Sun Country Airlines at J.P. Morgan Conference: Strategic Revenue Diversification

On Tuesday, 11 March 2025, Sun Country Airlines (NASDAQ: SNCY) presented at the J.P. Morgan Industrials Conference 2025, offering insights into its strategic revenue diversification. CFO Dave Davis outlined the airline’s unique business model, highlighting both its strengths and challenges. While the company revised its Q1 revenue guidance slightly downward, it emphasized its robust financial position and strategic flexibility.

Key Takeaways

• Sun Country Airlines’ revenue is diversified across scheduled service, charter, and cargo operations.
• The company plans to expand its cargo operations with Amazon, doubling revenue in this segment by 2025.
• Projected revenue mix by 2026 is 60% scheduled service and 40% from cargo and charter.
• Q1 2025 revenue guidance was revised to $325 million - $330 million.
• Sun Country maintains a strong balance sheet with a net debt to EBITDA ratio of 2x.

Financial Results

• Scheduled service revenue accounted for about 70% of 2024 total revenue.
• Charter business revenue was approximately $200 million, representing 20% of total revenue.
• Cargo revenue is expected to roughly double in 2025, driven by an expanded Amazon partnership.
• By 2026, contracted cargo and charter revenue is projected to represent 40% of total revenue.
• The company has improved its pretax margin performance, ranking among the highest in recent years.
• Q1 2025 revenue guidance was revised downward to $325 million - $330 million, with operating income margin expected at the lower end of $17 million - $21 million.

Operational Updates

• Sun Country operates a fleet of mid-life 737-800s, with 45 aircraft for passenger service and 20 for Amazon cargo.
• The airline serves 116 routes across 102 airports, focusing on peak demand periods.
• The partnership with Amazon will expand to operate 20 narrow-body freighters by the end of 2025.
• The airline’s scheduling strategy prioritizes maximizing unit revenues over aircraft utilization.

Future Outlook

• Sun Country plans to integrate and optimize its expanded cargo fleet in 2025.
• Passenger growth is expected to resume in 2026, with a projected ASM increase of at least 30% by 2029 without additional CapEx.
• The company will continue sourcing mid-life 737NGs from the used market and managing aircraft assets to minimize costs.
• Sun Country aims to maintain standalone profitability across all segments, avoiding reliance on aggressive growth targets.

Q&A Highlights

• Margin improvements from the Amazon deal are expected to be fully realized by Q4 2025 or Q1 2026.
• Sun Country is not restricted by exclusivity with Amazon and can pursue other cargo opportunities.
• The airline’s reliability is a key competitive advantage in its partnership with Amazon.
• Sun Country plans to scale operations in response to market demand, including parking aircraft during downturns.

In conclusion, Sun Country Airlines’ presentation at the J.P. Morgan Industrials Conference 2025 highlighted its strategic focus on revenue diversification and operational efficiency. For more detailed insights, readers are invited to refer to the full transcript.

Full transcript - J.P. Morgan Industrials Conference 2025:

James Kirby: Good afternoon, everyone. My name is James Kirby. I work with Jimmy Baker covering airlines here, second to last presentation of the day. Happy to welcome Sun Country Airlines to the stage, represented by CFO, Dave Davis.

Dave Davis, CFO, Sun Country Airlines: Thanks. Thanks for having us here, inviting us to the conference and importantly for picking up coverage on us, I guess, a month or two ago now. So what I have here is sort of a collection of slides. The first few are a description of the airline. We’re relatively small carrier.

So I thought it always is a good idea to explain a little bit about who we are and what we do, and then I’ll get into sort of the most recent developments at the company. A lot of good stuff happening for Sun Country. This is just an overview of our business. So the business model is sort of truly unique, at least among U. S.

Airlines, in a number of different ways. One of them is the diversification of our revenue streams, and they’re actually getting more diverse. So we operate through three different lines of business. These are the revenues of those three different lines in 2024. This will be evolving a little bit over the next year.

Our scheduled service business was about 70% of our revenue. So basically low cost leisure focused airline with a very flexible scheduling model centered at on putting capacity during periods of peak demand. The second biggest piece of the business was our charter business, about $200,000,000 in revenue, about 20% of our 2024 revenue, using the exact same aircraft that are used in our scheduled service business, but it’s basically charter flying. MLS is our biggest customer. We do a lot of casino flying, military, college football, that kind of thing.

And then we have a cargo operation. It’s 12 aircraft today. We have one customer, it’s Amazon. We’ve been flying these freighters for Amazon, since 2020. This piece of the business is sort of changing very rapidly in 2025 because we’re adding eight additional aircraft, roughly doubling the revenue from our cargo business this year.

In addition to sort of the different business lines that we operate, another unique thing about the model is that we share all resources across all three segments. So whether it’s scheduled service charter cargo, it’s all 737NGs. At this point, it’s all 737800s. The pilots are scheduled seamlessly from one segment to another segment, could be in the same trip. Charter segment, scheduled service segment and so forth.

All the IT, the maintenance programs, all that are shared across all three different lines of business, so keeps costs low. I’ll get into this a little bit more as we move forward. So the business model has been really successful since we first put it in place. The company was purchased by Apollo actually in 2018 when the current management team showed up. This has been sort of the track record from a revenue perspective since then.

Essentially, we’ve about doubled in size since the acquisition took place. We expect to grow again here in 2025, obviously, a dip during COVID, but basically very steady growth over this period. This is a little bit complicated, but the story isn’t just one of revenue growth, but it’s also one of basically in 2018, this company had the lowest margin of the 11 publicly traded airlines, now I guess 10 with Hawaiian run away. But we had the lowest margins in that year. We basically steadily improved margins over the period.

The solid line is us, our pretax margins. And then the gray area is basically everybody else from the worst in the industry on the bottom to the best in the industry on the top. So we were the most profitable airline in the country in 2021, dipped a little bit in 2022 after we signed a new pilot deal, most profitable airline in the country in 2023. And then last year, we were just behind Delta and United in terms of pretax profitability. So, so far, the model has proven successful, resilient and driving steady growth and strong profitability.

The diversification, which I think everybody is sort of striving for these days, is built into the model. So in 2019, we had a scheduled service business, three quarters of our revenue and a charter business was a quarter of our revenue. We added the cargo business in 2020 that grew to about 10% of our revenue. By 2026, roughly 60% of the revenue of the company will be basically traditional scheduled service stuff, 40% will come from either our cargo business or our charter business. So very diversified stream of revenues.

I’ll talk more about these segments in a minute, but the cargo and the charter stuff is under long term contract. So the revenue streams are very stable, very predictable. We have no fuel exposure in our cargo business because it’s all paid for by Amazon. All the fuel in the charter business is basically set at an indexed price. If fuel goes up or down, the rates that we get paid by our charter customers goes up or down.

So basically 40% of our capacity by 2026 will be perfectly hedged for fuel costs. So the diversification has not only led to superior profitability, but it’s led to stability, at the company. So this is the number of consecutive quarters of profitability that we’ve had relative to our peers in The U. S. Industry.

We had one blip in the second quarter of twenty twenty two right after we signed a new pilot deal where we had a small loss. But since then, it’s been ten consecutive quarters of profitability. We fully expect to have 11 consecutive quarters of profitability when we report first quarter results. It’s really only Delta that’s on par with us and everybody else is sort of in a different place. So again, diversified revenue streams, solidly profitable and consistently profitable is sort of the hallmark of the model that we built.

Yes, exactly. Exactly. We didn’t have their most recent quarter, so it could have been profitable. You know what I mean? Who knows?

This is our scheduled service route network. So let me talk about each of the segments in a little bit more detail. So this is 2024. We operate at 116 routes serving 102 airports. This is factually accurate.

What’s misleading about it is the business is not designed to maximize aircraft utilization, and therefore minimize CASM. It’s designed to maximize unit revenues. So we fly aircraft during periods in geographies when demand is strongest and unit revenues are strongest, And we park aircraft, we move aircraft to our charter business during periods of lower demand. So instead of our aircraft utilization averaging twelve, thirteen hours a day, it averages seven or eight hours a day. We pay a little bit of a CASM penalty, but we more than make up for it in superior unit revenues.

This shows all the routes we fly. I think it says on the bottom here, well under 2% of our routes are daily year round. So again, highly seasonal network. This is just a graph that shows the distribution at a high level of the number of seats that we have in the market at any one time. So the orange line is us.

We get, I guess, lumped in with the other ULCCs, but really our scheduled service business model is the flip, the opposite of those models. They operate a much flatter schedule, trying to maximize aircraft utilization. It does bring CASM down, as I said, but you’re flying a lot of off peak periods with very low unit revenues. Our model is what you see here on the orange line. So twice as many seats in the market, and let’s say, July or March as we have in May or September period.

This level of variability would be sort of difficult to deal with were it not for the diversification of the model, because you layer this high variability in the scheduled service side on top of a very, very stable cargo business, which is repeatable month after month and a charter business, which we can drive to be countercyclical, filling in valleys in the scheduled service business with more ad hoc charter flying. MSP is our largest operation. It’s where our scheduled service business is centered. Since 2018, we’ve roughly doubled our seat share out of point of origin traffic out of Minneapolis. So that’s basically gone from 11% or 12% up to a little more than 20%.

Our biggest competitor in that market is, everybody knows, Delta, one of their major hubs. They basically stayed flat over that period and all of our share gains have come from everybody else. So ULCCs have gotten a lot smaller in the market. Legacies have gotten a bit smaller. So really, we’ve been very successful at capturing share in our home market.

A little bit more about our charter business. About 75% of the revenue in the charter business is under long term contracts. Our biggest customers are MLS, so we do all the charter flying for Major League Soccer. Caesars is a big customer of ours. We do a lot of casino flying for them to their Non Vegas properties.

You can see some of the other ones here. The unique aspect of this charter business is it uses the exact same aircraft as the scheduled service business, which means the exact same interior configuration, same pilots, same everything else, so that it can be scheduled interchangeably with the scheduled service business. We’ve had a lot of success here in recent years of driving unit revenues measured on a dollar per block hour basis, up. So you can see the significant improvement between ’23 and ’24 in the revenue from our charter business on a per hour basis. This is just a bit of an example of how this airline schedules and why we can make what could be an unprofitable operation a profitable one.

So what this just demonstrates is a typical schedule for us, like one pattern would be Minneapolis to Fort Lauderdale scheduled service segment selling passenger tickets. We pick up the MLS team in Fort Lauderdale, fly it to Charlotte, drop it off, fly a scheduled service segment from Charlotte to Minneapolis with passengers on board, then reverse the pattern back, pick up the team in Charlotte, fly them back to Miami, then back to Minneapolis. So it’s a typical pattern. These are just some estimates on the right hand side. If we were just a charter carrier trying to ferry somebody from Fort Lauderdale to Charlotte, we had to deadhead the aircraft.

We had lower utilization than we do, so probably be a 5% margin business. We estimate this segment is sort of about a 20% margin piece of business when integrated with the rest of our network. On the Amazon front, so we’ve been operating, as I said, twelve seven thirty seven-eight hundred freighters for Amazon since 2020 when we ramped up very quickly. It’s been a great piece of business for us. We signed a new agreement with Amazon in June of last year of twenty four to bring on an additional eight aircraft.

So by the end of twenty five, we’ll have all 20 narrow bodies that Amazon operates in The U. S. One of the beauties of this business is it is basically zero CapEx. So it’s a lot of growth with no capital investment. Amazon controls the aircraft.

They sublet the aircraft to us at no cost. So it’s just a CMI business. As I said before, consistent scheduling sort of smooths the peaks and valleys of our scheduled service business. When we signed this new deal, it was a revised agreement. We extended the term out to 02/1930.

We revised our economics, to reflect basically the higher cost environment that we’re operating in these days as opposed to 2020. The profitability of this business is roughly on par with our passenger business. So at this point, we’re largely indifferent between growing this or growing the passenger business. So this may dovetail nicely with sort of some of the guidance changes and other things that we’re sort of seeing in the macro environment. But basically given that we’re trying to go from 12 to 20 aircraft in a very short period of time, literally from March to September of twenty twenty five, we want to bring all these aircraft in.

It drives massive growth, requires basically all the pilots that the airline can produce in order to support this level of growth for Amazon. So essentially, what our passenger business looks like is on the left hand side. We grew in the first quarter block hours by 9% or so. Beginning in April, significant passenger capacity comes out of the market. Our charter business will stay flat.

So all this reduction is basically in the scheduled service side of the business. We’ll obviously pull out the lowest contributing routes, which should drive which should lead to significant unit revenue improvements. But you can see sort of the pattern here of reduction in our passenger business over this time. For the full year, we’re probably looking at, I don’t know, 2% to 4% total growth when you look at growth in the first quarter and shrinking at the rest of the year. One of the other things that’s setting up really nicely about the model right now is the way our fleet is set up.

So our fleet strategy is midlife 737NGs. We have no order book. All the aircraft that we have, all the aircraft that we have sourced come from the used market. We have about 45 aircraft in our passenger service fleet. We’ll have the 20 Amazon aircraft, and then we had seven, now six aircraft that we own that we have on lease to two other carriers.

Those aircraft come back to us in late twenty five into ’26. So once we get through all the Amazon growth and we resume passenger growth, these aircraft start to reenter our fleet. Between these aircraft coming into our fleet and a bit of improved utilization, we think we can grow passenger ASMs between 2628%, twenty nine % by at least 30% with no additional CapEx investment. So the Amazon aircraft don’t require any CapEx. There’s not a need for additional aircraft CapEx for a number of years because we have these aircraft returning to us that we now have on lease to others.

Our CapEx spend was modest in 2024. It will continue to be modest for the next several years. I showed you before how profitable the business is. This is our CapEx profile, so the result is significant free cash flow generation that we expect to see going forward. The balance sheet at the company is pretty competitive.

We finished 2024 with net debt to EBITDA ratio of two times. We’re amortizing a lot of debt in 2025 so that we should assuming everything stays okay in the macro environment, we should de lever even more in 2025 and in the year well below two times levered. So profitable business, strong free cash flow and a very conservative balance sheet. We’ve also paid down a lot of debt in the last several years. Our current estimate is we have about $500,000,000 in unencumbered asset value at this point.

Free cash flow generation, we expect to be really strong. This is just free cash flow conversion, so how much of our EBITDA do we convert to cash? This is us last year. We kind of lumped everybody together here. But if you look at legacies and LCCs, you can see their free cash flow conversion and then ULCCs are in a bit of a different spot.

But again, a lot of cash flow generation at the business and a lot of our earnings turn into cash. From a uses of cash perspective, as I said, 2025 is a year of rapid debt amortization. We had an active buyback program in place. We did a little more buying back in February of outstanding shares. I mentioned we were owned by Apollo for a number of years.

They did their last sell down in February, so just last month, so they’re totally out of the stock. There’s no more overhang from our private equity owners, and we bought a piece of that sell down. So our diluted share count has sort of been dropping for the last several years. Again, just sort of in summary here, we think we’ve built a differentiated, stable, unique model in The U. S.

Industry, diversified revenue streams, a high piece of our business is contracted. We know how much it’s going to be. We know what the rates are. Resiliency through business cycles, as you can see by our number of quarters of consistent profitability, strong balance sheet, strong free cash flow, limited CapEx and stable earnings. So we think we’ve got a durable and sustainable model here.

I think we threw one last slide in just to talk a bit about first quarter guidance. So we’re not completely immune from what others have seen here in the last few months. So we made a relatively modest change to our Q1 guidance. Our original revenue guidance for the first quarter was to generate $330,000,000 to $340,000,000 of revenue. We now see that coming in somewhere between $325,000,000 and $330,000,000 Fuel is a little bit better than we originally thought.

Our operating income margin, we guided to $17,000,000 to $21,000,000 given some of this revenue weakness. We see that coming in sort of towards the lower end of that range, effective tax rates unchanged and then a little bit smaller from a block hour perspective than we had originally planned. So like I said, we and I can talk more about this if there’s any questions, but we saw a little bit of some of the same trends in February in particular that others have seen, but we think our guidance revision is relatively modest.

Unidentified speaker: Fuel number still seems elevated. Is there something unique about heavy sources or

Dave Davis, CFO, Sun Country Airlines: Yes. So I think there’s probably a little bit of upside, good, good guy in our fuel number that we have on here. I think there’s still some good guy. We will pay more for fuel than others. So basically, what drives that is we do a lot of fuel purchasing at FBOs for the charter business.

We get reimbursed for that when it’s higher, but it shows up in our average fuel price. So that drives fuel probably $0.1 to $0.2 per gallon differential to what you would see from sort of other folks. So that is better the prepared slides. If there’s any questions, I’m happy to answer them.

James Kirby: I mean, just going back to the pretax margin profile of the business, I believe cargo is expected to double in revenue by this time next year. Can you just walk us through the bridge from now until then in terms of margin acquisitions given the peelback in scheduled service, but the ramp in cargo?

Dave Davis, CFO, Sun Country Airlines: Yes. So if you can go and sort of look at our revenue per block hour on the cargo business, let’s say, in Q4 of ’twenty four relative to Q4 of ’twenty three, and that’s up significantly. So the cadence of changes in our cargo margin, when we signed the new deal with Amazon in June of twenty four, we got an immediate increase in basically the rate that we get paid. Another increase happened at year end when we just saw our annual increases, 3% to 5%, so relatively modest. That’s basically what’s driving some of the improvement you can see now.

Then when we get to seventeenth aircraft, which is probably May, we’ll see another improvement. When we get to twentieth aircraft, which probably August, September, we’ll see the final improvement. So basically, the full margin improvement with everything in should be largely in by Q4, maybe into Q1 of twenty twenty six. It was one of our objectives when we signed up to new airplanes was that we weren’t going to take any sort of a profitability hit by growing the cargo business as opposed to growing the passenger business. So we needed those two segments to be on par from a profitability perspective, and that’s where we think we’ve gotten.

James Kirby: Got it. Thanks. I guess a similar question, but for 2026 in terms of thinking about the puts and takes for margin expansion, scheduled service will be back in the growth mode if you take back the lease fleet you have now. Charter still mostly contracted. But we’re really kind of put to take some margin expansion next year once you’re kind of at a normalized run rate as a business.

Dave Davis, CFO, Sun Country Airlines: So some of the stuff that we’re cutting so for I mean, the lowest hanging fruit is probably some of the stuff that we’re having to cut out in 2025. So a lot of the add back would just be adding back the profitable capacity that we’ve had to cut in 2025 because of the Amazon stuff. There are some unique reasons we can’t grow both of them. It’s pilot related, which I can go into, a little bit complicated. But, so that’s the biggest piece of margin expansion.

Then, again, there’s sort of no CapEx required. We have relatively low aircraft ownership costs. We think there’s a bit more growth for us in Minneapolis and a few more share points to be had. And there’s plenty of other opportunities for us to take this model of just peak flying and move aircraft around through the year that we think we’ve got some profitable margin expanding growth in front of us for a number of years to come.

Unidentified speaker: Couple of questions on Amazon. Is there any exclusivity language in the contract that would prevent you from doing similar cargo work outside of the Amazon ecosystem? That’s the first question.

Dave Davis, CFO, Sun Country Airlines: Yeah. The answer is no. It there there’s not there’s no exclusivity.

Unidentified speaker: And, you know, considering that others also fly for Amazon, are you confident you’re the low cost producer for them, or does that not really matter within the context of these business relationships? I’m not I’m kind of confident. You know, I used to have a regional perspective, and I was like, okay, Atlantic Coast isn’t gonna be able to underbid Skyway you know, that that sort of thing.

Dave Davis, CFO, Sun Country Airlines: This is how I would how I would characterize it. Price is important to Amazon. And obviously, as everybody knows, skilled negotiators, they wanna they they are they are concerned about our costs and and pricing. I would say significantly more important than that is reliability. So, we haven’t seen them shy away from paying up if you are reliable.

We have a matrix that penalizes us if we miss and rewards us if we if we exceed. So they’re willing to pay if you’re reliable. I think the cost to run this network relative to their getting a package to you in a day is infinitesimal. So that’s kind of the behavior we’ve seen.

Unidentified speaker: And then a question on consolidation, and I want to ask it in a way that encourages you to actually provide an answer. But, you know, there are other seven thirty seven and g operators out there. I know based on past precedent, anytime I ask an airline about consolidation, they say, oh, we look at everybody and all that, you know, it’s kind of a canned response. So I’m going to ask the question a little bit differently. What about your business model would not lend itself to m and a?

Yeah.

Dave Davis, CFO, Sun Country Airlines: I think there’s a lot of aspects that would make us fit well with others, but the thing about the business model that some that may be complex to some others is probably the cargo business. And and the reason I say that is because it’s unique and it’s not like it plugs into someone else’s cargo business in a significant way. It would just be something that is new. I think the charter and the other airlines do charter flying schedule service business could fit in well and then we would fit in best with other carriers that schedule in a similar way to us. You know, that said, Alaska just bought Hawaiian.

Hawaiian’s got a big Amazon deal. So, you know, I don’t know, but that’s probably the thing that comes comes to mind.

Unidentified speaker: Good answer. So just looking at this page, your model is working. The rest of the discount side of the equation in The U. S. Is not working, but you’ve figured out your niche.

Scott Kirby was up here earlier today talking about where lower cost airlines or lower fare airlines, where they’ve gone astray. So when you look at Sun Country sort of runway for future growth, Is there any reason to think that you could go astray? I mean, what is that opportunity for you to grow with the assets and the aspirations that you have? How long is that runway?

Dave Davis, CFO, Sun Country Airlines: Yeah. Let me start off by saying this way. What we’ve tried to purposely do is build a business model that doesn’t rely on relentless growth in order to be profitable. So it’s not like this it’s not like the company has to clock in 15% annual growth rates just to keep our head above water from a profitability perspective. Each of these segments is standalone profitable.

Together, they are more profitable. I think there’s each of them has more growth opportunity for us, and we’ll pick and choose depending on where the opportunities are. Over the long run, there’s probably more cargo growth for us. That’s not going to happen for a while because we want to get back to focusing on the passenger business. Some of our competitors in the charter business, have gone away bankrupt and liquidated.

Others have sort of gotten out of the business, so that business is strong. There’s more long term stuff we can do there. Then on the passenger side, we don’t need to go into a city and dominate the market in order to become profitable. We don’t need to go into a city and do strategic flying for some number of years, you know, before before the routes mature. The model takes airplanes, moves them around from city to city.

We fly during periods of peak demand and move them out. We have an operation in Dallas. We fly there June, July, and August. We fly people from Central Texas to The Caribbean and Mexico, then we leave. We do stuff in Milwaukee in the winter.

We fly people south, then the schedule gets trimmed back. There’s a lot of those opportunities across The U. S. The biggest constraint for us has been internal constraints, pilot production and other things that have kept us from growing faster. I think there’s a lot of opportunities for us.

I don’t think you’re going to see us get out over our skis in terms of crazy growth because we’re profitability driven. Do you

Unidentified speaker: track Breezelakes to site number of city pairs where their model works? Do you track it the same way for where the Sun Country model works on the passenger side?

Dave Davis, CFO, Sun Country Airlines: Broadly. I I I would say it’s more tactical than that. You know what I mean? There’s a handful of places. I mean, we’re we’re growth capped in 2025 because we’re doing everything we can on the Amazon front.

2026 is adding back most of the stuff we cut in 2025. We’ll see what 2027 looks like. There’s plenty of places for us to keep pumping out 10% -ish kind of growth.

Unidentified speaker: I’m wondering if you could tell us a little bit about your engine strategy. You probably observed there’s, I don’t know, probably twenty, twenty five seven thirty seven gliders around where the owners have taken the engines off and just put the engines lease in park planes. Generally, they’re freighter airplanes kind of a scramble to find overhaul capacity. The cost of overhauling engines is quite a bit more expensive than it was a couple of years ago. I’m sure you put some thought into that with a fleet of 50 airplanes.

Dave Davis, CFO, Sun Country Airlines: Yes. So that’s a great question because it’s one of the biggest challenges that we sort of face right now. We haven’t done an engine overhaul, like a full performance restoration kind of a thing for at least three years, maybe four years. We are super active in asset management. So buying midlife aircraft, buying engines, running those aircraft and engines out to the end of their life, then tearing them down.

We tore down our first airframe last year, we’ll do another one this year. That’s how we sort of run the fleet. Key to that is a continued supply of engines. They’re out there, but they’re more expensive than they were before. We just bought one, you know, that said, a few days ago.

We’ll continue to be on the hunt, but we probably need five to seven engines a year. And like I said, they’re there. They’re just more expensive. So if we can’t get them at the prices we want, we’re just going to have to deal with higher costs. But acquiring Green Time engines is important to the model.

Unidentified speaker: Now that Apollo is gone, are there any projects that Sun Country might want to do that may not have occurred when Apollo had its ownership? It’s sort of like a bucket list of stuff out there.

Dave Davis, CFO, Sun Country Airlines: You know, there there really isn’t. I mean, part of it is so Apollo has been off of our board for about two years. They want to when they bought Atlas, they went off our board. So they really haven’t been active at all for the last couple years. They’ve been basically passive shareholders.

James Kirby: I think I’ll take last question here unless there’s any more. But just given the presentations from earlier today and the guidances that associate with them, What does Sun Country look like in a in a recession? You know, it’s been a short life as a public company, but what are the, you know, what are the optionality given the unique business model you have

Dave Davis, CFO, Sun Country Airlines: in a recession? The the the answer to that is straightforward. We have low cost assets. These assets are designed to justify themselves with only peak flying. The answer is in a recession, we’re going to get smaller.

A lot of our fleet today is parked on Tuesday and Wednesday because people don’t start or end vacations on Tuesdays and Wednesdays, and we’re all leisure traffic. So what we do is we get smaller. It’s we’ll match the size of this airline to the demand environment. And if that means parking aircraft, if it means tearing aircraft down, if it’s longer term, that’s how we’ll respond to sustained reductions in demand.

James Kirby: Great. I think that’s it. Thank you, Dave.

Dave Davis, CFO, Sun Country Airlines: Thanks,

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