Sun Country Airlines Reports Mixed Q3 Results, Net Income Down 69% Amid Rising Operating Expenses

Sun Country Airlines Holdings, Inc. reported its financial results for the third quarter and nine months ended September 30, 2024, reflecting a mixed performance compared to the same periods in 2023.

For the three months ended September 30, 2024, total operating revenues reached $249.5 million, a slight increase from $248.9 million in Q3 2023. Passenger revenues decreased to $207.8 million from $214.4 million, attributed to an 8% decline in total fare per passenger. Conversely, cargo revenues increased by 12% to $29.2 million, and ancillary revenues rose by 4% to $73.2 million. Operating income for the quarter was $12.4 million, down 35% from $19.0 million in the prior year, while net income fell to $2.3 million from $7.6 million, marking a 69% decrease.

For the nine months ended September 30, 2024, total operating revenues increased to $815.3 million from $804.1 million in 2023. However, net income dropped significantly to $39.5 million from $66.5 million, a decline of 41%. Operating income for the nine-month period was $79.9 million, down 28% from $110.4 million in 2023. The decrease in profitability was primarily driven by rising operating expenses, which increased to $735.4 million from $693.7 million.

The company’s total current assets decreased to $226.0 million as of September 30, 2024, from $271.4 million at the end of 2023. Cash and cash equivalents increased to $56.8 million, while investments fell to $89.7 million from $141.1 million. Total liabilities decreased to $1.1 billion, down from $1.1 billion at the end of 2023, with long-term debt also declining to $275.9 million from $327.5 million.

Strategically, Sun Country entered into an Amended and Restated Air Transportation Services Agreement (A&R ATSA) with Amazon in June 2024, expanding its cargo operations by increasing the number of 737-800 cargo aircraft from 12 to 20. The first additional aircraft is expected to begin service in Q1 2025. The company also reported a significant increase in rental revenue, which rose to $29.2 million for the nine months ended September 30, 2024, compared to $11.7 million in the same period in 2023.

Overall, while Sun Country Airlines experienced growth in certain revenue streams, it faced challenges in profitability and rising operational costs, impacting its financial performance compared to the previous fiscal period.