Core Points - Sun Country Airlines has extended its selling schedule through September 8, 2026, allowing customers to book nonstop travel to over 100 destinations [1] - The airline will operate 115 routes serving 100 airports across the United States, Mexico, Central America, Canada, and the Caribbean [5] - New routes for 2026 include service between Minneapolis-St. Paul and Tulsa, Oklahoma, as well as Tulsa and Cancun starting May 21, 2026 [3] Group 1: Destinations and Services - Popular summer destinations include Anchorage, Boston, New York, Los Angeles, and Seattle, along with unique locations like Traverse City, Michigan, and Kalispell and Missoula, Montana [2] - Increased flight frequencies to coastal destinations such as Charleston, South Carolina, and San Diego will provide more options for travelers [3] - The airline emphasizes a hassle-free travel experience with state-of-the-art onboard amenities, including in-seat power and free in-flight entertainment [5] Group 2: Company Overview - Sun Country Airlines is characterized as a hybrid low-cost carrier focused on leisure and visiting friends and relatives (VFR) passengers, as well as charter customers [7] - The airline also provides cargo services, notably to Amazon, enhancing its operational capabilities [7] - The company aims to create memorable travel experiences by connecting guests to their favorite destinations [7]

Company Overview - Sun Country Airlines is a hybrid low-cost air carrier focused on connecting guests to their favorite destinations, aiming to create lifelong memories and transformative experiences [2] - The company operates scheduled service, charter, and cargo service segments, primarily serving leisure and visiting friends and relatives (VFR) passengers [2] - Sun Country provides cargo service to Amazon and operates flights throughout the United States, as well as to destinations in Mexico, Central America, Canada, and the Caribbean [2] Upcoming Earnings Call - Sun Country Airlines will hold its third quarter 2025 earnings call on October 30, 2025, at 10:00 a.m. Eastern Time [1] - Interested investors can access the live call and subsequent replay through the Sun Country investor relations website [1]

Core Insights - Sun Country Airlines (NASDAQ: SNCY) is highlighted as a favored airline stock due to its unique business model and strategic decisions post-pandemic [1]. Company Overview - Sun Country Airlines has opted to expand its scheduled services significantly as part of its post-pandemic strategy [1]. Industry Context - The article emphasizes the growth prospects within the aerospace, defense, and airline sectors, indicating a favorable environment for investment opportunities [1].

Core Insights - The introduction of a new "Plus Status" offering aims to enhance customer loyalty by allowing travelers to earn additional benefits for both flights and everyday purchases [1] Group 1: Offering Details - The "Plus Status" program is designed to provide travelers with extra rewards, which can be accrued not only through air travel but also through regular spending in daily life [1] - This initiative reflects a strategic move to attract and retain customers by integrating travel rewards with everyday consumer behavior [1] Group 2: Market Implications - The launch of the "Plus Status" offering may position the company favorably in a competitive market, as it aligns with current consumer trends that favor loyalty programs that extend beyond traditional travel-related benefits [1] - By enhancing the value proposition for customers, the company could potentially increase its market share and customer engagement in the travel sector [1]

Core Viewpoint - Sun Country Airlines has appointed Wendy Schoppert to its Board of Directors, effective October 1, 2025, bringing extensive experience in various industries [1][4]. Group 1: Board Appointment - Wendy Schoppert will join the Board of Directors of Sun Country Airlines, effective October 1, 2025 [1]. - Schoppert has served as a corporate board director for public and private companies in retail, consumer products, financial services, and health care [2]. - Her previous board roles include positions at The Hershey Company, Bremer Financial Group, and Big Lots, Inc. [2]. Group 2: Executive Experience - Schoppert has nine years of experience at Sleep Number Corporation, where she held senior leadership roles including EVP/Chief Financial Officer and SVP/Chief Information Officer [3]. - She has also held senior roles at U.S. Bank and began her career in the airline industry with American Airlines, Northwest Airlines, and America West Airlines [3]. Group 3: Board Chair and CEO Comments - Jennifer Vogel, Sun Country Board Chair, highlighted Schoppert's financial and governance expertise as exceptional and valuable for the company's future [4]. - Jude Bricker, President and CEO of Sun Country Airlines, emphasized Schoppert's unique position to contribute to the company's success due to her background and early career in the airline industry [4]. Group 4: Company Overview - Sun Country Airlines is a hybrid low-cost air carrier focused on connecting guests to leisure and visiting friends and relatives (VFR) passengers, as well as charter customers [6]. - The company provides cargo service to Amazon and operates flights throughout the United States and to destinations in Mexico, Central America, Canada, and the Caribbean [6].

Core Insights - The Vanguard S&P Small-Cap 600 Value ETF (VIOV) has an implied analyst target price of $105.50 per unit, indicating a potential upside of 11.80% from its recent trading price of $94.37 [1][2][3] Summary by Category ETF Overview - VIOV is currently trading at $94.37, with analysts projecting a target price of $105.50, reflecting an 11.80% upside [2][3] Underlying Holdings - Notable underlying holdings with significant upside potential include: - Minerals Technologies, Inc. (MTX): Recent price of $63.03, target price of $82.00, representing a 30.10% upside [2][3] - Sun Country Airlines Holdings Inc (SNCY): Recent price of $13.11, target price of $16.55, indicating a 26.28% upside [2][3] - Edgewell Personal Care Co (EPC): Recent price of $21.67, target price of $26.00, showing a 19.98% upside [2][3] Analyst Target Price Analysis - The analysis raises questions about whether analysts' targets are justified or overly optimistic, suggesting the need for further investor research into recent company and industry developments [3]

Core Points - Sun Country Airlines announced the appointment of D. Torque Zubeck as Senior Vice President and Chief Financial Officer, effective September 2, 2025 [1] - Zubeck has over 30 years of finance experience, including 22 years in airline leadership roles, and previously served as CFO of Mesa Airlines and held various positions at Alaska Airlines [2][3] - Stephen Coley has been permanently named Senior Vice President and Head of Operations, effective August 13, 2025, after serving as Interim Head of Operations since late April [4][5] - Bill Trousdale will continue as Vice President of FP&A and Treasurer after serving as Interim CFO [7] Company Overview - Sun Country Airlines is a hybrid low-cost air carrier focused on connecting guests to leisure destinations and providing cargo services, particularly to Amazon [8]

Core Insights - Sun Country Airlines reported record GAAP revenue of $263.6 million and adjusted earnings per share of $0.14 for Q2 2025, exceeding Wall Street expectations [1][5] - The airline's cargo operations saw significant growth, contributing to overall profitability despite rising costs in scheduled flights [1][6] Financial Performance - Non-GAAP EPS was $0.14, surpassing the estimate of $0.11 by 26.8%, while GAAP revenue exceeded estimates by 3.0% [1][2] - Year-over-year, adjusted EPS increased by 133.3%, and GAAP revenue rose by 3.6% compared to Q2 2024 [2] - Operating income reached $16.3 million, up 31.5% from the previous year, with an operating margin of 6.2% [2] Business Model and Strategy - Sun Country operates a hybrid business model that includes scheduled flights, charter services, and a growing cargo segment, primarily serving Amazon [3][4] - The focus on expanding cargo operations and optimizing fleet use is central to the company's strategy, allowing flexibility in resource allocation [4] Cargo Operations - Cargo revenue surged by 36.8%, with 15 cargo aircraft in service by the end of the quarter, expected to increase to 20 by Q3 2025 [6][12] - Cargo accounted for approximately 13.2% of total revenue, driven by new contract rates and increased flight hours [6] Scheduled Passenger Services - Scheduled passenger service revenue remained flat at $88.1 million, with a 6.2% reduction in available seat miles to prioritize cargo operations [8] - Despite a decline in scheduled passengers by 9%, total fare per passenger increased by 6.5% [8] Cost Management - Adjusted cost per available seat mile (CASM) rose by 11.3% due to higher fixed costs and increased labor and maintenance expenses [9] - Overall GAAP operating expenses increased by only 2.2%, indicating effective cost control measures [10] Future Outlook - For Q3 2025, the company expects GAAP revenue between $250 million and $260 million, with a system-wide block hours increase of 5% to 8% [12] - Scheduled passenger service capacity is projected to decline by about 10% as cargo growth peaks, with a return to growth in scheduled services anticipated in late 2026 [12]

[Part I. Financial Information](index=3&type=section&id=Part%20I.%20Financial%20Information) [Financial Statements](index=3&type=section&id=Item%201.%20Financial%20Statements) The company's assets and liabilities decreased, while net income grew year-over-year for the six months ended June 30, 2025 [Condensed Consolidated Balance Sheets](index=3&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) Total assets decreased to $1.55 billion while stockholders' equity increased to $613.0 million by June 30, 2025 Condensed Consolidated Balance Sheets | Balance Sheet Item | June 30, 2025 (Unaudited, in thousands) | December 31, 2024 (in thousands) | | :--- | :--- | :--- | | **Total Current Assets** | $222,293 | $266,584 | | **Total Assets** | **$1,552,109** | **$1,630,177** | | **Total Current Liabilities** | $354,702 | $422,290 | | **Total Liabilities** | **$939,064** | **$1,059,804** | | **Total Stockholders' Equity** | **$613,045** | **$570,373** | [Condensed Consolidated Statements of Operations](index=5&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) Operating revenues and net income grew for both the three and six-month periods ending June 30, 2025 Key Operating Metrics | Metric | Q2 2025 (in thousands) | Q2 2024 (in thousands) | Six Months 2025 (in thousands) | Six Months 2024 (in thousands) | | :--- | :--- | :--- | :--- | :--- | | **Total Operating Revenues** | $263,621 | $254,381 | $590,270 | $565,864 | | **Operating Income** | $16,262 | $12,365 | $72,508 | $67,541 | | **Net Income** | $6,577 | $1,812 | $43,112 | $37,125 | | **Diluted EPS** | $0.12 | $0.03 | $0.78 | $0.67 | [Condensed Consolidated Statements of Cash Flows](index=8&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Net cash from operations slightly decreased while cash used in financing and investing activities increased Cash Flow Summary (Six Months Ended June 30) | Cash Flow Activity | 2025 (in thousands) | 2024 (in thousands) | | :--- | :--- | :--- | | **Net Cash Provided by Operating Activities** | $36,252 | $38,872 | | **Net Cash (Used in) Provided by Investing Activities** | $(8,011) | $3,522 | | **Net Cash Used in Financing Activities** | $(75,402) | $(72,037) | | **Net Decrease in Cash, Cash Equivalents and Restricted Cash** | $(47,161) | $(29,643) | [Notes to the Condensed Consolidated Financial Statements](index=9&type=section&id=Notes%20to%20the%20Condensed%20Consolidated%20Financial%20Statements) Notes detail significant cargo service expansion with Amazon, fleet growth, and a new credit facility - The company expanded its cargo operations with Amazon by entering into the Amended and Restated Air Transportation Services Agreement (A&R ATSA), which will increase the number of cargo aircraft operated from 12 to 20; **seven of the eight additional aircraft were received by June 30, 2025**[23](index=23&type=chunk) Revenue by Category (Six Months Ended June 30) | Revenue Category | 2025 (in thousands) | 2024 (in thousands) | | :--- | :--- | :--- | | **Passenger** | $500,556 | $491,059 | | **Cargo** | $62,960 | $49,395 | | **Other** | $26,754 | $25,410 | | **Total Operating Revenues** | **$590,270** | **$565,864** | - As of June 30, 2025, the company's fleet consisted of **69 Boeing 737-NG aircraft**, an increase from 63 aircraft at the same time in 2024, primarily due to additions for cargo operations[35](index=35&type=chunk)[37](index=37&type=chunk) - In March 2025, the company executed a **new $75 million Revolving Credit Facility**, replacing its previous $25 million facility; the company was in compliance with all financial covenants as of June 30, 2025[44](index=44&type=chunk) Segment Performance (Six Months Ended June 30, 2025) | Segment Performance | Passenger (in thousands) | Cargo (in thousands) | | :--- | :--- | :--- | | **Operating Revenues** | $527,310 | $62,960 | | **Operating Income (Loss)** | $68,731 | $3,777 | [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=22&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Revenue growth was driven by expanded cargo services, offsetting higher labor costs with lower fuel expenses [Results of Operations](index=26&type=section&id=Results%20of%20Operations) Revenue increased 4% in the first half of 2025, driven by strong cargo and charter performance - For Q2 2025, Total Operating Revenues **increased 4% YoY**, driven by a **37% increase in Cargo revenue** from the expanded Amazon agreement; this was partially offset by a 1% decrease in Passenger revenue as capacity was shifted to support cargo growth[97](index=97&type=chunk)[100](index=100&type=chunk) - Q2 2025 Aircraft Fuel expense **decreased 19% YoY** due to a 15% decrease in fuel cost per gallon and a 4% decrease in consumption; conversely, Salaries, Wages, and Benefits **increased 13%** due to a 7% increase in headcount and contractual rate increases[104](index=104&type=chunk)[105](index=105&type=chunk) - For the six months ended June 30, 2025, Total Operating Revenues **increased 4% YoY**; the growth was primarily from a **27% increase in Cargo revenue** and an **11% increase in Charter revenue**[118](index=118&type=chunk)[120](index=120&type=chunk)[121](index=121&type=chunk) [Segments Analysis](index=34&type=section&id=Segments) The Cargo segment's operating income improved significantly, while the Passenger segment's income remained stable Segment Performance (Six Months Ended June 30) | Segment Performance | 2025 (in thousands) | 2024 (in thousands) | | :--- | :--- | :--- | | **Passenger Operating Income** | $68,731 | $69,072 | | **Passenger Operating Margin %** | 13.0% | 13.4% | | **Cargo Operating Income (Loss)** | $3,777 | $(1,531) | | **Cargo Operating Margin %** | 6.0% | (3.1)% | - The Cargo segment's operating income **improved by $5.3 million** for the first six months of 2025 compared to 2024, driven by contractual rate increases and the addition of new aircraft under the A&R ATSA with Amazon[140](index=140&type=chunk) [Non-GAAP Financial Measures](index=37&type=section&id=Non-GAAP%20Financial%20Measures) Adjusted Net Income and Adjusted Operating Income showed year-over-year growth Adjusted Net Income Reconciliation (Six Months Ended June 30) | Reconciliation | 2025 (in thousands) | 2024 (in thousands) | | :--- | :--- | :--- | | **Net Income (GAAP)** | $43,112 | $37,125 | | Special Items, net | 1,848 | — | | Stock Compensation Expense | 3,254 | 3,084 | | Other Adjustments | 667 | — | | Income Tax Effect of Adjustments | (1,327) | (709) | | **Adjusted Net Income (Non-GAAP)** | **$47,554** | **$39,500** | CASM Reconciliation (Six Months Ended June 30) | CASM Reconciliation | 2025 (cents) | 2024 (cents) | | :--- | :--- | :--- | | **CASM (GAAP)** | 12.03 | 11.80 | | Less: Aircraft Fuel | 2.68 | 3.14 | | Less: Cargo Expenses & Other Adjustments | 1.56 | 1.38 | | **Adjusted CASM (Non-GAAP)** | **7.79** | **7.28** | [Liquidity and Capital Resources](index=41&type=section&id=Liquidity%20and%20Capital%20Resources) Total liquidity remained stable at $206.6 million, sufficient to fund operations for the next 12 months Liquidity Position | Liquidity Position | June 30, 2025 (in thousands) | December 31, 2024 (in thousands) | | :--- | :--- | :--- | | Cash and Cash Equivalents | $36,964 | $83,219 | | Available-for-Sale Securities | $94,644 | $97,636 | | Amount Available Under Revolving Credit Facility | $75,000 | $24,743 | | **Total Liquidity** | **$206,608** | **$205,598** | - Key uses of cash in the first six months of 2025 included **$21.2 million for capital expenditures**, **$10.0 million for common stock repurchases**, and **$10.5 million for a Tax Receivable Agreement payment**[175](index=175&type=chunk)[179](index=179&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=46&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) Market risks related to fuel prices and interest rates remain materially unchanged from the 2024 annual report - There have been **no material changes in market risk** from those disclosed in the company's 2024 10-K, with primary risks remaining aircraft fuel commodity prices and interest rates[190](index=190&type=chunk) [Controls and Procedures](index=46&type=section&id=Item%204.%20Controls%20and%20Procedures) Management confirmed the effectiveness of disclosure controls and procedures with no material changes to internal controls - The CEO and Interim CFO concluded that the company's **disclosure controls and procedures were effective** as of June 30, 2025[193](index=193&type=chunk) - **No changes occurred** during the quarter ended June 30, 2025, that materially affected, or are reasonably likely to materially affect, the company's internal control over financial reporting[194](index=194&type=chunk) [Part II. Other Information](index=46&type=section&id=Part%20II.%20Other%20Information) [Legal Proceedings](index=46&type=section&id=Item%201.%20Legal%20Proceedings) Current legal proceedings are not expected to have a material adverse effect on the company's financials - The company does not expect current legal proceedings to have a **material adverse effect** on its financial condition or results[195](index=195&type=chunk) [Risk Factors](index=46&type=section&id=Item%201A.%20Risk%20Factors) No material changes to risk factors have been identified since the 2024 annual report - **No material changes** have been identified from the risk factors disclosed in the 2024 10-K[196](index=196&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=46&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) The company reported no unregistered sales of equity securities during the period - The company reported **no unregistered sales of equity securities** during the period[197](index=197&type=chunk) [Defaults Upon Senior Securities](index=47&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) The company reported no defaults upon its senior securities - The company reported **no defaults upon senior securities**[198](index=198&type=chunk) [Other Information](index=47&type=section&id=Item%205.%20Other%20Information) No directors or executive officers made changes to Rule 10b5-1 trading plans during the quarter - **No directors or executive officers** adopted, terminated, or modified any Rule 10b5-1 trading plans during the second quarter of 2025[200](index=200&type=chunk) [Exhibits](index=48&type=section&id=Item%206.%20Exhibits) The report includes required exhibits such as officer certifications and XBRL data files - Exhibits filed with the report include **officer certifications (31.1, 31.2, 32)** and **Inline XBRL documents (101 series)**[204](index=204&type=chunk)

Financial Data and Key Metrics Changes - The company reported its twelfth consecutive quarter of profitability, achieving a total revenue of $263.6 million, which is 3.6% higher than 2024 despite a 0.5% decrease in total block hours [14][15] - The GAAP pretax margin was 3.2%, and the adjusted pretax margin was 3.9%, marking the third consecutive quarter of total revenue growth year-over-year and improvement in pretax margin [14] - Total operating expenses grew by 2.2% with adjusted CASM increasing by 11.3%, heavily impacted by a 6.2% decline in scheduled service ASMs [18][19] Business Line Data and Key Metrics Changes - Revenue from the passenger segment, including scheduled and charter services, decreased by 0.8% year-over-year, primarily due to reduced scheduled service operations [15] - Scheduled service TRASM increased by 3.7%, with total fare rising by 6.5%, offsetting a 1.3 percentage point decline in load factor [16] - Charter revenue grew by 6.4% to $54.3 million, supported by a 7.9% increase in charter block hours [16][17] - Cargo revenue surged by 36.8% to $34.8 million, marking the highest quarterly cargo revenue in the company's history [17] Market Data and Key Metrics Changes - The company expects third quarter total revenue to be between $250 million and $260 million, with block hours projected to increase by 5% to 8% [21] - The anticipated Q3 fuel cost per gallon is $2.61, with an expected operating margin of 36% [21] Company Strategy and Development Direction - The company aims to grow its cargo business significantly, expecting to double cargo revenue once additional aircraft reach mature utilization [7][11] - The strategy includes maintaining a flexible capacity allocation between segments to maximize profitability and minimize earnings volatility [21] - The company is focused on organic growth opportunities and maintaining a strong balance sheet to capitalize on potential disruptions in the industry [33][34] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving approximately $1.5 billion in revenue, $300 million in EBITDA, and $2.5 in EPS by 2027, contingent on fleet utilization and demand [11][12] - The management noted that the current operating environment remains strong, with bookings showing year-over-year improvements in unit revenue [51][56] - There are expectations of a potential shakeup in the low-cost carrier space, with the company prepared to act on asset acquisitions or organic growth opportunities [66][68] Other Important Information - The company has a total liquidity of $206.6 million and plans to pay down an additional $44 million in debt by the end of the year [19][21] - The company does not anticipate purchasing additional aircraft until 2027 and beyond, focusing instead on optimizing current resources [19][20] Q&A Session Summary Question: Can you discuss the path to $2.50 EPS and its dependence on industry conditions? - Management indicated that long-term revenue forecasts include a general inflation tailwind of about 3% and are based on stable utilization and growth assumptions [23][24] Question: How is the peak season shaping up for Amazon revenues? - Management noted delays in asset utilization and entry into service dates, affecting the fleet's commitment [26] Question: What is the strategy regarding industry capacity and potential opportunities? - The company plans to execute well and remain nimble, focusing on organic growth opportunities as they arise [33][34] Question: Can you provide insights on margin improvement and cargo ramp-up? - Management expects the fourth quarter to be a good measurement point for cargo ramp-up, with pilot availability being a key factor [39][42] Question: How do you view the competitive landscape and capacity trends? - Management observed that many airlines are not extending schedules past January, leading to a favorable capacity environment for the company [82]