Sun Country, Chief Revenue Officer, Grant Whitney at the CAPA Airline Leader Summit Americas 2024

Transcript

Grant Whitney:In Q1, like, I think we should start with we had an amazing quarter. Like, the— our profitability, if you just rank profitability of airlines, we're seasonally strong in the first quarter, but our operating margin was over 18%, which you compare that to anyone else, anyone would have given a lot to have an 18% margin. So, and we grew the airline significantly. So our growth was well over 15% in the quarter. Wow. So while demand may not have been exactly where we had planned or budgeted for, it still came in really nicely. The brand did really well in terms of attracting customers. And the one thing we haven't said a lot about this, it was the warmest weather on record in Minnesota for a winter. We had no snow. And so we got into this situation sometimes where the weather in Minnesota wasn't all that much worse than Florida and Arizona just because of the crazy trends that were going on. So all in all, I think the first quarter was really good, showed the value of the brand. The demand situation, the capacity situation is certainly influencing what's going on as we look out into the rest of the year. We really addressed that on our second or our first quarter earnings call. And so we're going to— we're an agile carrier. We're going to adjust. The demand situation, the competitive intensity situation, we've seen this and we can adjust to it. And the diversified business model, this is really where it provides value for us. So if we're seeing sort of the scheduled service business not sort of meet the expectations we had for it, we can adjust that capacity within our business models. And that's what you're going to see us do. Nothing dramatic, nothing draconian, but we're going to adjust certainly the off-peak capacity that we had planned in the second half of the year. We're going to bring that down some, but we're going to still be very focused on the peak periods and take people in Minnesota to where they want to go. We're agile. We sort of have that capacity. We have that DNA. So we're always looking at it. I would say there's nothing really to report now, but there's no difference here. We'll continue to stay abreast on that, those market conditions. But we're also going to be looking at how we can bulk up our charter business. We have really, really good long-term partnerships on the charter side that drive the majority of our revenue, but we're a really good ad hoc player and we can get in there and sort of, if somebody comes to us with a close-in need, we can successfully do that. And over the last few years, we've actually been deprioritizing that side of the business because the scheduled service demand was so strong. But in the current environment, we can look now to more of that sort of ad hoc charter business, and we're a really strong player in that space. And I know a lot of customers are excited that we're sort of more able to take that demand in this environment. So I think we've had sort of our platform's pretty good. We've always sort of had a front of the cabin sort of opportunity to sell customers up. We feel really good about that. You're not going to see us change our perspective on it. We take customers to St. Thomas in the winter. Those are customers who have a different budget point than people that may be going to, to the west coast of Florida. So I think we do a really good job of building a schedule that sort of takes people where they want to go. And some of that high-end leisure, premium leisure comes on us because of where we're flying, not really because of what we're putting on the airplane. But I think we do a really good job of just meeting our customers where they are with our plant— product as it is today. So you're not going to see any big changes from us. Thank you.

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