Sun Country first-quarter earnings fall despite rising demand

Sun Country Airlines flew at pre-pandemic levels during the first three months of the year, but its profit fell due to rising fuel costs.

Demand for air travel picked up all through the quarter, executives said Thursday.

"Nearly two years since the onset of the COVID pandemic, demand for air travel in the first quarter returned to pre-pandemic levels," Jude Bricker, the company's top executive, told investors and analysts in a conference call.

Sun Country's profit was $3.6 million, or 6 cents a share, versus $12.4 million, or 24 cents a share a year ago. Its pretax income was $16 million, up from a loss of $4.9 million a year ago.

Revenue was $227 million, up from $128 million a year ago.

Demand in the quarter materially picked up in February, executives said. In March, Sun Country's performance surpassed the same month of 2019 in both capacity and revenue.

Charter and cargo operations accounted for 33% of Sun Country's flying hours in the first quarter.

For the second quarter, total revenue per available seat mile is expected to increase between 25% and 34% compared to the 2019 period, Bricker said. Revenue is expected to be nearly 30% higher than it was in the second quarter of 2019.

But growth could be tempered by rising fuel costs, Dave Davis, president and chief financial officer, said during Thursday's call. The airline projects fuel to cost about 53% more now than it did at the same time in 2019.

Sun Country announced four new routes in the quarter that will begin service later this year. Two will serve Las Vegas from Green Bay and Madison in Wisconsin. The others will connect Minneapolis with Reno, Nev., and Harlingen, Texas, to Cancun, Mexico.