support of a carrier that could ramp-up really rapidly and support the kind of growth profile that they had. Excluding cargo services, revenues were still up $9 million. I have no business relationship with any company whose stock is mentioned in this article. Pilots for Amazon transport provider Sun Country Airlines have easily ratified a new four-year contract, the union representing them said Tuesday. However, one deal that boosted the airline's profile was one to fly Boeing 737-800 cargo aircraft for Amazon in 2019. India's Star Air To Lease 2 Embraer E175s From Nordic Aviation Capital, The Amazon Sun Country Partnership: Why It Works, pushed through a transition from full service to ultra-low-cost, cargo airlines usually will fly older aircraft, partnership allows it to continue on its rapid cargo growth, Avelo Airlines Partners With Alliance Aviation To Support Pilot Recruitment Drive, June Was Exceptional For Singapore Airlines And Scoot. You may upload one to your account now. Sun Country is a good partner for Amazon. Select a resume file type (.PDF, .DOC, .DOCX, or .txt), Minneapolis/St. He can be reached for comments and tips at ekulisch@freightwaves.com, The only thing missing in your inbox is FreightWaves. So. Amazon started its own air cargo operations in 2016 as its business expanded with the introduction of Amazon Prime. The big question is whether the demand environment remains as robust as seen today and whether Sun Country Airlines can grow its fleet and staff to turn growth into profits. Instead, it relies on subcontractors like Atlas Air, Southern Air, and now, Sun Country Air. Earlier this year, Kalitta reached a pilot agreement after one year of negotiations. Cargo airlines generally fly fewer segments per day, while passenger airlines try to fly their planes as much as possible. I have no business relationship with any company whose stock is mentioned in this article. The quick resolution of talks is certain to please Amazon, which abhors uncertainty and the possibility of unhappy pilots creating operational inefficiencies by working minimum hours or calling in sick. Part of that was driven by a 25% increase in block hours, but the surge in fuel prices also plays a big role. Sun Country Airlines Q1 2022 results (Sun Country Airlines ). Obviously for the cargo business, an economic downturn leads to lower demand for e-commerce shipping but Sun Country Airlines is well protected with long-term contracts. Flight Review: Lufthansa Business Class - Airbus A350 - San Francisco (SFO) to Munich (MUC), The Most Notable New Airline Routes This Week. Even among airlines that operate both cargo and passenger brands, the cargo operation is generally smaller than the passenger operation in the fleet count. On top-line, fares are going to be up supported by ancillary revenue that should tick up from $49 to $60 over the longer term. Brian Lethert, chairman of ALPAs Sun Country Master Executive Council. So you can either be a charter operator in that space and subject to the whims of those customers, or you can partner with somebody, and that's what we did.". His expertise is also leveraged in Luchtvaartnieuws Magazine, the biggest aviation magazine in the Benelux. We were a sizable operation, but not too big to where we we could give them the kind of service that they required. Jude Bricker took over as chief executive at Sun Country Airlines in 2017 and during his tenure, he's overseen some monumental shifts at the airline. My main concern with airlines has always been that even if the prospects are good, there's always something keeping prices down and while I have been criticized for that view it seems that with rising recession fears and inflation things dont look good for airline stocks even when they are currently executing well. A rough calculation shows that around $26 million of the $40.27 million increase in aircraft fuel costs is related to higher jet fuel prices. I want to congratulate both bargaining teams for having the dedication to reach an agreement in record time.. The Amazon aircraft are mostly Boeing 767s. It provides our highly skilled pilot group with competitive wages and benefits and enables Sun Countrys significant future growth plans, said Bricker. It's actually a very concentrated industry with UPS, US Postal Service, FedEx. Cited by TIME and Intelligent Aerospace, among others, and interviewed by major outlet NPR, Jays focus on route planning and fleet developments allow him to dig deeper into the stories behind the headlines. Sun Country Airlines guidance (Sun Country Airlines). However, I do not see prioritizing flying in some segments as a sustainable solution to the pilot supply problem. To ensure this doesnt happen in the future, please enable Javascript and cookies in your browser. Excluding payroll support, Sun Country Airlines would see profits improve by $23.8 million, which is around 10% when expressed as a percentage of revenues. I wrote this article myself, and it expresses my own opinions. I like the scheduled service-cargo-charter set up that Sun Country Airlines has and I believe that it allows the company to deploy assets based on demand and provides some stability due to the different nature of each of the segments. So crew shortages are in some way not allowing the airline to optimally benefit from the parts of the business that are insulated from the jet fuel price environment and that is disappointing. It is responsive to Amazon's concerns, has experience flying Boeing 737s, and has a reputation for successfully flying older aircraft. According to the Air Line Pilots Association, 93% of the eligible pilots participating voted to ratify the agreement, which brings their pay rates, retirement contributions, commuter policies and work rules in line with those of industry peers. * You currently have no resume uploaded on file. This agreement represents a milestone for both Sun Country and our pilots. Year-over-three comparisons, which are used to quantify the recovery to pre-pandemic levels are a bit less effective for Sun Country Airlines as the airline added cargo services to its portfolio but total revenue per available seat mile was down 1% on lower fares. During the third quarter of 2021, cargo revenue was $24 million, a 10% increase versus the second quarter and 71% higher than the same period in 2020. Sun Country Airlines did increase pilot pay and that's pressuring margins now, but over the longer term will attract pilots and also improve margins on escalated contracts when the pricing of contracts outpace the pilot pay rate increase. Which Aircraft Types Did Indian Airlines Fly? Eric is based in Portland, Oregon. If you wish to include a resume with this message. Amazon does have its own fleet of aircraft, but it is not an airline. For the second quarter, the hybrid carrier expects fuel prices of $3.50 per gallon but the IATA monitor shows fuel prices in North America of $4.20 per gallon which is down from the prior month. In the first quarter, charter block hours were down 14.3% as Sun Country Airlines prioritized scheduled services due to crew shortages. His reports have been cited by CNBC, the Puget Sound Business Journal, the Wichita Business Journal and National Public Radio. Click here for more FreightWaves/American Shipper stories by Eric Kulisch. So, we did see significant improvement on an adjusted basis and we see that Sun Country Airlines was profitable in Q1 last year as well as this year. Subscribe Now, Download the FreightWaves app for unlimited access to news and insights (Android & iOS Available), Copyright 2022, All Rights Reserved, FreightWaves, Inc, Pilots ratify 4-year labor deal at Amazon cargo carrier Sun Country, Whittling away: Indicted Nikola founder dumps 7M more shares, Breakthroughs and misconceptions: 9 questions with ChargePoints Rich Mohr, Cold one: Manhattan Beer Distributors all in on electrifying beverage trucks, Struggling battery startup Romeo Power taps veteran executive for CEO. Sun Country Airlines Holdings, Inc. (SNCY). Plus, cargo airlines usually will fly older aircraft. Disgruntled pilots blast 5-year contract with Atlas Air, Kalitta Air pilots ratify 4-year contract, Serving the global freight industry with the fastest and most comprehensive news insights and market data on the planet. The union and company reached the agreement in seven months, which is relatively short by industry standards and in comparison to the six years it took Atlas Air (NASDAQ: AAWW), another Amazon contractor, to conclude a pilot deal in September. Their number one focus, as they've expressed to us deliver products reliably, and that's what we give.". As the demand for passenger flying sank and cargo flying grew, Bricker's decision appeared to come at a perfect time and may prove to be the airline's saving grace. Follow him on social media for all his latest travel updates. A lesser-known decision with an unlikely ally announced in December 2019, however, ended up proving to be more impactful on Sun Country's future as the subsequent months would see its core business decimated by the virus. In-depth insights from an expert on the aerospace and airline industries, Dhierin is a leading contributor covering the aerospace industry on Seeking Alpha and the founder of. even if the prospects are good, there's always something keeping prices down and while I have been criticized for that view it seems that with rising recession fears and inflation things dont look good for airline stocks even when they are currently executing well. It's not unrealistic, but definitely not the kind of stuff you want to see in a market where airlines are dictating the prices. At the same time, there are the charters that allow the airline to pass through higher fuel costs. If you have an ad-blocker enabled you may be blocked from proceeding. However, simply not flying also means that utilization is suboptimal. One element that I was missing or I felt wasnt discussed in detail was how crew challenges are being dealt with in terms of really hiring people and training them. Simple Flying spoke with Sun Country's CEO, Jude Bricker, to discuss the airline's deal with Amazon. It currently operates 12 aircraft for Amazon. However, the $98 million higher revenues did not translate into higher operating income as expenses increased by $102 million marking a 99% increase in costs.
Source: FlightAware and Planespotters.net, Read More: Why an airline CEO thinks Hawaii is poised for a major tourism boom after the pandemic, but his won't be part of it, Read More: Big airlines are flying 'ghost planes' stuffed with packages now that the demand for passenger flights has cratered, Read More: Inside the massive effort by US airlines to transport medical supplies and mail on cargo-only flights using passenger jets. The transition to low-cost spearheaded by the former Allegiant Air executive was intended to be the company's way forward after being purchased by Apollo Global Management. The element is not completely true but there still are long-term contracts (six years with two two-year extension options) in place which insulate the company somewhat. The partnership was announced in December, just a month before the novel coronavirus was widely known. Additionally, last year there was payroll support that reduced the cost load by $26.9 million. The Amazon business was a key factor in Sun Countrys ability to keep from furloughing pilots during the COVID-19 pandemic when most airlines cut staff. it was a good marriage. You can view aviation and aerospace job vacancies. So, over time the airline is turning cash items into non-cash items. , Sun Country Airlines Cargo Sales Managers Phone number / Address / Email. now, Amazon. He has won two regional Gold Medals from the American Society of Business Publication Editors for government coverage and news analysis, and was voted best for feature writing and commentary in the Trade/Newsletter category by the D.C. Chapter of the Society of Professional Journalists. British Midland International (bmi regional), COVID19 Country-wise Air Travel procedures, Sun Country Airlines phone number, address. Sun Country can keep costs down on the Amazon deal because it is already familiar with the jet. Once your resume has been uploaded, you will be able to click the checkbox above to attach the resume to the message. Fares should be at record highs and many airlines are expecting that regardless of the fuel price environment margins will be strong but Sun Country Airlines has guided for a disappointing quarter ahead in my view. Deputy Content Manager & Lead US Journalist - Jays extensive travels and experience with premium products has given him incredible insight into the wider landscape of commercial aviation. You can, The Most Recommended Aviation Job Website. During the previous earnings season, airlines were rather upbeat on their performance in the second quarter. That in part might be caused by the fact that the airline already was profitable in previous quarters, but also because the company is transitioning its cost structure where pilots are paid more and aircraft are being owned or brought under financial lease. Stay informed:Sign upfor ourdailyandweeklyaviation news digests. As associate editor at American Shipper Magazine for more than a decade, he wrote about trade, freight transportation and supply chains. Is this happening to you frequently? This will lead to margins of 5% to 9% which is a reduction from the 10% margin in Q2 2019 and Q1 2022. Indeed, if you dont have the staff to fly the aircraft there isnt much you can do and flying at a loss doesnt sound attractive at all. During the quarter aircraft rents decreased by 43%, this is driven by Sun Country Airlines transitioning from operating leases where the aircraft should be returned to the lessor by the end of the lease to financial leases where the aircraft is the airlines property by the end of the lease term. Plus, for Amazon, the partnership allows it to continue on its rapid cargo growth. The company has increased pilot pay, which should help in the process of hiring but I feel that with decreases to charter flying which provides a part of the business where the high fuel prices can simply be passed through, the company is making the most out of its available staff but not the most out of the nature of the pass-through businesses. The past few years have seen the former full-service Minnesota leisure airline transform into a nationwide low-cost carrier, expanding as far as Hawaii while completely restructuring the customer experience. The airline has a lot of potential, but also depends on scaling up operations to unlock further scale benefits because the current demand-and-cost environment is not what's going to unlock that potential. So, Sun Country Airlines did something to become more attractive to pilots but I feel it did not outline how they get from hiring to training to having proficient workers. What's more worrying is that Sun Country Airlines says it will cherry pick and fly into the high-yield markets amidst crew shortages and the current pricing environment. Additionally, I find the Q2 2022 guidance disappointing. Sun Country Airlines was an ultra-low-cost carrier that flew under most radars as it pushed through a transition from full service to ultra-low-cost. My main concern with Sun Country Airlines is that it's operating 30% more block hours compared to the same quarter in 2019 and for the second quarter its expecting revenues up 24% to 30%. Instead, it prefers to work with other carriers to fly the cargo jets on their behalf to support their network. The passenger and cargo worlds are also very different. An award-winning business journalist with extensive experience covering the logistics sector, Eric spent nearly two years as the Washington, D.C., correspondent for Automotive News, where he focused on regulatory and policy issues surrounding autonomous vehicles, mobility, fuel economy and safety. I wrote this article myself, and it expresses my own opinions. Based in Washington DC, United States. I am not receiving compensation for it (other than from Seeking Alpha). For example, Cathay Pacific flies passengers under its main brand and cargo under the Cathay Pacific Cargo brand. Paul (MSP) Base, Minnesota, Management - Director of Quality Assurance, Maintenance - Technical Services Reliability Analyst, Search all aviation and aerospace jobs by clicking, Unlike other web sites, JSfirm's service is free for job seekers. The latter two provide some stability as they are partially insulated from economic shocks with long-term contracts, recurring set of customers regardless of economic downturn and fuel costs are passed through to customers. For a company that has been doing 10% adjusted margins this quarter that's disappointing. Air Canada is ripping seats out of aircraft across its fleet to turn them into cargo planes. Please find my resume and contact information attached. Second quarter outlook looks somewhat weak despite high demand. I look forward to speaking with you. as well as other partner offers and accept our, Stephen Brashear / Stringer / Getty Images, Visit Business Insider's homepage for more stories, Why an airline CEO thinks Hawaii is poised for a major tourism boom after the pandemic, but his won't be part of it, Big airlines are flying 'ghost planes' stuffed with packages now that the demand for passenger flights has cratered, Inside the massive effort by US airlines to transport medical supplies and mail on cargo-only flights using passenger jets. Please. What I'm liking about Sun Country Airlines is the combination of scheduled services, cargo and charter flights. "[Amazon] had airplanes, and so they needed the support of a carrier that could ramp-up really rapidly and support the kind of growth profile that they had. Excluding cargo services, revenues were still up $9 million. I have no business relationship with any company whose stock is mentioned in this article. Pilots for Amazon transport provider Sun Country Airlines have easily ratified a new four-year contract, the union representing them said Tuesday. However, one deal that boosted the airline's profile was one to fly Boeing 737-800 cargo aircraft for Amazon in 2019. India's Star Air To Lease 2 Embraer E175s From Nordic Aviation Capital, The Amazon Sun Country Partnership: Why It Works, pushed through a transition from full service to ultra-low-cost, cargo airlines usually will fly older aircraft, partnership allows it to continue on its rapid cargo growth, Avelo Airlines Partners With Alliance Aviation To Support Pilot Recruitment Drive, June Was Exceptional For Singapore Airlines And Scoot. You may upload one to your account now. Sun Country is a good partner for Amazon. Select a resume file type (.PDF, .DOC, .DOCX, or .txt), Minneapolis/St. He can be reached for comments and tips at ekulisch@freightwaves.com, The only thing missing in your inbox is FreightWaves. So. Amazon started its own air cargo operations in 2016 as its business expanded with the introduction of Amazon Prime. The big question is whether the demand environment remains as robust as seen today and whether Sun Country Airlines can grow its fleet and staff to turn growth into profits. Instead, it relies on subcontractors like Atlas Air, Southern Air, and now, Sun Country Air. Earlier this year, Kalitta reached a pilot agreement after one year of negotiations. Cargo airlines generally fly fewer segments per day, while passenger airlines try to fly their planes as much as possible. I have no business relationship with any company whose stock is mentioned in this article. The quick resolution of talks is certain to please Amazon, which abhors uncertainty and the possibility of unhappy pilots creating operational inefficiencies by working minimum hours or calling in sick. Part of that was driven by a 25% increase in block hours, but the surge in fuel prices also plays a big role. Sun Country Airlines Q1 2022 results (Sun Country Airlines ). Obviously for the cargo business, an economic downturn leads to lower demand for e-commerce shipping but Sun Country Airlines is well protected with long-term contracts. Flight Review: Lufthansa Business Class - Airbus A350 - San Francisco (SFO) to Munich (MUC), The Most Notable New Airline Routes This Week. Even among airlines that operate both cargo and passenger brands, the cargo operation is generally smaller than the passenger operation in the fleet count. On top-line, fares are going to be up supported by ancillary revenue that should tick up from $49 to $60 over the longer term. Brian Lethert, chairman of ALPAs Sun Country Master Executive Council. So you can either be a charter operator in that space and subject to the whims of those customers, or you can partner with somebody, and that's what we did.". His expertise is also leveraged in Luchtvaartnieuws Magazine, the biggest aviation magazine in the Benelux. We were a sizable operation, but not too big to where we we could give them the kind of service that they required. Jude Bricker took over as chief executive at Sun Country Airlines in 2017 and during his tenure, he's overseen some monumental shifts at the airline. My main concern with airlines has always been that even if the prospects are good, there's always something keeping prices down and while I have been criticized for that view it seems that with rising recession fears and inflation things dont look good for airline stocks even when they are currently executing well. A rough calculation shows that around $26 million of the $40.27 million increase in aircraft fuel costs is related to higher jet fuel prices. I want to congratulate both bargaining teams for having the dedication to reach an agreement in record time.. The Amazon aircraft are mostly Boeing 767s. It provides our highly skilled pilot group with competitive wages and benefits and enables Sun Countrys significant future growth plans, said Bricker. It's actually a very concentrated industry with UPS, US Postal Service, FedEx. Cited by TIME and Intelligent Aerospace, among others, and interviewed by major outlet NPR, Jays focus on route planning and fleet developments allow him to dig deeper into the stories behind the headlines. Sun Country Airlines guidance (Sun Country Airlines). However, I do not see prioritizing flying in some segments as a sustainable solution to the pilot supply problem. To ensure this doesnt happen in the future, please enable Javascript and cookies in your browser. Excluding payroll support, Sun Country Airlines would see profits improve by $23.8 million, which is around 10% when expressed as a percentage of revenues. I wrote this article myself, and it expresses my own opinions. I like the scheduled service-cargo-charter set up that Sun Country Airlines has and I believe that it allows the company to deploy assets based on demand and provides some stability due to the different nature of each of the segments. So crew shortages are in some way not allowing the airline to optimally benefit from the parts of the business that are insulated from the jet fuel price environment and that is disappointing. It is responsive to Amazon's concerns, has experience flying Boeing 737s, and has a reputation for successfully flying older aircraft. According to the Air Line Pilots Association, 93% of the eligible pilots participating voted to ratify the agreement, which brings their pay rates, retirement contributions, commuter policies and work rules in line with those of industry peers. * You currently have no resume uploaded on file. This agreement represents a milestone for both Sun Country and our pilots. Year-over-three comparisons, which are used to quantify the recovery to pre-pandemic levels are a bit less effective for Sun Country Airlines as the airline added cargo services to its portfolio but total revenue per available seat mile was down 1% on lower fares. During the third quarter of 2021, cargo revenue was $24 million, a 10% increase versus the second quarter and 71% higher than the same period in 2020. Sun Country Airlines did increase pilot pay and that's pressuring margins now, but over the longer term will attract pilots and also improve margins on escalated contracts when the pricing of contracts outpace the pilot pay rate increase. Which Aircraft Types Did Indian Airlines Fly? Eric is based in Portland, Oregon. If you wish to include a resume with this message. Amazon does have its own fleet of aircraft, but it is not an airline. For the second quarter, the hybrid carrier expects fuel prices of $3.50 per gallon but the IATA monitor shows fuel prices in North America of $4.20 per gallon which is down from the prior month. In the first quarter, charter block hours were down 14.3% as Sun Country Airlines prioritized scheduled services due to crew shortages. His reports have been cited by CNBC, the Puget Sound Business Journal, the Wichita Business Journal and National Public Radio. Click here for more FreightWaves/American Shipper stories by Eric Kulisch. So, we did see significant improvement on an adjusted basis and we see that Sun Country Airlines was profitable in Q1 last year as well as this year. Subscribe Now, Download the FreightWaves app for unlimited access to news and insights (Android & iOS Available), Copyright 2022, All Rights Reserved, FreightWaves, Inc, Pilots ratify 4-year labor deal at Amazon cargo carrier Sun Country, Whittling away: Indicted Nikola founder dumps 7M more shares, Breakthroughs and misconceptions: 9 questions with ChargePoints Rich Mohr, Cold one: Manhattan Beer Distributors all in on electrifying beverage trucks, Struggling battery startup Romeo Power taps veteran executive for CEO. Sun Country Airlines Holdings, Inc. (SNCY). Plus, cargo airlines usually will fly older aircraft. Disgruntled pilots blast 5-year contract with Atlas Air, Kalitta Air pilots ratify 4-year contract, Serving the global freight industry with the fastest and most comprehensive news insights and market data on the planet. The union and company reached the agreement in seven months, which is relatively short by industry standards and in comparison to the six years it took Atlas Air (NASDAQ: AAWW), another Amazon contractor, to conclude a pilot deal in September. Their number one focus, as they've expressed to us deliver products reliably, and that's what we give.". As the demand for passenger flying sank and cargo flying grew, Bricker's decision appeared to come at a perfect time and may prove to be the airline's saving grace. Follow him on social media for all his latest travel updates. A lesser-known decision with an unlikely ally announced in December 2019, however, ended up proving to be more impactful on Sun Country's future as the subsequent months would see its core business decimated by the virus. In-depth insights from an expert on the aerospace and airline industries, Dhierin is a leading contributor covering the aerospace industry on Seeking Alpha and the founder of. even if the prospects are good, there's always something keeping prices down and while I have been criticized for that view it seems that with rising recession fears and inflation things dont look good for airline stocks even when they are currently executing well. It's not unrealistic, but definitely not the kind of stuff you want to see in a market where airlines are dictating the prices. At the same time, there are the charters that allow the airline to pass through higher fuel costs. If you have an ad-blocker enabled you may be blocked from proceeding. However, simply not flying also means that utilization is suboptimal. One element that I was missing or I felt wasnt discussed in detail was how crew challenges are being dealt with in terms of really hiring people and training them. Simple Flying spoke with Sun Country's CEO, Jude Bricker, to discuss the airline's deal with Amazon. It currently operates 12 aircraft for Amazon. However, the $98 million higher revenues did not translate into higher operating income as expenses increased by $102 million marking a 99% increase in costs.