Sun Country Turns A Profit With Diversified Business Model

Sun Country Airlines has turned a first-quarter profit. With passenger revenues down, the key to Sun Country’s success…

Sun Country Turns A Profit With Diversified Business Model

Sun Country Airlines has turned a first-quarter profit. With passenger revenues down, the key to Sun Country’s success has come from its diversified business model. Touching scheduled passenger service, charters, and a cargo deal with Amazon, the airline is looking forward to a very successful summer with three strong revenue streams.

Sun Country Airlines is an all-Boeing airline based out of Minneapolis. Photo: Getty Images

Sun Country Airlines turns a first-quarter profit

Ultra-low-cost carrier (ULCC) Sun Country Airlines has reported a net income of $12.4 million for the first quarter of 2021. Total operating revenue was $127.6 million.

Passenger scheduled service fares brought the airline $54.6 million, while ancillary fees raked in another $23.8 million. As a ULCC, Sun Country brings passengers in with its low fares with few frills and offers its passengers chances to purchase add-ons.

Sun Country’s diversified strategy has helped

Sun Country has three solid revenue streams. First, there are scheduled passenger services, which make up the bulk of the airline’s revenue. In the scheduled passenger world, Sun Country’s first-quarter capacity was down 23% to align with passenger demand. Load factor for the business was 67% in the quarter.

Sun Country has benefited from a diversified business model. Photo: Sun Country Airlines

The second major revenue stream for Sun Country is the charter business. Primary clients for Sun Country include sports teams, the US Department of Defense, casinos, and other customers. Charter service revenue was down 12% for the quarter due to declines in casino charters even with the return of March Madness flying for basketball. Charters help the airline touch over 300 airports in a year.

The last, and one of the most stable streams of revenue, was the cargo business. Sun Country has an agreement with Amazon. Flying cargo jets for Amazon only started in May 2020, but revenue from this stream was $21.6 million – a sizable chunk.

2021 is looking like a good year for Sun Country

Sun Country has provided some guidance for the second quarter. It expects its total system capacity to be down around 17-20%, with revenue down 20-24%. The second quarter will see a host of new passenger flights launching.

However, the summer is going to be a good one. After seeing demand improve from mid-February, CEO Jude Bricker stated the following about 2021:

“As of today, our summer schedule is sold to a higher load factor as compared to the same time in 2019.  Our charter business is recovering quickly, and we are flying a full twelve aircraft schedule in our cargo business.”

Amazon prime 737-800BCF Getty
Sun Country also flies Boeing 737 aircraft for Amazon. Photo: Getty Images

Sun Country has come a long way over the last few years. After lagging behind its competitors, the airline brought on Mr. Bricker, who came to Sun Country from Allegiant. Mr. Bricker helped push the airline on its transition to an ultra-low-cost carrier.

Arguably, one of the best decisions Sun Country made was entering the cargo business. This helped the airline through the pandemic. Sun Country flies 12 Boeing 737-800 freighter aircraft for Amazon. This business is far more stable than passenger flying.

Sun Country is now back on an expansion track. It has agreements in place to take three more planes this year. In the coming months, the airline wants to take more planes and put up a fight. While the airline has a bias towards older, mid-life aircraft, it has not ruled out the potential for a major fleet shakeup.

Are you surprised by Sun Country’s first-quarter results? Let us know in the comments!

Source : Simple Flying More   

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KLM Set To Replace Transavia With Daily Flights To Belgrade

KLM is launching daily flights from Amsterdam to Belgrade this summer, marking a return to Serbia’s capital after…

KLM Set To Replace Transavia With Daily Flights To Belgrade

KLM is launching daily flights from Amsterdam to Belgrade this summer, marking a return to Serbia’s capital after more than three decades. KLM is replacing Transavia on the route and ending its codeshare agreement with Air Serbia from Belgrade to Amsterdam.

KLM will return to Belgrade next week under its KLM Cityhopper brand. Photo: Getty Images

KLM returns to Belgrade with a daily flight

KLM is returning to Belgrade Nikola Tesla Airport next week after a break of over 30 years and having served Serbia as far back as 60 years ago.

The Dutch airline will first launch a three-weekly service next week, on Thursday 13th May, operating rotations on Thursdays, Saturdays, and Sundays.

Then, from Monday 14th June, the frequency will increase to one daily flight, and it will remain so indefinitely.

  • KL1905 departing Amsterdam (AMS) at 09:30 and arriving in Belgrade (BEG) at 11:55
  • KL1906 departing Belgrade (BEG) at 12:30 and arriving in Amsterdam (AMS) at 15:10

The first flight from Amsterdam to Belgrade on Thursday 13th May next week appears to be already sold out, with tickets no longer on sale for the outbound journey but still on sale for the return journey.

KLM CityHopper Embraer
KLM’s Cityhopper airline will operate the route daily with its Embraers. Photo: Getty Images

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KLM replaces Transavia

When KLM launches flights from Amsterdam to Belgrade, it will be replacing Transavia on the route. Transavia is KLM’s low-cost subsidiary airline that has been operating flights to Belgrade ever since April 2017.

Transavia operated its Boeing 737 aircraft to Belgrade six times weekly, so KLM’s arrival will be a downgrade in capacity. Transavia had a codeshare agreement with KLM, so KLM could use Transavia’s flights to feed its global network from Amsterdam Schipol.

KLM also made use of Air Serbia’s ten weekly flights from Belgrade to Amsterdam, on which it codeshared to feed its network too. Now, as it launches its own flights, KLM will stop selling tickets on Air Serbia’s flights.

Air Serbia A320
KLM is no longer selling tickets to Amsterdam from Belgrade on Air Serbia’s flights. Photo: Getty Images

The codeshare with Air Serbia has changed

KLM’s booking system indicates that KLM is no longer selling seats on Air Serbia’s flights from Belgrade to Amsterdam, even though Air Serbia will be selling tickets on KLM’s own flights.

In doing so, Air Serbia is still able to feed its regional network in Belgrade with passengers arriving from Amsterdam every day. Because of this, and because KLM is already flying daily, Air Serbia will be offering just five weekly frequencies to Amsterdam this summer compared to 10 weekly in 2019.

Still, Air Serbia is continuing to sell tickets on KLM’s flights that connect onto other Air Serbia flights in Europe, thus allowing passengers to reach Amsterdam from Belgrade via other European hubs.

For example, Air Serbia is selling tickets for the following KLM flights:

  • KL1223 from Amsterdam to Paris CDG
  • KL1765 from Amsterdam to Frankfurt
  • KL1969 from Amsterdam to Zurich
  • KL1869 from Amsterdam to Stuttgart
  • KL1823 from Amsterdam to Berlin Brandenburg
  • KL1863 from Amsterdam to Dusseldorf

What do you think of KLM’s return to Belgrade? Do you think the route will see more frequencies in the future? Let us know what you think of this story in the comments below.

Source : Simple Flying More   

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