Sun Country Stays Pragmatic While Shopping For Boeing 737s
Sun Country Airlines may not be the first name that comes to mind when one thinks of a…
Sun Country Airlines may not be the first name that comes to mind when one thinks of a US airline. However, the ultra-low-cost carrier is determined to expand its position and become relevant to more travelers. With recent route expansions and a successful IPO, the airline is gearing up for growth. In 2021, the airline has been shopping around for planes. While there are deals to be had, Sun Country is acquiring Boeing 737s in a pragmatic manner.
Sun Country grows its fleet
During the second quarter of 2021, Sun Country expanded its passenger fleet. The carrier acquired two additional Boeing 737-800 aircraft. These are used planes.
A third aircraft arrived at Sun Country in July. This took its overall passenger fleet to 34 aircraft, but that is not all it plans to have this year. The carrier announced it is actively pursuing deals for used jets and plans to get to 36 Boeing 737s by the end of the year.
Dave Davis, President and Chief Financial Officer, stated the following on the airline’s used aircraft strategy:
“We are actively in the market for 737NGs that fit our cost parameters, and we have seen a lot of aircraft coming available in the market in recent months at attractive terms. As a reminder, Sun Country has no committed aircraft book, and we’re able to fund our growth with low-cost aircraft purchased opportunistically in the used market.”
Pragmatic growth from Sun Country
The crisis has opened up many attractive opportunities for airlines like Sun Country to acquire used mid-life aircraft at attractive rates. Sun Country’s planes are Boeing 737 Next Generation aircraft, and it wants to stick with fleet commonality. However, CEO Jude Bricker had not ruled out looking at the MAX or even Airbus planes in an interview with Simple Flying in April.
Sun Country has laid out a plan to get to 50 aircraft by the end of 2023 in passenger service, and it is making excellent progress in getting there. By the end of this year, the carrier will only be 14 aircraft shy of that schedule.
However, there are limits to just how quickly Sun Country can add new jets. As Mr. Davis further explained:
“I think operationally, probably the max pedal to the metal for us would be an aircraft a month. I don’t know if we could sustain that for two years, but it’s an aircraft a month kind of thing at max.”
Adding new aircraft is not an easy process. Generally, Sun Country will need to retrofit the aircraft, have the jet repainted in its house livery, and – most importantly – source the crew to fly the aircraft. Every airline has its own maximum number of new jets it can induct in a given period of time.
However, that does not mean Sun Country cannot take advantage of pandemic-era deals on jets. Mr. Davis described the carrier’s flexibility in this regard:
“One of the things we can always do though, given the strength of our model, we can bring an aircraft that we might not necessarily have a scheduled service need for in a particular month or quarter, even that we bring it in, but we can throw it into our ad hoc charter pool, and, as long as we get the pilots to resource it, we can use the aircraft to pick up some incremental charter revenue.”
This diversified model has significantly helped Sun Country. Charter operations are starting to come back as sporting events resume. In fact, charter operations have, historically, helped push Sun Country to land at over 300 airports a year.
Some deals are simply too good to pass up. While charter revenue might not be as reliable or as frequent as scheduled services, it can help pay the bills for an aircraft that is too good to pass on.
Nevertheless, Sun Country is taking a pragmatic approach. The aviation industry is littered with airlines that grew too big too fast. Newer entrants in the market – Avelo and Breeze – have had to trim their schedules recently and alter their route networks to rectify some expansive growth.
The airline is very well known among travelers in the Minneapolis/St. Paul area, where it is based. Recently, it has announced new flying out of other Midwestern cities like Rochester (RST), Duluth (DLH), and Green Bay (GRB) to leisure destinations in Florida and Arizona.
Sun Country needs to factor in the time it takes for some of the markets to mature. This means the early days or months of a new route addition can come at a loss to a carrier. Compound that across multiple routes over multiple weeks or months, and it can spell trouble for a growing carrier. Sun Country is trying to mitigate that risk by following a pragmatic approach.
The slow and steady approach to growth and aircraft acquisition continues at Sun Country. Still, it is well on its way to hitting 50 jets in passenger service by the end of 2023.