Holiday air travel prices rise, and Sun Country execs say flights are filling

Expect pricier flights this holiday season, Sun Country Airlines executives said Tuesday, as it and other airlines are now encountering passenger demand that's growing faster than they can keep up.

"What we're seeing is a winter travel season from Thanksgiving to Easter, which looks as good as we've ever seen," Jude Bricker, Sun Country's chief executive, said as the Twin Cities-based airline announced its latest results.

The company's profit in July through September far surpassed last year's, when flying was curtailed by the coronavirus pandemic. More encouraging for the airline, third-quarter revenue beat the same period of 2019, the first time that's happened in the comeback of air travel.

The predictability of Sun Country's charter and cargo business positively offset the impact that the delta variant of COVID-19 had on customer demand, executives said.

They said they'll focus on scheduling service during peak travel days during the fourth quarter, which includes the holiday season. They also expect Sun Country's cargo business with Amazon to be the strongest since it began in mid-2020.

But executives also indicated difficulties keeping up with the resurgence of travelers. They forecast that Sun Country's flying capacity, measured in the number of available seat miles, would be 8% to 11% below where it was in the last three months of 2019. It was 16% below the 2019 level in the just-completed quarter.

"We would add a lot more capacity if we had the ability to do so going into the winter season," Bricker said.

Sun Country's shares fell about 4% as investors absorbed the outlook.

The company added two planes in the third quarter, bringing its passenger fleet to 35 aircraft. Part of its capacity constraint is related to labor. Executives said they face tight competition to hire pilots.

As a result, demand may outweigh supply into the holidays. "If you're out there buying tickets, it's going to be pretty expensive these days," Bricker said.

As well, Sun Country, as a government contractor, faces federal requirements that its employees be vaccinated against COVID-19. It is working with existing employees to verify their vaccination status, but they don't expect that to produce any change in operational capacity.

Sun Country said it earned $13.9 million, or 23 cents a share, in the third quarter. That compares with $2.9 million, or 6 cents a share, a year ago.

Revenue was $174 million, more than double its year-ago level, and up 1% from the same period of 2019. Operating expenses were 6% below the 2019 level.