Sun Country Airlines (SNCY) Q1 2025 earnings summary

Executive summary

• Achieved record quarterly revenue of $327 million, up 4.9%–5% year-over-year, with strong earnings and charter revenue, and eleventh consecutive profitable quarter.

• Net income increased 3% to $36.5 million, with GAAP diluted EPS of $0.66 and adjusted diluted EPS of $0.72, up 9.1% year-over-year.

• Operating income reached $56.2 million (GAAP) and $60 million (adjusted), with margins of 17.2% and 18.3%, among the industry's highest.

• Charter and cargo revenue growth offset weaker scheduled service demand, highlighting business model diversification and strong home market demand.

• Ratified new contracts for flight attendants and dispatchers, including a $1.8 million ratification bonus.

Financial highlights

• Passenger revenue grew 4% to $285.9 million; average scheduled service fare rose 1% to $198.44.

• Charter revenue increased 15.6% to $55 million, with ad hoc charter revenue up 55% year-over-year.

• Cargo revenue grew 17.6%–18% to $28.2 million, driven by new contract rates, annual escalations, and additional Amazon aircraft.

• Adjusted EBITDA reached $84.5 million, with a margin of 25.9%.

• Adjusted CASM increased 3.5% year-over-year to 7.34 cents, driven by higher salaries, ground handling, and maintenance costs.

Outlook and guidance

• Q2 2025 revenue guidance: $250–$260 million; operating margin expected at 4%–7%.

• Scheduled service ASMs expected to decline 7% in Q2 and 3%–5% for the full year as pilot resources shift to cargo.

• Cargo revenue projected to double year-over-year by September, with all eight new Amazon freighters in service by end of Q3.

• CapEx for 2025 expected at $70–$80 million, mainly for spare engines and cargo aircraft inductions.

• Economic fuel cost per gallon forecasted at $2.44; effective tax rate at 23%.