Sun Country Airlines Holdings, Inc. Q3 FY2025 earnings call

• Diversified business model with 13 consecutive profitable quarters, leveraging schedule flexibility and low fixed cost model.
• Cargo expansion completed with all 20 aircraft in operation; Q3 cargo revenue up 60% y-o-y, expected to be over 75% by December.
• Scheduled service TRASM improved: 3Q TRASM up 1.6%, September up over 7%, 4Q expected up over 6%, 1Q 2026 even stronger.
• Charter production set an all-time record volume with revenue per block hour up 4% y-o-y.
• Safe and reliable network with 3Q controllable completion factor of 99.3%.

Cargo: Third quarter cargo revenue for September was up 60% year-on-year, expected to move to over 75% by December. Q3 cargo revenue was $44 million, accounting for 50.9% of total revenue. All 20 cargo aircraft are in operation. Passenger: Scheduled service revenue was down 3.2% year-over-year primarily due to schedule and service operation reduction. Charter revenue grew 15.6% with block hours up 11.1%. August total fare for scheduled service increased 2.6% vs last year, load factor up 2.7 percentage points to 87%. September total fare up 4.5% vs last year, load factor up 3.2 percentage points to 83%.

• Fourth quarter total revenue expected between $270 million and $280 million, with block hours up 8% to 11%.
• Anticipating fuel cost per gallon to be $2.50 to achieve operating margin of 5% to 8%.
• Maintenance costs pulled forward from 2026 to manage fleet maintenance in 4Q.
• Expect to achieve $300 million of run rate EBITDA after the second quarter of 2027, though timing may be delayed by factors beyond control.

• Factors beyond control may delay full implementation of achieving $300 million run rate EBITDA.
• Aircraft redelivery timing could impact utilization and growth plans.
• Lumpiness of maintenance costs, including heavy checks and engine repairs.
• Cost pressures from airports due to their massive capital programs.
• Competitive capacity changes in certain markets affecting market dynamics.

Q: How does cargo expansion impact the seasonality of the business?

A: Jude Bricker noted ramp-up of cargo was slower than expected, but cargo operation will affect most months in 2026, and scheduled service schedule will be repeaked potentially increasing seasonality.

Q: Is RASM continuing into the fourth quarter and holiday bookings?

A: Jude Bricker stated sales look really strong into winter period, no worrisome weaknesses seen across network.

Q: Thoughts on charter in 2026?

A: Jude Bricker mentioned charter has different flavors including contractual, VIP, military, and ad hoc flying, with strong demand and fewer competitors providing lift, leading to good opportunities for Sun Country.