Summary
- Sun Country Airlines is leasing two Boeing 737-800s to flydubai due to a pilot shortage.
- Despite the leasing arrangement, Sun Country remains focused on expanding its route network and achieving growth.
- The airline recorded profitable Q3 results but faces challenges from rising fuel prices and slow improvements to staffing levels.
Sun Country Airlines is shifting its original plans that involved adding more Boeing 737-800s to its fleet. Instead, the aircraft will reportedly be leased to Dubai-based low-cost airline flydubai.
It comes after Sun Country has been focused on expanding its route network and destinations served. While the Minneapolis-based airline performed strongly throughout the second and third quarters this year, the airline’s CEO reportedly acknowledged its growth depends on its fleet size.
“Until we’re able to fully utilize them”
According to an exclusive report from ch-aviation, Sun Country’s decision to lease the 737s to flydubai is due mainly to the “growth moderation” stemming from the ongoing pilot shortage. The constraints result in the aircraft being delayed by over a year, according to Jude Bricker, the carrier’s CEO, who spoke at an earnings call earlier this month.
“This will delay the entry into service of two 737-800s planned for the fourth quarter of 2023 until the first quarter of 2025. Aircraft are generally in high demand as much of the aviation industry deals with production delays on new narrow-bodies and service disruptions from the GTF (Pratt & Whitney). So we’ll make good returns on these aircraft until we’re able to fully utilize them.”
Growth ambitions and financial performance
Last month, Sun Country unveiled a significant expansion to its route network, announcing eight new domestic routes that will be operated seasonally, pending final approval. The new flights, set to begin in June 2024, will increase its network to 120 routes to more than 100 airports across North America and the Caribbean.
“We recently extended our schedule through the summer of 2024 and announced 10 new Minneapolis markets,” Bricker explained. “I think, this is representative of our growth for the next few years as we continue to expand into our Minneapolis opportunity during peak periods, supported by modest off-peak growth in our charter business.”
The airline experienced a profitable Q3, with revenue increasing 12.3% to nearly $250 million, according to Dave Davis, Sun Country’s President and Chief Financial Officer, who spoke at the earnings call. Combined scheduled service and charter revenue reportedly grew 9.7% year-over-year to just over $214 million. While the airline also recorded record profit in Q2, it has faced challenges from rising fuel prices during both quarters and slow improvements to staffing levels.
“We continue to see staffing levels improve, albeit more slowly than we would like,” Bricker said.
Photo: Sun Country Airlines
In September, Bricker admitted that his airline faces limits on how much it can grow with its current fleet and is considering the possibility of operating new planes in the future, according to AeroTime. With the pair of 737s being leased out to flydubai, Sun Country’s growth ambitions could encounter difficulties or delays in the near future. However, additional aircraft are on the way.
More aircraft to support growth
According to ch-aviation, the airline’s fleet comprises several 737-800s. 33 of its 42 aircraft in operation are owned by the carrier. A single 737-700 is also part of its fleet, dedicated to charter operations. The 737-800BCF (Boeing Converted Freighter) supports its cargo flights, with 12 planes flying for Amazon Air, known as Prime Air.
Photo: Joe Kunzler | Simple Flying
To support future growth, Sun Country reportedly acquired five 737-900ERs from Oman Air through an operating lease.
“Those [B737-900ERs] start to come off lease and redeliver to us in November of 2024. So that’s incremental aircraft in 2025,” Davis said, according to ch-aviation. “So, we think we’re in a great position from a fleet perspective.”
Sources: ch-aviation, AeroTime