Sun Country Airlines, CEO, Jude Bricker at the CAPA Airline Leader Summit World 2025

Transcript

Jude Bricker:Well, the leisure market in the U.S. is strong. We focus on originating traffic coming out of our hometown in the Twin Cities in Minnesota. There's about 4.5 million people in our catchment area. We carry about half a million passengers a year. We have about 1.6 million loyalty members, so we're fully penetrated in our local market. And the focus is to try to take those folks to warm destinations. Winter started in Minnesota. It's about -20°C there right now. And we got snow on the ground and people are looking to get to warm places for their weekends and we're there to help. So Florida destinations, desert destinations in the US like Phoenix and Vegas, Southern California, Mexican Caribbean beach destinations. that people love to go to. The interesting thing about Sun Country is that we change the network substantially in response to these predictable demand changes. So in the summertime, Minnesotans want to go visit friends and relatives on the large coastal metroplexes like Boston and New York and San Francisco. But in the summertime— in the wintertime, as I mentioned, we're going to warm destinations. So we totally redo the network really every day in response to the demand that we expect to be specific to that time. Our secret sauce is about variable capacity. So we have a cargo business that is really stable, and that allows me to have things for my pilots to do when they're not flying scheduled service. And so our schedules are hugely variant. To give you a couple examples, September's a down period. It's about a third the size of our July schedule. December's an interesting study because the first 2 weeks of December are terrible. In the US, we have a Thanksgiving holiday the last week of November, and then before Christmas, no one travels. And in the last 2 weeks, everybody travels. So we're about, you know, our last 2 weeks of December are about 150% bigger than our first 2 weeks. And if you look around the US industry, and it's similar in Europe, schedules vary, but not much. And so Delta varies by 3%, Southwest by 6%, but we're 150%. And that's really the secret sauce, is that we fly when people want to travel and we don't when they don't. The pure low-cost model is about asset utilization and getting unit costs as low as possible. We have used airplanes on purpose. And we work on trying to vary the schedule, as I mentioned. So cargo is the stabilizing force in the network. We do about 70 daily departures for Amazon Prime. It's 70 daily in September and March and July and December. Doesn't matter. 70 daily. And that allows us, you know, to vary the scheduled service, which is getting back to the secret sauce. I'm a believer in the new technology, MAX. I think it would make sense. There aren't any available today at the price point that we need them to be at. So we'll stay in the market and keep looking for things. But we have the advantage of being, having been really active on aircraft acquisitions coming out of COVID We were in a really good place. We actually made money, at least on EBITDA basis in 2020. That may be the only airline in the world to be able to say that. And so we were in a good place coming out of COVID We just went public. And so we were really active and we acquired a bunch of aircraft that we today lease out and are going to redeliver into our fleet to support our growth into '27 and '28. So we don't need any additional airplanes to meet our growth targets. And that's an advantage today as planes are pretty expensive and dear right now. Fortunately, we've done a lot of the heavy lifting in 2025 related to growth. So we increased the revenue produced by our cargo business by 100% in December versus December of 2024. And so that'll give us some tailwind going into next year. We have a lot of execution issues. We're getting PBS rolled out to our crews, which is a different way of rostering. We just launched our new credit card program for loyalty. So there's a lot of blocking and tackling things, but the strategic work was done in '25. So I'm really, really excited to just execute well and expand our market share in our home market in 2026 on the back of these lease redeliveries and fleet growth that's already been arranged and paid for.

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