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目錄
美國
證券交易委員會
華盛頓特區20549
表格 10-Q
☑根據1934年證券交易法第13或15(d)節的季度報告
截至季度結束日期的財務報告2024年9月30日
或者
☐根據1934年證券交易法第13或15(d)節的轉型報告書
委員會文件號 001-40217
SNYC 1.jpg
Sun Country Airlines Holdings, Inc.
(根據其章程規定的註冊人準確名稱)
特拉華州82-4092570
（設立或組織的其他管轄區域）（納稅人識別號碼）
2005 Cargo Road，明尼阿波利斯，MN 55450
562-9447（更改 前名稱或地址，如果自上次報告以來發生更改。）, 明尼蘇達州
55450
，（主要行政辦公地址）(郵政編碼)
公司電話號碼，包括區號：（651) 681-3900
在法案第12(b)條的規定下注冊的證券：
每一類的名稱交易代碼在其上註冊的交易所的名稱
普通股，每股面值0.01美元SNCY
納斯達克證券交易所 LLC
請在檢查標記處註明註冊人（1）是否已在證券交易法第13或15（d）條所規定的過去12個月（或註冊人需要提交此類報告的較短期間）內提交了所有必須提交的報告，並且（2）自過去90天以來一直受到此類提交要求的限制。
是 ☑否☐
在檢查標記中表明註冊人是否已經在過去的12個月內（或者爲註冊人需要提交這些文件的較短期間）根據S-T法規405規定，遞交了每個互動數據文件。
是 ☑否☐
請在檢查標記中表明註冊人是一個大型加速文件提交人、一個加速文件提交人、一個非加速文件提交人、一個較小的報告公司，還是一個新興成長公司。請參閱《證券交易法1934年規則120億.2》中「大型加速文件提交人」、「加速文件提交人」、「較小報告公司」和「新興成長公司」的定義。
大型加速提交者 ☑
加速審核員 ☐
非加速申報人☐
小型報告公司☐
新興成長公司 ☐
如果是新興成長型企業，請勾選複選標記，表明註冊者已選擇不使用延長過渡期來符合根據證券交易法第13(a)條規定提供的任何新財務會計準則。 ☐
請在複選標誌處註明公司是否爲殼公司（根據交易所法令第12b-2條的定義）。
是的 ☐ 沒有☑
截至2024年9月30日，每類普通股的流通股數爲：
普通股，每股面值$0.01 – 52,939,832股已流通

目錄
Sun Country Airlines Holdings, Inc.
10-Q表格
目錄
頁面
-2-
目錄
第一部分. 財務信息
項目1.基本報表
Sun Country航空公司控股有限公司
簡明合併資產負債表
(除每股和股數外均爲千美元)
2024年9月30日2023年12月31日
(未經審計)
資產
流動資產：
現金及現金等價物$56,791 $46,279 
限制性現金10,649 17,401 
投資89,697 141,127 
應收賬款，減去$的信用損失準備金103 和 $17 的壞賬準備
37,806 38,166 
短期租賃商維護按金7,147 1,046 
存貨，減去$的過時準備金731 和 $977 的壞賬準備
9,731 7,793 
預付費用13,226 15,823 
其他流動資產977 3,716 
總流動資產226,024 271,351 
物業及設備，淨值：
飛機和飛行設備721,269 685,559 
持用於經營租賃的飛機和飛行設備154,175 154,185 
地面設備和租賃改善 45,283 39,847 
電腦硬件和軟件21,498 17,875 
融資租賃資產338,875 304,384 
易耗品26,307 19,848 
固定資產總額1,307,407 1,221,698 
累計折舊及攤銷(314,309)(252,717)
固定資產總額，淨額993,098 968,981 
其他資產：
商譽222,223 222,223 
其他無形資產，淨值扣除累計攤銷金額 $28,487 和 $24,190 的壞賬準備
79,255 83,551 
Operating Lease Right-of-use Assets17,539 14,917 
飛機存款8,974 9,564 
長期出租者維修存款50,511 44,675 
其他資產12,238 8,365 
其他資產總額390,740 383,295 
總資產$1,609,862 $1,623,627 
參見隨附的簡明合併財務報表附註
-3-
目錄
Sun Country航空公司控股有限公司
簡明合併資產負債表
(除每股和股數外均爲千美元)
2024年9月30日2023年12月31日
(未經審計)
負債和股東權益
流動負債:
應付賬款$49,223 $59,011 
應計工資、工資和福利32,740 33,305 
應計運輸稅14,734 18,097 
航空交通責任131,538 157,996 
融資租賃的義務42,212 44,756 
忠誠計劃責任9,852 9,898 
經營租賃義務3,161 2,219 
長期債務的流動部分，淨額75,915 74,177 
所得稅應收協議責任9,544 3,250 
其他流動負債11,905 15,873 
總流動負債380,824 418,582 
長期負債:
融資租賃的義務256,252 232,546 
忠誠計劃負債4,330 3,839 
經營租賃義務18,214 16,611 
長期債務淨額275,864 327,468 
遞延所得稅負債19,588 9,148 
所得稅應收協議責任88,150 97,794 
其他長期負債14,094 3,236 
總長期負債676,492 690,642 
總負債1,057,316 1,109,224 
承諾和附帶條件（請參見 注10)
股東權益：
普通股，面值爲$0.01每股面值，995,000,000 59,282,838和頁面。58,878,723已發行 52,939,832和頁面。53,291,001 分別爲2024年9月30日和2023年12月31日的未清償金額
593 589 
首選股，每股0.01每股面值，5,000,000 否 而9月30日和2023年12月31日分別發行和流通的股份
— — 
截至2024年3月31日和2023年12月31日，公司的庫藏股票分別有2,279,784股和2,693,653股。6,343,006和頁面。5,587,722 分別持有於2024年9月30日和2023年12月31日
(105,899)(94,341)
資本公積金524,138 513,988 
未分配利潤133,696 94,229 
累計其他綜合收益（損失）18 (62)
股東權益總計552,546 514,403 
負債和股東權益總計$1,609,862 $1,623,627 
See accompanying Notes to Condensed Consolidated Financial Statements
-4-
Table of Contents
SUN COUNTRY AIRLINES HOLDINGS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Dollars in thousands, except per share and share amounts)
(Unaudited)
Three Months Ended September 30,Nine Months Ended September 30,
2024202320242023
Operating Revenues:
Passenger$207,764 $214,355 $698,823 $709,490 
Cargo29,165 26,059 78,560 74,437 
Other12,541 8,462 37,951 20,150 
Total Operating Revenues249,470 248,876 815,334 804,077 
Operating Expenses:
Aircraft Fuel54,737 61,179 187,229 185,829 
Salaries, Wages, and Benefits80,919 72,541 242,516 223,890 
Aircraft Rent— 22 — 2,281 
Maintenance15,973 15,330 50,129 44,311 
Sales and Marketing7,748 7,569 26,819 26,005 
Depreciation and Amortization23,754 22,762 71,194 64,577 
Ground Handling11,568 9,382 32,090 28,299 
Landing Fees and Airport Rent15,979 13,958 44,431 36,847 
Other Operating, net26,410 27,127 81,003 81,663 
Total Operating Expenses237,088 229,870 735,411 693,702 
  Operating Income12,382 19,006 79,923 110,375 
Non-operating Income (Expense):
Interest Income1,659 2,480 5,907 7,766 
Interest Expense(11,049)(11,403)(33,238)(31,272)
Other, net12 (15)55 (370)
Total Non-operating Expense, net(9,378)(8,938)(27,276)(23,876)
  Income Before Income Tax3,004 10,068 52,647 86,499 
  Income Tax Expense662 2,477 13,180 19,963 
  Net Income$2,342 $7,591 $39,467 $66,536 
Net Income per share to common stockholders:
Basic$0.04 $0.14 $0.75 $1.19 
Diluted$0.04 $0.13 $0.72 $1.12 
Shares used for computation:
Basic52,876,339 55,435,386 52,866,797 56,051,173 
Diluted54,780,672 58,595,646 54,990,437 59,281,819 
See accompanying Notes to Condensed Consolidated Financial Statements
-5-
Table of Contents
SUN COUNTRY AIRLINES HOLDINGS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(Dollars in thousands)
(Unaudited)

Three Months Ended September 30,Nine Months Ended September 30,
2024202320242023
Net Income$2,342 $7,591 $39,467 $66,536 
Other Comprehensive Income:
Net unrealized gains on Available-for-Sale securities, net of deferred tax expense of $77, $46, $24, and $90, respectively
235 158 80 301 
Other Comprehensive Income 235 158 80 301 
Comprehensive Income$2,577 $7,749 $39,547 $66,837 

See accompanying Notes to Condensed Consolidated Financial Statements
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SUN COUNTRY AIRLINES HOLDINGS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY
(Dollars in thousands, except share amounts)
(Unaudited)
Nine Months Ended September 30, 2024
WarrantsCommon StockTreasury StockAdditional Paid-in CapitalRetained
Earnings		Accumulated Other Comprehensive (Loss) IncomeTotal
SharesAmountSharesAmount
December 31, 20233,224,093 58,878,723 $589 5,587,722 $(94,341)$513,988 $94,229 $(62)$514,403 
Stock Issued for Stock-Based Awards— 75,606 1 — — 110 — — 111 
Common Stock Repurchases and Excise Tax— — — 755,284 (11,596)— — — (11,596)
Net Income— — — — — — 35,313 — 35,313 
Amazon Warrants189,652 — — — — 1,400 — — 1,400 
Stock-based Compensation— — — — — 1,514 — — 1,514 
Other Comprehensive (Loss)— — — — — — — (139)(139)
March 31, 20243,413,745 58,954,329 $590 6,343,006 $(105,937)$517,012 $129,542 $(201)$541,006 
Stock Issued for Stock-Based Awards— 195,760 2 — — 587 — — 589 
Common Stock Repurchases, Excise Tax— — — — 23 — — — 23 
Net Income— — — — — — 1,812 — 1,812 
Amazon Warrants252,869 — — — — 1,867 — — 1,867 
Stock-based Compensation— — — — — 1,570 — — 1,570 
Other Comprehensive (Loss)— — — — — — — (16)(16)
June 30, 20243,666,614 59,150,089 $592 6,343,006 $(105,914)$521,036 $131,354 $(217)$546,851 
Stock Issued for Stock-Based Awards— 132,749 1 — — 212 — — 213 
Common Stock Repurchases, Excise Tax— — — — 15 — — — 15 
Net Income— — — — — — 2,342 — 2,342 
Amazon Warrants189,652 — — — — 1,400 — — 1,400 
Stock-based Compensation— — — — — 1,490 — — 1,490 
Other Comprehensive Income— — — — — — — 235 235 
September 30, 20243,856,266 59,282,838 $593 6,343,006 $(105,899)$524,138 $133,696 $18 $552,546 
Nine Months Ended September 30, 2023
WarrantsCommon Stock Treasury StockAdditional Paid-in CapitalRetained
Earnings 		Accumulated Other Comprehensive (Loss) IncomeTotal
SharesAmountSharesAmount
December 31, 20222,402,268 58,217,647 $582 892,409 $(17,605)$488,494 $22,048 $(807)$492,712 
Stock Issued for Stock-Based Awards— 147,105 2 — — 554 — — 556 
Net Stock Settlement of Stock-Based Awards— — — 406 (8)— — — (8)
Common Stock Repurchases and Excise Tax— — — 1,230,932 (22,549)7,501 — — (15,048)
Net Income— — — — — — 38,328 — 38,328 
Amazon Warrants189,652 — — — — 1,400 — — 1,400 
Stock-based Compensation— — — — — 2,678 — — 2,678 
Other Comprehensive Income— — — — — — — 389 389 
March 31, 20232,591,920 58,364,752 $584 2,123,747 $(40,162)$500,627 $60,376 $(418)$521,007 
Stock Issued for Stock-Based Awards— 187,975 2 — — 613 — — 615 
Common Stock Repurchases and Excise Tax— — — 416,751 (7,511)— — — (7,511)
Net Income— — — — — — 20,618 — 20,618 
Amazon Warrants252,869 — — — — 1,867 — — 1,867 
Stock-based Compensation— — — — — 4,415 — — 4,415 
Other Comprehensive (Loss)— — — — — — — (246)(246)
June 30, 20232,844,789 58,552,727 $586 2,540,498 $(47,673)$507,522 $80,994 $(664)$540,765 
Stock Issued for Stock-Based Awards— 262,412 2 — — 1,414 — — 1,416 
Common Stock Repurchases and Excise Tax— — — 2,140,790 (33,008)— — — (33,008)
Net Income— — — — — — 7,591 — 7,591 
Amazon Warrants189,652 — — — — 1,400 — — 1,400 
Stock-based Compensation— — — — — 1,039 — — 1,039 
Other Comprehensive Income— — — — — — — 158 158 
September 30, 20233,034,441 58,815,139 $588 4,681,288 $(80,681)$511,375 $88,585 $(506)$519,361 
See accompanying Notes to Condensed Consolidated Financial Statements
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SUN COUNTRY AIRLINES HOLDINGS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Dollars in thousands)
(Unaudited)
Nine Months Ended September 30,
20242023
Net Income$39,467 $66,536 
Adjustments to reconcile Net Income to Cash from Operating Activities:
Depreciation and Amortization71,194 64,577 
Deferred Income Taxes10,414 18,080 
Other, net7,409 14,433 
Changes in Operating Assets and Liabilities:  
Accounts Receivable5,947 (7,083)
Inventory(3,254)(1,478)
Prepaid Expenses2,597 (1,929)
Lessor Maintenance Deposits(12,766)(8,689)
Aircraft Deposits— (482)
Other Assets(1,683)70 
Accounts Payable(8,544)(5,855)
Accrued Transportation Taxes(3,363)(4,872)
Air Traffic Liabilities(26,458)(27,542)
Loyalty Program Liabilities446 (1,590)
Operating Lease Obligations(1,454)(3,858)
Other Liabilities(5,649)2,333 
Net Cash Provided by Operating Activities74,303 102,651 
Cash Flows from Investing Activities:  
Purchases of Property & Equipment(42,615)(210,641)
Purchases of Investments(55,655)(82,574)
Proceeds from the Maturities of Investments107,750 110,850 
Other, net11,458 4,087 
Net Cash Provided by (Used in) Investing Activities20,938 (178,278)
Cash Flows from Financing Activities:  
Common Stock Repurchases(11,493)(55,051)
Proceeds from Borrowings10,000 119,200 
Repayment of Finance Lease Obligations(26,249)(16,390)
Repayment of Borrowings(60,776)(35,475)
Other, net(2,963)(1,665)
Net Cash (Used in) Provided by Financing Activities(91,481)10,619 
Net Increase (Decrease) in Cash, Cash Equivalents and Restricted Cash3,760 (65,008)
Cash, Cash Equivalents and Restricted Cash--Beginning of the Period63,680 102,928 
Cash, Cash Equivalents and Restricted Cash--End of the Period$67,440 $37,920 
Non-cash transactions:
Aircraft Acquired under Finance Lease$40,116 $— 
Aircraft Acquired from the Exercise of Finance Lease Purchase Option, net of Accumulated Depreciation$11,634 $2,386 
Changes to Finance Lease Assets due to Lease Modifications$6,513 $26,427 
The following provides a reconciliation of Cash, Cash Equivalents and Restricted Cash to the amounts reported on the Condensed Consolidated Balance Sheets:
September 30, 2024September 30, 2023
Cash and Cash Equivalents$56,791 $26,967 
Restricted Cash10,649 10,953 
Total Cash, Cash Equivalents and Restricted Cash$67,440 $37,920 

See accompanying Notes to Condensed Consolidated Financial Statements
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SUN COUNTRY AIRLINES HOLDINGS, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in thousands, except per share and share amounts)
(Unaudited)
1.    BASIS OF PRESENTATION
Sun Country Airlines Holdings, Inc. (together with its consolidated subsidiaries, "Sun Country" or the "Company") is the parent company of Sun Country, Inc., which is a certificated air carrier providing scheduled passenger service, air cargo service, charter air transportation and related services.
The Company has prepared the unaudited Condensed Consolidated Financial Statements according to U.S. Generally Accepted Accounting Principles (“GAAP”) and has included the accounts of Sun Country Airlines Holdings, Inc. and its subsidiaries. Certain information and footnote disclosures normally included in the audited annual financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to the rules and regulations of the U.S. Securities and Exchange Commission ("SEC") for Form 10-Q. Therefore, the accompanying unaudited Condensed Consolidated Financial Statements of Sun Country Airlines Holdings, Inc. should be read in conjunction with the Consolidated Financial Statements contained in the Company's Annual Report on Form 10-K for the year ended December 31, 2023 as filed with the SEC ("2023 10-K"). Management believes that all adjustments necessary for the fair presentation of results, consisting of normally recurring items, have been included in the unaudited Condensed Consolidated Financial Statements for the interim periods presented. All material intercompany balances and transactions have been eliminated in consolidation.
The preparation of financial statements in accordance with GAAP requires management to make certain estimates and assumptions that affect the reported amounts of assets and liabilities, revenues and expenses, and the disclosure of contingent assets and liabilities at the date of the financial statements. Actual results could differ from those estimates.
Due to impacts from seasonal variations in the demand for air travel, the volatility of aircraft fuel prices, the impact of macroeconomic conditions, and other factors, operating results for the nine months ended September 30, 2024 are not necessarily indicative of operating results for other interim periods or for the full year ending December 31, 2024.
2.    REVENUE
Sun Country is a certificated air carrier generating Operating Revenues from Passenger (consisting of Scheduled Service, Charter, and Ancillary), Cargo and Other revenue. Scheduled Service revenue mainly consists of base fares. Charter revenue is primarily generated through service provided to the U.S. Department of Defense ("DoD"), collegiate and professional sports teams, and casinos. Ancillary revenues consist of revenue earned from air travel-related services, such as: baggage fees, seat selection fees, other fees and on-board sales. Cargo consists of revenue earned from flying cargo aircraft for Amazon.com Services, Inc. (together with its affiliates, “Amazon”) under the Amended and Restated Air Transportation Services Agreement (the “A&R ATSA”). Other revenue consists primarily of revenue from services in connection with Sun Country Vacations products and rental revenue related to certain aircraft-related transactions where the Company serves as a lessor. The Company recognized rental revenue of $10,092 and $5,870, during the three months ended September 30, 2024 and 2023, respectively; and $29,240 and $11,742 during the nine months ended September 30, 2024 and 2023, respectively.
In June 2024, the Company entered into the A&R ATSA with Amazon that will increase the number of 737-800 cargo aircraft that Sun Country operates on behalf of Amazon from 12 to 20. The A&R ATSA includes revised economics to reflect the higher-cost environment that has ensued since the original Air Transportation Services Agreement ("ATSA") was signed in December 2019. The A&R ATSA contains three performance obligations: Flight Services, Heavy Maintenance and Fuel; all of which are unchanged from the original ATSA. The first additional aircraft is expected to begin service in the first quarter of 2025, and all
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SUN COUNTRY AIRLINES HOLDINGS, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in thousands, except per share and share amounts)
(Unaudited)
eight aircraft are expected to be operational by the end of the third quarter of 2025. The A&R ATSA includes an initial six-year term, which expires in October 2030. The agreement includes two additional, two-year renewal terms exercisable at Amazon's option, and a subsequent three-year renewal term subject to mutual written agreement, which, if not agreed to, will trigger a final two-year wind-down term. The Company did not receive any material financial reimbursements for start-up costs incurred in connection with the incremental aircraft. The warrant agreement was not amended in connection with the A&R ATSA, Amazon did not receive any additional warrants in connection with the A&R ATSA. Accordingly, warrants issued to Amazon will continue to vest in accordance with the terms of the warrant agreement executed in December 2019.
The significant categories comprising Operating Revenues are as follows:
Three Months Ended September 30,Nine Months Ended September 30,
2024202320242023
Scheduled Service$83,784 $96,483 $313,056 $360,607 
Charter 50,769 47,437 149,090 143,250 
Ancillary73,211 70,435 236,677 205,633 
   Passenger207,764 214,355 698,823 709,490 
Cargo29,165 26,059 78,560 74,437 
Other12,541 8,462 37,951 20,150 
Total Operating Revenues$249,470 $248,876 $815,334 $804,077 
The Company attributes and measures its Operating Revenues by geographic region as defined by the United States Department of Transportation ("DOT") for airline reporting based upon the origin of each passenger and cargo flight segment.
The Company’s operations are highly concentrated in the U.S., but include service to many international locations, primarily consisting of scheduled service to Latin America and military charter service to various international destinations.
Total Operating Revenues by geographic region are as follows:
Three Months Ended September 30,Nine Months Ended September 30,
2024202320242023
Domestic$245,722 $242,504 $783,834 $767,509 
Latin America3,748 6,372 31,500 36,078 
Other— — — 490 
Total Operating Revenues$249,470 $248,876 $815,334 $804,077 
Contract Balances
The Company’s contract assets relate to costs incurred to prepare the Amazon cargo aircraft for service under the original ATSA and the A&R ATSA, as well as warrants that have vested and will be amortized against Cargo revenue over the remaining term of the A&R ATSA. The balances are included in Other Current Assets and Other Assets on the Condensed Consolidated Balance Sheets.
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SUN COUNTRY AIRLINES HOLDINGS, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in thousands, except per share and share amounts)
(Unaudited)
The Company’s contract liabilities are comprised of: 1) ticket sales for transportation that have not yet been provided (reported as Air Traffic Liabilities on the Condensed Consolidated Balance Sheets), 2) outstanding loyalty points that may be redeemed for future travel and other non-air travel awards (reported as Loyalty Program Liabilities on the Condensed Consolidated Balance Sheets) and, 3) the Amazon Deferred Up-front Payment received under the original ATSA (reported within Other Current Liabilities and Other Long-term Liabilities on the Condensed Consolidated Balance Sheets).
Contract Assets and Liabilities are as follows:
September 30, 2024December 31, 2023
Contract Assets
Amazon Contract$2,100 $1,493 
Total Contract Assets$2,100 $1,493 
Contract Liabilities
Air Traffic Liabilities$131,538 $157,996 
Loyalty Program Liabilities14,182 13,737 
Amazon Contract1,681 2,225 
Total Contract Liabilities$147,401 $173,958 
The balance in the Air Traffic Liabilities fluctuates with seasonal travel patterns. Most tickets can be purchased no more than twelve months in advance, therefore any revenue associated with tickets sold for future travel will be recognized within that timeframe. For the nine months ended September 30, 2024, $153,708 of revenue was recognized in Passenger revenue that was included in the Air Traffic Liabilities as of December 31, 2023.
Loyalty Program
The Sun Country Rewards program provides loyalty awards to program members based on accumulated loyalty points. The Company records a liability for loyalty points earned by passengers under the Sun Country Rewards program using two methods: 1) a liability for points that are earned by passengers on purchases of the Company’s services is established by deferring revenue based on the redemption value, net of estimated loyalty points that will expire unused, or breakage; and 2) a liability for points attributed to loyalty points issued to the Company’s Visa card holders is established by deferring a portion of payments received from the Company’s co-branded agreement. The balance of the Loyalty Program Liabilities fluctuates based on seasonal patterns, which impacts the volume of loyalty points awarded through travel or issued to co-branded credit card and other partners (deferral of revenue) and loyalty points redeemed (recognition of revenue). Due to these reasons, the timing of loyalty point redemptions can vary significantly.
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SUN COUNTRY AIRLINES HOLDINGS, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in thousands, except per share and share amounts)
(Unaudited)
Changes in the Loyalty Program Liabilities are as follows:
20242023
Balance – January 1$13,737 $15,437 
Loyalty Points Earned6,573 6,209 
Loyalty Points Redeemed (1)
(6,128)(7,799)
Balance – September 30
$14,182 $13,847 
______________________
(1)Loyalty points are combined in one homogenous pool, which includes both air and non-air travel awards, and are not separately identifiable. As such, the revenue recognized is comprised of points that were part of the Loyalty Program Liabilities balance at the beginning of the period, as well as points that were earned during the period.
3.    EARNINGS PER SHARE
The following table sets forth the computation of basic and diluted earnings per share:
Three Months Ended September 30,Nine Months Ended September 30,
2024202320242023
Numerator:
  Net Income$2,342 $7,591 $39,467 $66,536 
Denominator:
  Weighted Average Common Shares Outstanding - Basic52,876,339 55,435,386 52,866,797 56,051,173 
  Dilutive effect of Stock Options, RSUs and Warrants1,904,333 3,160,260 2,123,640 3,230,646 
  Weighted Average Common Shares Outstanding - Diluted54,780,672 58,595,646 54,990,437 59,281,819 
Basic earnings per share$0.04 $0.14 $0.75 $1.19 
Diluted earnings per share$0.04 $0.13 $0.72 $1.12 

The Company has excluded 4,805,638 and 4,631,203 of stock options, RSUs and warrants that would have had an anti-dilutive effect on its diluted earnings per share calculation for the three and nine months ended September 30, 2024, respectively. The Company's anti-dilutive shares for the three and nine months ended September 30, 2023 were not material to the Condensed Consolidated Financial Statements.
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SUN COUNTRY AIRLINES HOLDINGS, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in thousands, except per share and share amounts)
(Unaudited)
4. AIRCRAFT
As of September 30, 2024, Sun Country's fleet consisted of 63 Boeing 737-NG aircraft, comprised of 58 Boeing 737-800s and five Boeing 737-900ERs.
The following tables summarize the Company’s aircraft fleet activity for the nine months ended September 30, 2024 and 2023, respectively:
December 31, 2023
AdditionsReclassificationsRemovals
September 30, 2024
Passenger:
Owned291 1 — 

31
Finance leases131 (1)— 13
Sun Country Airlines’ Fleet422 — — 44
Cargo:
Aircraft Operated for Amazon12 — — — 12
Other:
Owned Aircraft Held for Operating Lease5 — — — 5
Subleased Aircraft (1)
1 1 — — 2
Total Aircraft 603 — — 63
December 31, 2022AdditionsReclassificationsRemovalsSeptember 30, 2023
Passenger:
Owned29 1 — (1)29 
Finance leases11 — 2 — 13 
Operating leases2 — (2)— — 
Sun Country Airlines’ Fleet42 1 — (1)42 
Cargo:
Aircraft Operated for Amazon12 — — — 12 
Other:
Owned Aircraft Held for Operating Lease— 5 — — 5 
Total Aircraft 54 6 — (1)59 
(1)
The head leases associated with these subleases are classified as finance leases.
During the nine months ended September 30, 2024, the Company acquired one incremental owned aircraft and took control of two aircraft through finance lease arrangements, one of which was subsequently subleased to the same unaffiliated airline to whom we subleased another aircraft during the year ended December 31, 2023. During the nine months ended September 30, 2024, amendments were executed to extend the lease expiry terms for both subleased aircraft through the fourth quarter of 2025. Upon expiry of these subleases, both aircraft will be redelivered to the Company and are expected to be inducted into the Company's passenger fleet. Further, the Company purchased one aircraft previously classified as a finance
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SUN COUNTRY AIRLINES HOLDINGS, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in thousands, except per share and share amounts)
(Unaudited)
lease, which is now unencumbered. Of the 36 Owned aircraft and Owned Aircraft Held for Operating Lease as of September 30, 2024, 31 aircraft were financed and five aircraft were unencumbered. In October 2024, the Company purchased an aircraft previously classified as a finance lease, which is now unencumbered.
During the nine months ended September 30, 2023, the Company acquired five 737-900ERs that are currently on lease to an unaffiliated airline ("Owned Aircraft Held for Operating Lease"). The Owned Aircraft Held for Operating Lease are financed through a term loan arrangement. See Note 6 within Part II, Item 8 in our 2023 10-K for more information on this transaction. Additionally, during the nine months ended September 30, 2023, the Company acquired an incremental aircraft and executed a lease amendment to purchase two aircraft at the end of its lease term. The lease amendment modified the classification of this lease from an operating lease to a finance lease and has an expiration date in fiscal year 2024. During the three months ended September 30, 2023, management approved a plan to retire an owned aircraft. Certain parts of the aircraft were maintained for future use by the Company or held for sale. The impact of the retirement and the assets held for sale were not material to the Company's Condensed Consolidated Financial Statements.
Depreciation, amortization, and rent expense on aircraft are as follows:
Three Months Ended September 30,Nine Months Ended September 30,
Aircraft StatusExpense Type2024202320242023
OwnedDepreciation$14,011 $14,395 $42,519 $40,709 
Finance LeasedAmortization5,666 5,183 16,833 14,741 
Operating Leased
Aircraft Rent (1)
— 22 — 2,281 
$19,677 $19,600 $59,352 $57,731 
(1)
Aircraft Rent expense includes credits for the amortization of over-market liabilities established on April 11, 2018 ("the Acquisition Date").
5.    DEBT
Credit Facilities
On February 10, 2021, the Company executed a five-year credit agreement (the “Credit Agreement”) with a group of lenders. The Credit Agreement includes a $25,000 Revolving Credit Facility (the "Revolving Credit Facility") and a $90,000 Delayed Draw Term Loan Facility (“DDTL”), which are collectively referred to as the “Credit Facilities.” The Credit Agreement includes financial covenants that require a minimum trailing 12-month EBITDAR of $87,700 and minimum liquidity, as defined within the Credit Agreement, of $30,000 at the close of any business day. The Company was in compliance with these covenants as of September 30, 2024.
Due to previous transactions which utilized the DDTL and the subsequent repayment, no amounts under the DDTL were available to the Company as of September 30, 2024. As of September 30, 2024, the Company had $24,743 of financing available through the Revolving Credit Facility, as $257 had been pledged to support letters of credit.
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SUN COUNTRY AIRLINES HOLDINGS, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in thousands, except per share and share amounts)
(Unaudited)
Long-term Debt
Term Loan Credit Facility
During the nine months ended September 30, 2023, the Company executed a term loan credit facility with a face amount of $119,200 for the purpose of financing the five Owned Aircraft Held for Operating Lease. The loan is repaid monthly through March 2030. During the lease term, payments collected from the lessee are applied directly to the repayment of principal and interest on the term loan credit facility. The Owned Aircraft Held for Operating Lease, as well as the related lease payments received from the lessee, are pledged as collateral.
The interest rate on the term loan credit facility is determined using a base rate, which resets monthly, plus an applicable margin, and a fixed credit spread adjustment of 0.1%. The applicable margin during the lease term is fixed at 3.75%, and is subsequently reduced to 3.25% once the aircraft have been redelivered to the Company and a Loan-to-Value ("LTV") ratio calculation is completed. The interest rate in effect as of September 30, 2024 was 8.8%. To the extent that the LTV ratio exceeds 75% at the end of the lease term, a principal prepayment will be required in order to reduce the ratio to 75%. If at any point within 12 months of the end of the lease term for each respective aircraft the Company deems it probable that a principal prepayment will be required in order to reduce the LTV ratio to 75%, and such amount can be reasonably estimated, the estimated principal prepayment amount will be reclassified from Long-term Debt, net to Current Maturities of Long-term Debt, net on the Company's Condensed Consolidated Balance Sheets. In the event a principal prepayment is required, amounts received under the end of lease maintenance compensation clause will be applied towards any prepayment obligation. No amounts related to an estimated principal prepayment have been reclassified from Long-term Debt, net to Current Maturities of Long-term Debt, net on the Company's Condensed Consolidated Balance Sheets as of September 30, 2024.
Pass-Through Trust Certificates
During March 2022, the Company arranged for the issuance of Class A and Class B certificates (the "2022-1 EETC") in an aggregate face amount of $188,277 for the purpose of financing or refinancing 13 aircraft. The Company is required to make bi-annual principal and interest payments each March and September, through March 2031. These notes bear interest at an annual rate between 4.84% and 5.75%. The weighted average interest rate was 4.30% as of September 30, 2024.
In December 2019, the Company arranged for the issuance of Class A, Class B and Class C trust certificates Series 2019-1 (the “2019-1 EETC”), in an aggregate face amount of $248,587 for the purpose of financing or refinancing 13 aircraft, which was completed in 2020. The Company is required to make bi-annual principal and interest payments each June and December, through December 2027. These notes bear interest at an annual rate between 4.13% and 6.95%. The weighted average interest rate was 5.05% as of September 30, 2024.
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SUN COUNTRY AIRLINES HOLDINGS, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in thousands, except per share and share amounts)
(Unaudited)
Long-term Debt includes the following:
September 30, 2024December 31, 2023
 2019-1 EETC (see terms and conditions above)$119,208 $138,423 
 2022-1 EETC (see terms and conditions above)138,532 158,775 
Term Loan Credit Facility (see terms and conditions above)97,124 108,442 
  Total Debt354,864 405,640 
Less: Unamortized debt issuance costs(3,085)(3,995)
Less: Current Maturities of Long-term Debt, net(75,915)(74,177)
Total Long-term Debt, net$275,864 $327,468 
Future maturities of the outstanding Debt are as follows:
Debt Principal
Payments		Amortization of Debt
Issuance Costs		Net Debt
Remainder of 2024
$24,719 $(277)$24,442 
202580,169 (956)79,213 
202661,087 (709)60,378 
202765,111 (525)64,586 
202836,299 (337)35,962 
Thereafter87,479 (281)87,198 
Total as of September 30, 2024
$354,864 $(3,085)$351,779 
The fair value of Debt was $338,425 as of September 30, 2024 and $383,061 as of December 31, 2023. The fair value of the Company’s debt was based on the discounted amount of future cash flows using the Company’s end-of-period estimated incremental borrowing rate for similar obligations. The estimates were primarily based on Level 3 inputs.
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SUN COUNTRY AIRLINES HOLDINGS, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in thousands, except per share and share amounts)
(Unaudited)
6. INVESTMENTS
A summary of debt securities by major security type:
September 30, 2024
Amortized CostGross Unrealized GainsGross Unrealized LossesFair Value
Available-for-Sale Securities: (1)
Corporate Debt Securities$52,908 $66 $(14)$52,960 
U.S. Government Agency Securities30,349 7 (36)30,320 
Total $83,257 $73 $(50)$83,280 
December 31, 2023
Amortized CostGross Unrealized GainsGross Unrealized LossesFair Value
Available-for-Sale Securities: (1)
Municipal Debt Securities$6,981 $— $(5)$6,976 
Corporate Debt Securities59,222 76 (50)59,248 
U.S. Government Agency Securities68,118 23 (125)68,016 
Total $134,321 $99 $(180)$134,240 
(1)
The Company also holds Certificates of Deposit that are included in Investments on the Condensed Consolidated Balance Sheets totaling $6,417 and $6,887 as of September 30, 2024 and December 31, 2023, respectively.
As of September 30, 2024, the unrealized losses were the result of increases in market interest rates and were not the result of a deterioration in the credit quality of the securities. The Company believes that any unrealized losses are recoverable prior to the investment's conversion to cash.
7.    FAIR VALUE MEASUREMENTS
The following table summarizes the assets measured at fair value on a recurring basis:
September 30, 2024
Level 1Level 2Level 3Total
Cash & Cash Equivalents$56,791 $— $— $56,791 
Available-for-Sale Securities:
Corporate Debt Securities— 52,960 — 52,960 
U.S. Government Agency Securities— 30,320 — 30,320 
Total Available-for-Sale Securities— 83,280 — 83,280 
Total Assets Measured at Fair Value on a Recurring Basis$56,791 $83,280 $— $140,071 
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SUN COUNTRY AIRLINES HOLDINGS, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in thousands, except per share and share amounts)
(Unaudited)

December 31, 2023
Level 1Level 2Level 3Total
Cash & Cash Equivalents$46,279 $— $— $46,279 
Available-for-Sale Securities:
Municipal Debt Securities— 6,976 — 6,976 
Corporate Debt Securities— 59,248 — 59,248 
U.S. Government Agency Securities— 68,016 — 68,016 
Total Available-for-Sale Securities— 134,240 — 134,240 
Total Assets Measured at Fair Value on a Recurring Basis$46,279 $134,240 $— $180,519 
8.    INCOME TAXES
The Company's effective tax rate for the three and nine months ended September 30, 2024 was 22.0% and 25.0%, respectively. The Company's effective tax rate for the three and nine months ended September 30, 2023 was 24.6% and 23.1%, respectively. The effective tax rate represents a blend of federal and state taxes and includes the impact of certain nondeductible or nontaxable items. The change in the effective tax rate during the three and nine months ended September 30, 2024 was due to the impact of permanent stock compensation items on the effective rate.
Tax Receivable Agreement
The total Tax Receivable Agreement ("TRA") balance as of September 30, 2024 and December 31, 2023 was $97,694 and $101,044, of which $9,544 and $3,250 was current, respectively. The TRA liability is an estimate and actual amounts payable under the TRA could differ from this estimate. During the nine months ended September 30, 2024 and 2023, the Company made payments of $3,350 and $2,425, respectively, to the pre-IPO stockholders (the “TRA holders”), which includes certain members of the Company's management and certain members of the Company's Board of Directors. The payment is included within Financing Activities on the Condensed Consolidated Statements of Cash Flows. Payments will be made in future periods as attributes that existed at the time of the IPO (the “Pre-IPO Tax Attributes”) are utilized.
9.    STOCKHOLDERS' EQUITY
Equity Transactions
Common Stock Repurchases
The Company maintains a stock repurchase program, which has no expiration date and may be modified, suspended, or terminated by the Company's Board of Directors at any time. As of September 30, 2024, the Company did not have any remaining amount of Board authorization to repurchase shares of its Common Stock.
During the nine months ended September 30, 2024, the Company completed open market repurchases for 755,284 shares of its Common Stock at a total cost of $11,493, or an average price of $15.22 per share. During the nine months ended September 30, 2023, the Company repurchased 3,307,541 shares of its Common Stock at an average price of $16.64 per share. The repurchases were part of a secondary public offering of the Company's shares by the Apollo Stockholder, as well as open market purchases. The
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SUN COUNTRY AIRLINES HOLDINGS, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in thousands, except per share and share amounts)
(Unaudited)
settlement of a $25,000 Accelerated Share Repurchase Program occurred during January 2023, upon which the Company received an additional 480,932 shares.
Amazon Agreement
On December 13, 2019, the Company signed a six-year contract with Amazon to provide cargo services under the ATSA. In connection with the ATSA, the Company issued warrants to Amazon to purchase an aggregate of up to 9,482,606 shares of common stock at an exercise price of approximately $15.17 per share. During the nine months ended September 30, 2024 and 2023, 632,173 warrants vested in each period. As of September 30, 2024 and 2023, the cumulative vested warrants held by Amazon were 3,856,266 and 3,034,441, respectively. The exercise period of these warrants is through the eighth anniversary of the issue date.
No incremental warrants were issued, nor was the original warrant agreement modified, upon the signing of the A&R ATSA. For more information on the A&R ATSA, see Note 2.
Stock Compensation
During the first quarter of 2024, the Company issued performance-based restricted stock units (“PRSUs”) to certain employees. The PRSUs are long-term incentive opportunities that represent the right to receive shares of the Company’s Common Stock based on the achievement of certain performance conditions over a three-year period. Potential payouts range from 50%-150% of a target level. The maximum number of shares that may be issued on the PRSU vesting date is 255,057. The Company recognizes PRSU stock compensation expense to the extent it is probable the performance condition(s) will be satisfied.
10.    COMMITMENTS AND CONTINGENCIES
The Company has contractual obligations and commitments primarily with regard to lease arrangements, repayment of debt (see Note 5), payments under the TRA (see Note 8), and probable future purchases of aircraft.
The Company is subject to an audit by the Internal Revenue Service (“IRS”) related to the collection of federal excise taxes on optional passenger seat selection charges covering the period of October 1, 2021 through June 30, 2023. During 2024, the Company received an assessment of approximately $2,700 from the IRS related to the results of the audit. The Company has appealed the results of the audit through a formal protest with the IRS. The Company believes a loss in this matter is not probable and has not recognized a loss contingency as of September 30, 2024.
The Company is subject to various legal proceedings in the normal course of business and expenses legal costs as incurred. Management does not believe these proceedings will have a materially adverse effect on the Company.
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SUN COUNTRY AIRLINES HOLDINGS, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in thousands, except per share and share amounts)
(Unaudited)
11.    OPERATING SEGMENTS
The following tables present financial information for the Company’s two operating segments: Passenger and Cargo.
 Three Months Ended September 30, 2024Three Months Ended September 30, 2023
PassengerCargoConsolidatedPassengerCargoConsolidated
Operating Revenues$220,305 $29,165 $249,470 $222,817 $26,059 $248,876 
Non-Fuel Operating Expenses154,911 27,440 182,351 142,045 26,646 168,691 
Aircraft Fuel54,701 36 54,737 61,157 22 61,179 
Total Operating Expenses209,612 27,476 237,088 203,202 26,668 229,870 
Operating Income (Loss)$10,693 $1,689 12,382 $19,615 $(609)19,006 
Interest Income1,659 2,480 
Interest Expense(11,049)(11,403)
Other, net12 (15)
Income Before Income Tax$3,004 $10,068 
 Nine Months Ended September 30, 2024Nine Months Ended September 30, 2023
PassengerCargoConsolidatedPassengerCargoConsolidated
Operating Revenues$736,774 $78,560 $815,334 $729,640 $74,437 $804,077 
Non-Fuel Operating Expenses469,824 78,358 548,182 428,889 78,984 507,873 
Aircraft Fuel187,185 44 187,229 185,770 59 185,829 
Total Operating Expenses657,009 78,402 735,411 614,659 79,043 693,702 
Operating Income (Loss)$79,765 $158 79,923 $114,981 $(4,606)110,375 
Interest Income5,907 7,766 
Interest Expense(33,238)(31,272)
Other, net55 (370)
Income Before Income Tax$52,647 $86,499 
12.    SUBSEQUENT EVENTS
The Company evaluated subsequent events for the period from the Balance Sheet date through October 30, 2024, the date that the Condensed Consolidated Financial Statements were available to be issued.
***
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SUN COUNTRY AIRLINES HOLDINGS, INC
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
(Dollars in thousands, except per share amounts)
(Unaudited)
ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Unless otherwise indicated, the terms “Sun Country,” “we,” “us” and “our” refer to Sun Country Airlines Holdings, Inc., and its subsidiaries.
Forward-Looking Statements
The following discussion and analysis presents factors that had a material effect on our results of operations during the nine months ended September 30, 2024 and 2023. Also discussed is our financial position as of September 30, 2024 and December 31, 2023. This section should be read in conjunction with our unaudited Condensed Consolidated Financial Statements and related notes appearing elsewhere in this Quarterly Report on Form 10-Q and our audited Consolidated Financial Statements and related notes and discussion under the heading, “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our 2023 10-K. This discussion contains forward-looking statements that involve risk, assumptions and uncertainties, such as statements of our plans, objectives, expectations, intentions and forecasts. Our actual results and the timing of selected events could differ materially from those discussed in these forward-looking statements as a result of several factors, including those set forth under the section of this report titled, “Risk Factors” and elsewhere in this report. You should carefully read the “Risk Factors” included in our 2023 10-K to gain an understanding of the important factors that could cause actual results to differ materially from our forward-looking statements.
Business Overview
Sun Country is a new breed of hybrid low-cost air carrier that dynamically deploys shared resources across our synergistic Scheduled Service, Charter, and Cargo businesses. By doing so, we believe we are able to generate high growth, high margins and strong cash flows with greater resilience than other passenger airlines. Based in Minnesota, we focus on serving leisure and visiting friends and relatives ("VFR") passengers, Charter customers and providing crew, maintenance and insurance (“CMI”) service to Amazon, with flights throughout the U.S. and to destinations in Canada, Mexico, Central America and the Caribbean. We share resources, such as flight crews, across our Scheduled Service, Charter and Cargo business lines with the objective of generating high returns and margins and mitigating the seasonality of our route network. We optimize capacity using an agile peak demand scheduling strategy which aims to shift flying to markets during periods of peak demand and away from markets during periods of low demand. We believe this flexible business model provides greater resiliency to economic and industry downturns than a traditional scheduled service carrier. This strategy has been implemented and executed by an experienced management team with deep knowledge of the industry.
Our Scheduled Service business combines low costs with a high-quality product to generate higher Total Revenue per Available Seat Mile (“TRASM”) than Ultra Low-Cost Carriers (“ULCCs”) while maintaining lower Adjusted Cost per Available Seat Mile (“CASM”) than Low Cost Carriers (“LCCs”), resulting in best-in-class unit profitability. Our business includes many cost characteristics of ULCCs, such as an unbundled product (which means we offer a base fare and allow customers to purchase ancillary products and services for an additional fee), point-to-point service and a single-family fleet of Boeing 737-NG aircraft, which allow us to maintain a cost base comparable to ULCCs. However, we offer a high-quality product that we believe is superior to ULCCs and consistent with that of LCCs. For example, our product includes more average legroom than ULCCs, complimentary soft drinks and juices, complimentary in-flight entertainment, and in-seat power, none of which are offered by other ULCCs.
Our Charter business, which is one of the largest narrow body Charter operations in the United States, is synergistic with our other businesses and provides both inherent diversification and downside protection. Our
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SUN COUNTRY AIRLINES HOLDINGS, INC
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
(Dollars in thousands, except per share amounts)
(Unaudited)
Charter business has several favorable characteristics, including: large repeat customers, more stable demand than Scheduled Service flying, and the ability to pass through certain costs, including fuel. Our diverse Charter customer base includes the DoD, collegiate and professional sports teams, and casino operators. Our Charter business includes ad hoc, repeat, short-term and long-term service contracts with pass through fuel arrangements and annual rate escalations. Most of our business is non-cyclical because the DoD and sports teams continue to fly during normal economic downturns and our casino contracts are long-term in nature.
On December 13, 2019, we signed the ATSA with Amazon to provide air cargo services. Flying under the ATSA began in May 2020 and we are currently operating 12 Boeing 737-800 cargo aircraft for Amazon. In June 2024, the Company entered into the A&R ATSA with Amazon that will increase the number of 737-800 cargo aircraft that Sun Country operates on behalf of Amazon from 12 to 20. The A&R ATSA includes revised economics to reflect the higher-cost environment that has ensued since the original ATSA was signed in December 2019. The first additional aircraft is expected to begin service in the first quarter of 2025, and all eight aircraft are expected to be operational by the end of the third quarter of 2025. The A&R ATSA includes an initial six-year term, which expires in October 2030. The agreement includes two additional, two-year renewal terms exercisable at Amazon's option, and a subsequent three-year renewal term subject to mutual written agreement, which, if not agreed to, will trigger a final two-year wind-down term.
Our CMI service is asset-light from a Sun Country perspective as Amazon supplies the aircraft and covers many of the operating expenses, including fuel, and provides all cargo loading and unloading services. We are responsible for flying the aircraft under our air carrier certificate, crew, aircraft line maintenance and insurance, all of which allow us to leverage our existing operational expertise from our passenger businesses. Our cargo business also enables us to leverage certain assets, capabilities, and fixed costs to enhance profitability and promote growth across our Company.
Operations in Review
We believe a key component of our success is establishing Sun Country as a high growth, low-cost carrier in the United States by attracting customers with low fares and garnering repeat business by delivering a high-quality passenger experience, offering state-of-the-art interiors, complimentary streaming of in-flight entertainment to passenger devices, seat reclining and seat-back power in all our aircraft.
Fuel price volatility, due to market conditions and geopolitical events and the impact of macroeconomic conditions, continue to impact the Company, as well as the industry. Our diversified business model, which includes a focus on leisure and VFR passengers, Charter and Cargo service, is unique in the airline sector and helps mitigate the impact of economic and industry downturns on our business when compared with other large U.S. passenger airlines. This strategy has allowed us to offset a majority of additional costs associated with fuel price volatility and the impact of macroeconomic conditions. Additionally, our Charter and Cargo businesses have the ability to pass on certain costs, including fuel. Our flexible business model gives us the ability to adjust our services in response to market conditions, which is targeted at producing the highest possible returns for Sun Country.
For more information on our business and strategic advantages, see the "Business" and “Management’s Discussion and Analysis of Operations” sections within Part I, Item 1 and Part II, Item 7, respectively, in our 2023 10-K.
Components of Operations
For a more detailed discussion on the nature of transactions included in the separate line items of our Condensed Consolidated Statement of Operations, see “Management’s Discussion and Analysis of Operations” in Part II, Item 7 in our 2023 10-K.
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SUN COUNTRY AIRLINES HOLDINGS, INC
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
(Dollars in thousands, except per share amounts)
(Unaudited)
Operating Statistics
Three Months Ended September 30, 2024 (1)
Three Months Ended September 30, 2023 (1)
Scheduled
Service 		CharterCargoTotalScheduled
Service 		CharterCargoTotal
Departures (2)
7,2592,809 3,519 13,730 6,8782,688 3,432 13,128 
Block hours (2)
21,4165,366 8,957 36,191 19,9355,274 9,287 34,874 
Aircraft miles (2)
8,226,1181,849,230 3,439,083 13,661,813 7,776,6761,841,921 3,599,149 13,341,868 
Available seat miles (ASMs) (thousands) (2)
1,530,058328,142 1,884,889 1,446,462322,722 1,791,485 
Total revenue per ASM (TRASM) (cents) (3)
10.4215.47 11.15 11.7214.70 12.11 
Average passenger aircraft during the period (4)
   43.6   42.0 
Passenger aircraft at end of period (4)
   44   42 
Cargo aircraft at end of period   12   12 
Leased Aircraft (5)
7 5 
Average daily aircraft utilization (hours) (4)
   6.8   6.6 
Average stage length (miles)  1,001   1,005 
Revenue passengers carried (6)
1,112,455   1,090,172  
Revenue passenger miles (RPMs) (thousands) (6)
1,288,460   1,252,583  
Load factor (6)
84.2 %   86.6 %  
Average base fare per passenger (6)
$75.31   $88.50  
Ancillary revenue per passenger (6)
$65.81   $64.61  
Total fare per passenger (6)
$141.13$153.11
Charter revenue per block hour (6)
$9,462    $8,994  
Fuel gallons consumed (thousands) (2)
16,5653,525 20,344 15,5363,513 19,262 
Fuel cost per gallon, excluding indirect fuel credits   $2.69   $3.19 
Employees at end of period   2,965   2,692 
Cost per available seat mile (CASM) (cents) (7)
  12.58  12.83 
Adjusted CASM (cents) (8)
  8.04  7.75 
______________________
(1)Certain operating statistics and metrics are not presented as they are not calculable or are not utilized by management.
(2)Total System operating statistics for Departures, Block hours, Aircraft miles, ASMs and Fuel gallons consumed include amounts related to flights operated for maintenance; therefore, the Total System amounts are higher than the sum of Scheduled Service, Charter and Cargo amounts.
(3)Scheduled Service TRASM includes Schedule Service revenue, Ancillary revenue, and ASM generating revenue classified within Other Revenue on the Condensed Consolidated Statements of Operations.
(4)Scheduled Service and Charter utilize the same fleet of aircraft. Aircraft counts and utilization metrics are shown on a system basis only.
(5)Includes both the Company's Owned Aircraft Held for Operating Lease as well as subleased aircraft. These aircraft are leased to unaffiliated third parties.
(6)Passenger-related statistics and metrics are shown only for Scheduled Service. Charter revenue is driven by flight statistics.
(7)CASM is a key airline cost metric. CASM is defined as operating expenses divided by total available seat miles.
(8)Adjusted CASM is a non-GAAP measure derived from CASM by excluding fuel costs, costs related to our cargo operations, and certain other costs that are unrelated to our airline operations.
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MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
(Dollars in thousands, except per share amounts)
(Unaudited)
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SUN COUNTRY AIRLINES HOLDINGS, INC
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
(Dollars in thousands, except per share amounts)
(Unaudited)
Nine Months Ended September 30, 2024 (1)
Nine Months Ended September 30, 2023 (1)
Scheduled
Service 		CharterCargoTotalScheduled
Service 		CharterCargoTotal
Departures (2)
22,1097,638 9,726 39,879 19,4567,816 9,643 37,295 
Block hours (2)
70,31215,355 25,008 111,908 61,43815,994 25,633 104,188 
Aircraft miles (2)
27,413,3115,300,705 9,465,884 42,579,400 24,139,6145,522,791 9,732,308 39,758,210 
Available seat miles (ASMs) (thousands) (2)
5,098,876937,057 6,108,695 4,489,968961,953 5,516,826 
Total revenue per ASM (TRASM) (cents) (3)
10.9515.91 11.58 12.8014.89 13.01 
Average passenger aircraft during the period (4)
   42.6   41.8 
Passenger aircraft at end of period (4)
   44  42 
Cargo aircraft at end of period   12  12 
Leased Aircraft (5)
7 5 
Average daily aircraft utilization (hours) (4)
   7.4  6.9 
Average stage length (miles)  1,100  1,088 
Revenue passengers carried (6)
3,437,005   3,093,536  
Revenue passenger miles (RPMs) (thousands) (6)
4,335,623   3,900,975  
Load factor (6)
85.0 %   86.9 %  
Average base fare per passenger (6)
$91.08   $116.57  
Ancillary revenue per passenger (6)
$68.86   $66.47  
Total fare per passenger (6)
$159.95$183.04
Charter revenue per block hour (6)
$9,709    $8,956  
Fuel gallons consumed (thousands) (2)
54,63410,558 65,884 48,04611,063 59,734 
Fuel cost per gallon, excluding indirect fuel credits   $2.86   $3.12 
Employees at end of period   2,965   2,692 
Cost per available seat mile (CASM) (cents) (7)
  12.04  12.57 
Adjusted CASM (cents) (8)
  7.51  7.56 
______________________
(1)Certain operating statistics and metrics are not presented as they are not calculable or are not utilized by management.
(2)Total System operating statistics for Departures, Block hours, Aircraft miles, ASMs and Fuel gallons consumed include amounts related to flights operated for maintenance; therefore, the Total System amounts are higher than the sum of Scheduled Service, Charter and Cargo amounts.
(3)Scheduled Service TRASM includes Schedule Service revenue, Ancillary revenue, and ASM generating revenue classified within Other Revenue on the Condensed Consolidated Statements of Operations.
(4)Scheduled Service and Charter utilize the same fleet of aircraft. Aircraft counts and utilization metrics are shown on a system basis only.
(5)Includes both the Company's Owned Aircraft Held for Operating Lease as well as subleased aircraft. These aircraft are leased to unaffiliated third parties.
(6)Passenger-related statistics and metrics are shown only for Scheduled Service. Charter revenue is driven by flight statistics.
(7)CASM is a key airline cost metric. CASM is defined as operating expenses divided by total available seat miles.
(8)Adjusted CASM is a non-GAAP measure derived from CASM by excluding fuel costs, costs related to our cargo operations, and certain other costs that are unrelated to our airline operations







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SUN COUNTRY AIRLINES HOLDINGS, INC
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
(Dollars in thousands, except per share amounts)
(Unaudited)
Results of Operations
For the Three Months Ended September 30, 2024 and 2023

Three Months Ended September 30,%
Change
20242023
Operating Revenues:
Scheduled Service$83,784 $96,483 (13)%
Charter50,769 47,437 7 %
Ancillary73,211 70,435 4 %
Passenger 207,764 214,355 (3)%
Cargo29,165 26,059 12 %
Other12,541 8,462 48 %
Total Operating Revenues249,470 248,876 — %
Operating Expenses:
Aircraft Fuel54,737 61,179 (11)%
Salaries, Wages, and Benefits80,919 72,541 12 %
Aircraft Rent— 22 (100)%
Maintenance15,973 15,330 4 %
Sales and Marketing7,748 7,569 2 %
Depreciation and Amortization23,754 22,762 4 %
Ground Handling11,568 9,382 23 %
Landing Fees and Airport Rent15,979 13,958 14 %
Other Operating, net26,410 27,127 (3)%
Total Operating Expenses237,088 229,870 3 %
Operating Income 12,382 19,006 (35)%
Non-operating Income (Expense):
Interest Income1,659 2,480 (33)%
Interest Expense(11,049)(11,403)(3)%
Other, net12 (15)NM
Total Non-operating Expense, net(9,378)(8,938)5 %
Income Before Income Tax3,004 10,068 (70)%
Income Tax Expense662 2,477 (73)%
Net Income$2,342 $7,591 (69)%
“NM” stands for not meaningful
Total Operating Revenues were $249,470 for the three months ended September 30, 2024. The quarter-over-quarter change in Total Operating Revenues was nominal. The increase in rental revenue included within Other revenue, as well as the increase in Cargo revenue due to the A&R ATSA, were largely offset by a decrease in Passenger revenue as a result of an 8% decrease in total fare per passenger. These items are discussed in further detail below.
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SUN COUNTRY AIRLINES HOLDINGS, INC
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
(Dollars in thousands, except per share amounts)
(Unaudited)
Passenger. Passenger revenue decreased $6,591, or 3%, to $207,764 for the three months ended September 30, 2024 as compared to the three months ended September 30, 2023. The table below presents select operating data for lines of revenue within Passenger, expressed as quarter-over-quarter changes:
Three Months Ended September 30,%
Change
20242023
Scheduled Service and Ancillary Statistics:
Departures7,259 6,878 6 %
Block Hours21,416 19,935 7 %
Passengers1,112,455 1,090,172 2 %
Average base fare per passenger$75.31 $88.50 (15)%
Ancillary revenue per passenger$65.81 $64.61 2 %
Total fare per passenger$141.13 $153.11 (8)%
RPMs (thousands)1,288,460 1,252,583 3 %
ASMs (thousands)1,530,058 1,446,462 6 %
TRASM (cents)10.42 11.72 (11)%
Passenger load factor84.2 %86.6 %(2.4)%
Charter Statistics:
Departures2,809 2,688 5 %
Block hours5,366 5,274 2 %
Charter revenue per block hour$9,462 $8,994 5 %
The decreases in both total fare per passenger and TRASM were impacted by increased capacity across the industry. The increase in capacity by the Company and across the industry also had an impact on the 2.4% reduction in load factor. Volume increases due to operational growth partially offset the quarter-over-quarter decreases in both total fare per passenger, TRASM, and load factor. As a result of the operational growth, both Scheduled Service departures and ASMs increased by 6%, which drove the 2% increase in passengers. The 2% increase in Schedule Service passengers during the period also resulted in greater sales of ancillary products.
Passenger revenue benefited from the $3,332, or 7%, increase in Charter revenue during the three months ended September 30, 2024, as compared to the three months ended September 30, 2023. This increase was the result of a 5% improvement in Charter revenue per block hour and a 2% increase in block hours. The improvement in Charter revenue per block hour was due to rate increases and management initiatives to reduce the number of ferry flights.
Cargo. Revenue from cargo services increased $3,106, or 12%, to $29,165 for the three months ended September 30, 2024, as compared to the three months ended September 30, 2023. The increase was primarily driven by rate escalations as a result of the A&R ATSA, partially offset by a 4% quarter-over-quarter decrease in block hours.
Other. Other revenue increased $4,079, or 48%, to $12,541 for the three months ended September 30, 2024, as compared to the three months ended September 30, 2023. Other revenue benefited from the $10,092 of rental revenue primarily associated with seven leased aircraft during the three months ended September 30, 2024, as compared to $5,870 of rental revenue associated with five leased aircraft during the three months ended September 30, 2023.
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SUN COUNTRY AIRLINES HOLDINGS, INC
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
(Dollars in thousands, except per share amounts)
(Unaudited)
Operating Expenses
Aircraft Fuel. We believe Aircraft Fuel expense, excluding indirect fuel credits, is the best measure of the effect of fuel prices on our business as it consists solely of direct fuel expenses that are related to our operations and is consistent with how management analyzes our operating performance. This measure is defined as GAAP Aircraft Fuel expense, excluding indirect fuel credits that are recognized within Aircraft Fuel expense, but are not directly related to our Fuel Cost per Gallon.
The primary components of Aircraft Fuel expense are shown in the following table:

Three Months Ended September 30,%
Change
20242023
Total Aircraft Fuel Expense$54,737 $61,179 (11)%
Indirect Fuel Credits68 175 (61)%
Aircraft Fuel Expense, Excluding Indirect Fuel Credits$54,805 $61,354 (11)%
Fuel Gallons Consumed (thousands)20,344 19,262 6 %
Fuel Cost per Gallon, Excluding Indirect Fuel Credits$2.69 $3.19 (16)%
Aircraft Fuel expense decreased 11% quarter-over-quarter due to a 16% decrease in the average fuel cost per gallon. This was partially offset by a 6% increase in consumption as a result of our operational growth.
Salaries, Wages, and Benefits. Salaries, Wages, and Benefits expense increased $8,378, or 12%, to $80,919 for the three months ended September 30, 2024, as compared to the three months ended September 30, 2023. The quarter-over-quarter increase in Salaries, Wages, and Benefits was impacted by a 10% increase in employee headcount, an increase in total system block hours as a result of operational growth, and contractual rate increases for our pilots.
Aircraft Rent. Aircraft Rent expense was nominal for both periods presented as a result of our aircraft fleet shifting from aircraft under operating leases to all owned aircraft or aircraft under finance leases.
Maintenance. Maintenance expense increased $643, or 4%, to $15,973 for the three months ended September 30, 2024, as compared to the three months ended September 30, 2023. The quarter-over-quarter increase in Maintenance expense was primarily driven by an increase in landing gear events as well as an increase in the size of our fleet and operations. These were partially offset by a decrease in routine, time-based heavy maintenance events.
Sales and Marketing. Sales and Marketing expense increased $179, or 2%, to $7,748 for the three months ended September 30, 2024, as compared to the three months ended September 30, 2023. The quarter-over-quarter increase was driven by a rise in Global Distribution System ("GDS") fees as a result of an increase in sales through indirect distribution channels, as well as increases in advertising and other expenses. These were partially offset by a reduction in credit card fees as a result of the decrease in total fare per passenger.
Depreciation and Amortization. Depreciation and Amortization expense increased $992, or 4%, to $23,754 for the three months ended September 30, 2024, as compared to the three months ended September 30, 2023. The increase was due to the impact of a change in the composition of our aircraft fleet that resulted in an increased number of owned aircraft and aircraft under finance leases. As of September 30, 2024 and 2023, there were 51 and 47 aircraft that were owned or under finance leases, respectively.
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SUN COUNTRY AIRLINES HOLDINGS, INC
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
(Dollars in thousands, except per share amounts)
(Unaudited)
Ground Handling. Ground Handling expense increased $2,186, or 23%, to $11,568, for the three months ended September 30, 2024, as compared to the three months ended September 30, 2023. This quarter-over-quarter increase was the result of a 5% increase in Passenger segment departures as a result of our expanding operations, as well as rate increases due to market pressures.
Landing Fees and Airport Rent. Landing Fees and Airport Rent increased $2,021, or 14%, to $15,979 for the three months ended September 30, 2024, as compared to the three months ended September 30, 2023. This quarter-over-quarter increase was the result of a 5% increase in Passenger segment departures as a result of our expanding operations, as well as rate increases due to market pressures.
Other Operating, net. Other operating, net decreased $717, or 3%, to $26,410 for the three months ended September 30, 2024, as compared to the three months ended September 30, 2023. The decrease was primarily the result of our part sales programs, partially offset by an increase in operations.
Non-operating Income (Expense)
Interest Income. Interest income decreased $821, or 33%, to $1,659 for the three months ended September 30, 2024, as compared to the three months ended September 30, 2023. The decrease was primarily due to the reduction in the Company's average investment balance quarter-over-quarter.
Interest Expense. Interest expense decreased $354, or 3%, to $11,049 for the three months ended September 30, 2024, as compared to the three months ended September 30, 2023. The decrease was primarily due to decreasing debt balances and aircraft purchased with operating cash, partially offset by an increase in aircraft under finance leases. For more information on the Company's Debt, see Note 5 of the Condensed Consolidated Financial Statements included in Part I, Item I of this report.
Other, net. Other, net did not change by a material amount for the three months ended September 30, 2024, as compared to the three months ended September 30, 2023.
Income Tax. The Company's effective tax rate for the three months ended September 30, 2024 was 22.0% compared to 24.6% for the three months ended September 30, 2023. The decrease in the effective tax rate was due to a reduction in the impact of permanent stock compensation items.
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SUN COUNTRY AIRLINES HOLDINGS, INC
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
(Dollars in thousands, except per share amounts)
(Unaudited)
Results of Operations
For the Nine Months Ended September 30, 2024 and 2023

Nine Months Ended September 30,%
Change
20242023
Operating Revenues:
Scheduled Service$313,056 $360,607 (13)%
Charter149,090 143,250 4 %
Ancillary236,677 205,633 15 %
Passenger 698,823 709,490 (2)%
Cargo78,560 74,437 6 %
Other37,951 20,150 88 %
Total Operating Revenues815,334 804,077 1 %
Operating Expenses:
Aircraft Fuel187,229 185,829 1 %
Salaries, Wages, and Benefits242,516 223,890 8 %
Aircraft Rent— 2,281 (100)%
Maintenance50,129 44,311 13 %
Sales and Marketing26,819 26,005 3 %
Depreciation and Amortization71,194 64,577 10 %
Ground Handling32,090 28,299 13 %
Landing Fees and Airport Rent44,431 36,847 21 %
Other Operating, net81,003 81,663 (1)%
Total Operating Expenses735,411 693,702 6 %
Operating Income 79,923 110,375 (28)%
Non-operating Income (Expense):
Interest Income5,907 7,766 (24)%
Interest Expense(33,238)(31,272)6 %
Other, net55 (370)NM
Total Non-operating Expense, net(27,276)(23,876)14 %
Income Before Income Tax52,647 86,499 (39)%
Income Tax Expense13,180 19,963 (34)%
Net Income$39,467 $66,536 (41)%
“NM” stands for not meaningful
Total Operating Revenues increased $11,257, or 1%, to $815,334 for the nine months ended September 30, 2024 as compared to the nine months ended September 30, 2023. The revenue growth was driven by an increase in rental revenue included within Other revenue, as well as an increase in Cargo revenue due to the A&R ATSA, partially offset by a decrease in Passenger revenue as a result of a 13% decrease in total fare per passenger which was impacted by increased industry capacity. These items are discussed in further detail below.
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SUN COUNTRY AIRLINES HOLDINGS, INC
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
(Dollars in thousands, except per share amounts)
(Unaudited)
Passenger. Passenger revenue decreased $10,667, or 2%, to $698,823 for the nine months ended September 30, 2024 as compared to the nine months ended September 30, 2023. The table below presents select operating data for lines of revenue within Passenger, expressed as year-over-year changes:
Nine Months Ended September 30,%
Change
20242023
Scheduled Service and Ancillary Statistics:
Departures22,109 19,456 14 %
Block Hours70,312 61,438 14 %
Passengers3,437,005 3,093,536 11 %
Average base fare per passenger$91.08 $116.57 (22)%
Ancillary revenue per passenger$68.86 $66.47 4 %
Total Fare per passenger$159.95 $183.04 (13)%
RPMs (thousands)4,335,623 3,900,975 11 %
ASMs (thousands)5,098,876 4,489,968 14 %
TRASM (cents)10.95 12.80 (14)%
Passenger load factor85.0 %86.9 %(1.9)%
Charter Statistics:
Departures7,638 7,816 (2)%
Block hours15,355 15,994 (4)%
Charter revenue per block hour$9,709 $8,956 8 %
The year-over-year decreases in both total fare per passenger and TRASM were impacted by increased capacity across the industry. The increase in capacity by the Company and across the industry also had an impact on the 1.9% reduction in load factor. The fare decreases were offset by a 7% increase in average daily aircraft utilization and growth in the passenger fleet, which supported an increase in volume. As a result, Scheduled Service departures and ASMs increased by 14%, which drove the 11% increase in Scheduled Service passengers. The 11% increase in Scheduled Service passengers during the period also resulted in greater sales of ancillary products.
Passenger revenue benefited from the $5,840, or 4%, increase in Charter revenue during the nine months ended September 30, 2024, as compared to the nine months ended September 30, 2023. The increase was primarily due to the 8% increase in Charter revenue per block hour. The improvement in Charter revenue per block hour was due to rate increases and management initiatives to reduce the number of ferry flights.
Cargo. Revenue from cargo services increased $4,123, or 6%, to $78,560 for the nine months ended September 30, 2024, as compared to the nine months ended September 30, 2023. The increase was primarily driven by rate escalations as a result of the A&R ATSA, partially offset by a 2% year-over-year decrease in block hours.
Other. Other revenue increased $17,801, or 88%, to $37,951 for the nine months ended September 30, 2024, as compared to the nine months ended September 30, 2023. Other revenue benefited from the $29,240 of rental revenue primarily associated with seven leased aircraft during the nine months ended September 30, 2024, as compared to $11,742 in rental revenue associated with five leased aircraft during the nine months ended September 30, 2023.
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SUN COUNTRY AIRLINES HOLDINGS, INC
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
(Dollars in thousands, except per share amounts)
(Unaudited)
Operating Expenses
Aircraft Fuel. We believe Aircraft Fuel expense, excluding indirect fuel credits, is the best measure of the effect of fuel prices on our business as it consists solely of direct fuel expenses that are related to our operations and is consistent with how management analyzes our operating performance. This measure is defined as GAAP Aircraft Fuel expense, excluding indirect fuel credits that are recognized within Aircraft Fuel expense, but are not directly related to our Fuel Cost per Gallon.
The primary components of Aircraft Fuel expense are shown in the following table:

Nine Months Ended September 30,%
Change
20242023
Total Aircraft Fuel Expense$187,229 $185,829 1 %
Indirect Fuel Credits1,290 827 56 %
Aircraft Fuel Expense, Excluding Indirect Fuel Credits$188,519 $186,656 1 %
Fuel Gallons Consumed (thousands)65,884 59,734 10 %
Fuel Cost per Gallon, Excluding Indirect Fuel Credits$2.86 $3.12 (8)%
Aircraft Fuel expense increased 1% year-over-year primarily due to a 10% increase in consumption, partially offset by an 8% decrease in the average fuel cost per gallon.
Salaries, Wages, and Benefits. Salaries, Wages, and Benefits expense increased $18,626, or 8%, to $242,516 for the nine months ended September 30, 2024, as compared to the nine months ended September 30, 2023. The year-over-year increase in Salaries, Wages, and Benefits was impacted by a 10% increase in employee headcount, an increase in total system block hours as a result of operational growth, and contractual rate increases for our pilots.
Aircraft Rent. Aircraft Rent expense decreased by $2,281 to $0 for the nine months ended September 30, 2024, as compared to the nine months ended September 30, 2023. Aircraft Rent expense decreased due to the composition of our aircraft fleet shifting from aircraft under operating leases to all owned aircraft or aircraft under finance leases.
Maintenance. Maintenance expense increased $5,818, or 13%, to $50,129 for the nine months ended September 30, 2024, as compared to the nine months ended September 30, 2023. The year-over-year increase in Maintenance expense was primarily driven by an increase in routine, time-based heavy maintenance and landing gear events, as well as the increase in the size of our fleet and operations.
Sales and Marketing. Sales and Marketing expense increased $814, or 3%, to $26,819 for the nine months ended September 30, 2024, as compared to the nine months ended September 30, 2023. The change year-over-year was primarily driven by an increase in advertising and other costs, partially offset by a reduction in credit card fees as a result of the year-over-year decrease in total fare per passenger.
Depreciation and Amortization. Depreciation and Amortization expense increased $6,617, or 10%, to $71,194 for the nine months ended September 30, 2024, as compared to the nine months ended September 30, 2023. The increase was due to the impact of a change in the composition of our aircraft fleet that resulted in an increased number of owned aircraft and aircraft under finance leases. As of September 30, 2024 and 2023, there were 51 and 47 aircraft that were owned or under finance leases, respectively.
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SUN COUNTRY AIRLINES HOLDINGS, INC
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
(Dollars in thousands, except per share amounts)
(Unaudited)
Ground Handling. Ground Handling expense increased $3,791, or 13%, to $32,090, for the nine months ended September 30, 2024, as compared to the nine months ended September 30, 2023. The year-over-year increase was primarily the result of an 9% increase in Passenger segment departures as a result of our expanding operations, as well as rate increases due to market pressures.
Landing Fees and Airport Rent. Landing Fees and Airport Rent increased $7,584, or 21%, to $44,431 for the nine months ended September 30, 2024, as compared to the nine months ended September 30, 2023. The increase was a result of airports exhausting their remaining Coronavirus Aid, Relief, and Economic Security Act funding, which increased rates. The increase was also impacted by rate increases due to market pressures and the 9% increase in Passenger segment departures as a result of our expanding operations.
Other Operating, net. Other operating, net for the nine months ended September 30, 2024 was materially unchanged year-over-year. This was primarily the result of our part sales programs, mostly offset by an increase in operations.
Non-operating Income (Expense)
Interest Income. Interest income decreased $1,859, or 24%, to $5,907 for the nine months ended September 30, 2024, as compared to the nine months ended September 30, 2023. The decrease was primarily due to the reduction in the Company's average investment balance year-over-year.
Interest Expense. Interest expense increased $1,966, or 6%, to $33,238 for the nine months ended September 30, 2024, as compared to the nine months ended September 30, 2023. The increase was due to the change in our aircraft fleet that resulted in an increase of aircraft under finance leases and owned aircraft that were financed with debt proceeds. For more information on the Company's Debt, see Note 5 of the Condensed Consolidated Financial Statements included in Part I, Item I of this report.
Other, net. Other, net changed by $425 to a net benefit of $55 for the nine months ended September 30, 2024, as compared to a net expense of $370 for the nine months ended September 30, 2023. The change is a result of secondary offering costs incurred during the nine months ended September 30, 2023.
Income Tax. The Company's effective tax rate for the nine months ended September 30, 2024 was 25.0% compared to 23.1% for the nine months ended September 30, 2023. The increase in the effective tax rate was due to the impact of permanent stock compensation items.








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SUN COUNTRY AIRLINES HOLDINGS, INC
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
(Dollars in thousands, except per share amounts)
(Unaudited)
Segments
For the Three Months Ended September 30, 2024 and 2023
Three Months Ended September 30, 2024Three Months Ended September 30, 2023
PassengerCargoTotalPassengerCargo Total
Operating Revenues$220,305$29,165$249,470$222,817$26,059$248,876
Operating Expenses:
Aircraft Fuel54,7013654,73761,1572261,179
Salaries, Wages, and Benefits62,31718,60280,91954,52718,01472,541
Aircraft Rent———22—22
Maintenance12,1713,80215,97311,6793,65115,330
Sales and Marketing7,748—7,7487,569—7,569
Depreciation and Amortization23,749523,75422,756622,762
Ground Handling11,563511,5689,382—9,382
Landing Fees and Airport Rent15,82915015,97913,85810013,958
Other Operating, net21,5344,87626,41022,2524,87527,127
Total Operating Expenses209,61227,476237,088203,20226,668229,870
Operating Income (Loss)$10,693$1,689$12,382$19,615$(609)$19,006
Operating Margin %4.9 %5.8 %5.0 %8.8 %(2.3)%7.6 %
Passenger. Passenger Operating Income decreased $8,922 to $10,693 for the three months ended September 30, 2024, as compared to the three months ended September 30, 2023. The Operating Margin Percentage for the three months ended September 30, 2024 decreased by 3.9 percentage points, as compared to the three months ended September 30, 2023. The quarter-over-quarter decreases in Passenger Operating Income and Operating Margin Percentage were primarily driven by an 8% reduction in total fare per passenger which was impacted by increased capacity across the industry, partially offset by a 5% increase in Passenger segment departures. Operating Income and Operating Margin Percentage were also pressured by increased expenses as a result of contractual rate increases for our pilots, an increase in landing gear events, and rate increases for Landing Fees and Airport Rent; partially offset by a 16% decrease in the average fuel cost per gallon. For more information on the changes in the components of Operating Income for the Passenger segment, refer to the Results of Operations discussion above.
Cargo. Cargo Operating Income increased by $2,298, to $1,689, for the three months ended September 30, 2024, as compared to the three months ended September 30, 2023. Operating Margin Percentage for the three months ended September 30, 2024 improved by 8.1 percentage points, as compared to the three months ended September 30, 2023. The changes in both Operating Income and Operating Margin Percentage were driven by rate escalations due to the A&R ATSA and scheduling efficiency improvements between our segments, which offset the contractual rate increases for our pilots. For more information on the components of Operating Income for the Cargo segment, refer to the Results of Operations discussion above.
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SUN COUNTRY AIRLINES HOLDINGS, INC
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
(Dollars in thousands, except per share amounts)
(Unaudited)
Segments
For the Nine Months Ended September 30, 2024 and 2023
Nine Months Ended September 30, 2024Nine Months Ended September 30, 2023
PassengerCargoTotalPassengerCargo Total
Operating Revenues$736,774$78,560$815,334$729,640$74,437$804,077
Operating Expenses:
Aircraft Fuel187,18544187,229185,77059185,829
Salaries, Wages, and Benefits190,41352,103242,516171,08052,810223,890
Aircraft Rent———2,281—2,281
Maintenance39,42810,70150,12933,33910,97244,311
Sales and Marketing26,819—26,81926,005—26,005
Depreciation and Amortization71,1791571,19464,5275064,577
Ground Handling32,0761432,09028,299—28,299
Landing Fees and Airport Rent43,98045144,43136,54530236,847
Other Operating, net65,92915,07481,00366,81314,85081,663
Total Operating Expenses657,00978,402735,411614,65979,043693,702
Operating Income (Loss)$79,765$158$79,923$114,981$(4,606)$110,375
Operating Margin %10.8 %0.2 %9.8 %15.8 %(6.2)%13.7 %
Passenger. Passenger Operating Income decreased $35,216 to $79,765 for the nine months ended September 30, 2024, as compared to the nine months ended September 30, 2023. The Operating Margin Percentage for the nine months ended September 30, 2024 decreased by 5.0 percentage points, as compared to the nine months ended September 30, 2023. The year-over-year decreases in Passenger Operating Income and Operating Margin Percentage were primarily driven by a 13% decrease in total fare per passenger as a result of increased capacity across the industry, partially offset by a 9% increase in Passenger segment departures. Operating Income and Operating Margin Percentage were further impacted by increased expenses as a result of contractual rate increases for our pilots, an increase in heavy maintenance and landing gear events, and rate increases for Landing Fees and Airport Rent; partially offset by an 8% decrease in the average fuel cost per gallon. For more information on the changes in the components of Operating Income for the Passenger segment, refer to the Results of Operations discussion above.
Cargo. Cargo Operating Income increased by $4,764, to $158, for the nine months ended September 30, 2024, as compared to the nine months ended September 30, 2023. Operating Margin Percentage for the nine months ended September 30, 2024 improved by 6.4 percentage points, as compared to the nine months ended September 30, 2023. The changes in both Operating Income and Operating Margin Percentage were driven by rate escalations due to the A&R ATSA and scheduling efficiency improvements between our segments, which offset the contractual rate increases for our pilots and resulted in materially consistent year-over-year Operating Expenses. For more information on the components of Operating Income for the Cargo segment, refer to the Results of Operations discussion above.
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SUN COUNTRY AIRLINES HOLDINGS, INC
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
(Dollars in thousands, except per share amounts)
(Unaudited)
Non-GAAP Financial Measures
We sometimes use information that is derived from the Condensed Consolidated Financial Statements, but that is not presented in accordance with GAAP. We believe these non-GAAP measures provide a meaningful comparison of our results to others in the airline industry and our prior year results. Investors should consider these non-GAAP financial measures in addition to, and not as a substitute for, our financial performance measures prepared in accordance with GAAP. Further, our non-GAAP information may be different from the non-GAAP information provided by other companies. We believe certain charges included in our operating expenses on a GAAP basis make it difficult to compare our current period results to prior periods as well as future periods and guidance. The tables below show a reconciliation of non-GAAP financial measures used in this report to the most directly comparable GAAP financial measures.
Adjusted Operating Income, Adjusted Operating Income Margin, Adjusted Net Income and Adjusted EBITDA
Adjusted Operating Income, Adjusted Operating Income Margin, Adjusted Net Income, and Adjusted EBITDA are non-GAAP measures included as supplemental disclosure because we believe they are useful indicators of our operating performance. Derivations of Operating Income and Net Income are well recognized performance measurements in the airline industry that are frequently used by our management, as well as by investors, securities analysts and other interested parties in comparing the operating performance of companies in our industry.
The measures described above have limitations as analytical tools. Some of the limitations applicable to these measures include: they do not reflect the impact of certain cash and non-cash charges resulting from matters we consider not to be indicative of our ongoing operations; and other companies in our industry may calculate these non-GAAP measures differently than we do, limiting each measure’s usefulness as a comparative measure. Because of these limitations, the following non-GAAP measures should not be considered in isolation or as a substitute for performance measures calculated in accordance with GAAP and may not be the same as or comparable to similarly titled measures presented by other companies due to the possible differences in the method of calculation and in the items being adjusted.
For the foregoing reasons, Adjusted Operating Income, Adjusted Operating Income Margin, Adjusted Net Income and Adjusted EBITDA have significant limitations which affect their use as indicators of our profitability. Accordingly, readers are cautioned not to place undue reliance on this information.
The following table presents the reconciliation of Operating Income to Adjusted Operating Income, and Adjusted Operating Income Margin for the periods presented below.
Three Months Ended September 30,Nine Months Ended September 30,
2024202320242023
Adjusted Operating Income Margin Reconciliation:
Operating Revenue$249,470$248,876$815,334$804,077
Operating Income12,38219,00679,923110,375
Stock Compensation Expense1,4901,0394,5748,132
Adjusted Operating Income $13,872$20,045$84,497$118,507
Operating Income Margin5.0 %7.6 %9.8 %13.7 %
Adjusted Operating Income Margin 5.6 %8.1 %10.4 %14.7 %
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SUN COUNTRY AIRLINES HOLDINGS, INC
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
(Dollars in thousands, except per share amounts)
(Unaudited)

The following table presents the reconciliation of Net Income to Adjusted Net Income for the periods presented below.
Three Months Ended September 30,Nine Months Ended September 30,
2024202320242023
Adjusted Net Income Reconciliation:
Net Income$2,342 $7,591 $39,467 $66,536 
Stock Compensation Expense1,490 1,039 4,574 8,132 
Secondary offering costs— — — 640 
TRA adjustment (1)
— — — (357)
Income tax effect of adjusting items, net (2)
(343)(239)(1,052)(2,018)
Adjusted Net Income$3,489 $8,391 $42,989 $72,933 
_________________________
(1)This represents the adjustment to the TRA for the period, which is recorded in Non-Operating Income (Expense).
(2)The tax effect of adjusting items, net is calculated at the Company's statutory rate for the applicable period. The TRA adjustment is not included within the income tax effect calculation.
The following table presents the reconciliation of Net Income to Adjusted EBITDA for the periods presented below.
Three Months Ended September 30,Nine Months Ended September 30,
2024202320242023
Adjusted EBITDA Reconciliation:
Net Income$2,342 $7,591 $39,467 $66,536 
Stock Compensation Expense1,490 1,039 4,574 8,132 
Secondary offering costs— — — 640 
TRA adjustment (1)
— — — (357)
Interest Income(1,659)(2,480)(5,907)(7,766)
Interest Expense11,049 11,403 33,238 31,272 
Provision for Income Taxes662 2,477 13,180 19,963 
Depreciation and Amortization23,754 22,762 71,194 64,577 
Adjusted EBITDA$37,638 $42,792 $155,746 $182,997 
_________________________
(1)This represents the adjustment to the TRA for the period, which is recorded in Non-Operating Income (Expense).
CASM and Adjusted CASM
CASM is a key airline cost metric defined as operating expenses divided by total available seat miles. Adjusted CASM is a non-GAAP measure derived from CASM by excluding fuel costs, costs related to our cargo operations, depreciation and amortization recognized on certain assets that generate lease income, stock-based compensation, certain commissions and other costs of selling our vacation products from this measure as these costs are unrelated to our airline operations and improve comparability to our peers. Adjusted CASM is
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SUN COUNTRY AIRLINES HOLDINGS, INC
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
(Dollars in thousands, except per share amounts)
(Unaudited)
an important measure used by management and by our Board of Directors in assessing quarterly and annual cost performance. Adjusted CASM is commonly used by industry analysts and we believe it is an important metric by which they compare our airline to others in the industry, although other airlines may exclude certain other costs in their calculation of Adjusted CASM. The measure is also the subject of frequent questions from investors.
Adjusted CASM excludes fuel costs. By excluding volatile fuel expenses that are outside of our control from our unit metrics, we believe that we have better visibility into the results of operations and our non-fuel cost initiatives. Our industry is highly competitive and is characterized by high fixed costs, so even a small reduction in non-fuel operating costs can lead to a significant improvement in operating results. In addition, we believe that all domestic carriers are similarly impacted by changes in jet fuel costs over the long run, so it is important for management and investors to understand the impact and trends in company-specific cost drivers, such as labor rates, aircraft costs and maintenance costs, and productivity, which are more controllable by management.
We have excluded costs related to the Cargo operations, as well as depreciation and amortization recognized on certain assets that generate lease income as these operations do not create ASMs. The Cargo expenses in the reconciliation below are different from the total operating expenses for our Cargo segment in the “Segment Information” table presented above, due to several items that are included in the Cargo segment, but have been captured in other line items used in the Adjusted CASM calculation. We have entered into a series of aircraft-related transactions where we serve as an aircraft lessor. As of September 30, 2024, we leased or subleased seven aircraft. Depreciation and Amortization expense on these aircraft materially began during the three months ended June 30, 2023. Adjusted CASM further excludes special items and other adjustments, as defined in the relevant reporting period, that are not representative of the ongoing costs necessary to our airline operations and may improve comparability between periods. We also exclude stock compensation expense when computing Adjusted CASM. The Company’s compensation strategy includes the use of stock-based compensation to attract and retain employees and executives and is principally aimed at aligning their interests with those of our stockholders and long-term employee retention, rather than to motivate or reward operational performance for any period. Thus, stock-based compensation expense varies for reasons that are generally unrelated to operational decisions and performance in any period.
As derivations of Adjusted CASM are not determined in accordance with GAAP, such measures are susceptible to varying calculations and not all companies calculate the measures in the same manner. As a result, derivations of Adjusted CASM as presented may not be directly comparable to similarly titled measures presented by other companies. Adjusted CASM should not be considered in isolation or as a replacement for CASM. For the aforementioned reasons, Adjusted CASM has significant limitations which affect its use as an indicator of our profitability. Accordingly, readers are cautioned not to place undue reliance on this information.
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SUN COUNTRY AIRLINES HOLDINGS, INC
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
(Dollars in thousands, except per share amounts)
(Unaudited)
The following tables present the reconciliation of CASM to Adjusted CASM:
Three Months Ended September 30,
20242023
Operating
Expenses		Per ASM
(in cents)		Operating
Expenses		Per ASM
(in cents)
CASM$237,088 12.58 $229,870 12.83 
Less:
Aircraft Fuel54,737 2.90 61,179 3.41 
Stock Compensation Expense1,490 0.08 1,039 0.06 
Cargo expenses, not already adjusted above27,120 1.45 26,417 1.48 
Sun Country Vacations220 0.01 200 0.01 
Leased Aircraft, Depreciation and Amortization Expense (1)
1,977 0.10 2,192 0.12 
Adjusted CASM$151,544 8.04 $138,843 7.75 
ASM (thousands)1,884,889 1,791,485 

Nine Months Ended September 30,
20242023
Operating
Expenses		Per ASM
(in cents)		Operating
Expenses		Per ASM
(in cents)
CASM$735,411 12.04 $693,702 12.57 
Less:
Aircraft Fuel187,229 3.06 185,829 3.37 
Stock Compensation Expense4,574 0.07 8,132 0.14 
Cargo expenses, not already adjusted above77,368 1.28 77,195 1.40 
Sun Country Vacations1,013 0.02 902 0.02 
Leased Aircraft, Depreciation and Amortization Expense (1)
6,297 0.10 4,466 0.08 
Adjusted CASM$458,930 7.51 $417,178 7.56 
ASM (thousands)6,108,695 5,516,826 
_________________________
(1)Includes both the Company's Owned Aircraft Held for Operating Lease as well as subleased aircraft. These aircraft are leased to unaffiliated third parties.
Liquidity and Capital Resources
Our primary sources of liquidity as of September 30, 2024 included our existing cash and cash equivalents of $56,791 and short-term investments of $89,697, our expected cash generated from operations, and the $24,743 of available funds from the Revolving Credit Facility. In addition, we had restricted cash of $10,649 as of September 30, 2024, which generally consists of cash received as prepayment for chartered flights that is maintained in separate escrow accounts prior to the date of transportation in accordance with DOT regulations. The restrictions are released once the charter transportation is provided.
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SUN COUNTRY AIRLINES HOLDINGS, INC
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
(Dollars in thousands, except per share amounts)
(Unaudited)
We believe our unrestricted cash and cash equivalents, short-term investments, and availability under our Revolving Credit Facility, combined with expected future cash flows from operations, will be sufficient to fund our operations and meet our debt payment obligations for at least the next twelve months. However, we cannot predict what the effect on our business and financial position might be from a change in the competitive environment in which we operate or from events beyond our control, such as volatile fuel prices, economic conditions, pandemics, weather-related disruptions, the impact of airline bankruptcies, restructurings or consolidations, U.S. military actions, regulations, or acts of terrorism.
For a more detailed discussion on our Liquidity and Capital Resources, see “Management’s Discussion and Analysis of Operations” in Part II, Item 7 in our 2023 10-K.
Aircraft – As of September 30, 2024, our fleet consisted of 63 Boeing 737-NG aircraft. This includes 44 aircraft in the passenger fleet, 12 cargo operated aircraft through the ATSA, and seven aircraft currently on lease to unaffiliated airlines. For more information on our fleet, see Note 4 of the Condensed Consolidated Financial Statements included in Part I, Item I of this report.
Maintenance Deposits - In addition to funding the acquisition of aircraft, we are required by certain of our aircraft lessors to fund cash reserves in advance for scheduled maintenance to act as collateral for the benefit of the lessors. Qualifying payments that are expected to be recovered from lessors are recorded as Lessor Maintenance Deposits on our Condensed Consolidated Balance Sheets. As of September 30, 2024, we had $57,658 of total Lessor Maintenance Deposits. All maintenance deposits as of September 30, 2024 are estimated to be recoverable either through reimbursable maintenance events or through application towards the purchase of the aircraft.
Investments - We invest our cash and cash equivalents in highly liquid securities with strong credit ratings. As of September 30, 2024, the Company held $83,280 of debt securities, all of which are classified as current assets because of their highly liquid nature and availability to be converted into cash to fund current operations. Given the significant portion of our portfolio held in cash and cash equivalents and the high credit quality of our debt security investments, we do not anticipate fluctuations in the aggregate fair value of our investments to have a material impact on our liquidity or capital position.
We also hold $6,417 of Certificates of Deposit that are included in Investments on the Condensed Consolidated Balance Sheets as of September 30, 2024.
Credit Facilities - We use our Credit Facilities to provide liquidity support for general corporate purposes and to finance the acquisition of aircraft. As of September 30, 2024, the Company had $24,743 of the $25,000 Revolving Credit Facility available due to $257 being pledged to support letters of credit, and no balance drawn. The Company was in compliance with the covenants within the Credit Facility as of September 30, 2024.
Debt - At our discretion, we obtain debt financing in order to purchase, or refinance aircraft. The Company has not entered into a debt financing arrangement during the nine months ended September 30, 2024.
For more information on our credit facilities or debt, see Note 5 of the Condensed Consolidated Financial Statements included in Part I, Item I of this report.
TRA Liability - During the nine months ended September 30, 2024 and 2023, we made a payment of $3,350 and $2,425 to the TRA holders, respectively. Payments will be made in future periods as Pre-IPO Tax Attributes are utilized. For more information on the TRA liability, see Note 8 of the Condensed Consolidated Financial Statements included in Part I, Item I of this report.
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SUN COUNTRY AIRLINES HOLDINGS, INC
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
(Dollars in thousands, except per share amounts)
(Unaudited)
Liquidity and Financial Condition Indicators
The table below presents the major indicators of financial condition and liquidity:
September 30, 2024December 31, 2023
Cash and Cash Equivalents$56,791 $46,279 
Available-for-Sale Securities83,280 134,240 
Amount Available Under Revolving Credit Facility24,743 24,650 
Total Liquidity$164,814 $205,169 
September 30, 2024December 31, 2023
Total Debt, net$351,779 $401,645 
Finance Lease Obligations298,464 277,302 
Operating Lease Obligations21,375 18,830 
Total Debt, net, and Lease Obligations671,618 697,777 
Stockholders' Equity552,546 514,403 
Total Invested Capital$1,224,164 $1,212,180 
Debt-to-Capital 0.55 0.58 
Sources and Uses of Liquidity
Nine Months Ended September 30,%
20242023Change
Total Operating Activities$74,303 $102,651 (28)%
Investing Activities:
Purchases of Property & Equipment(42,615)(210,641)(80)%
Purchases of Investments(55,655)(82,574)(33)%
Proceeds from the Maturities of Investments107,750 110,850 (3)%
Other, net11,458 4,087 180 %
Total Investing Activities20,938 (178,278)112 %
Financing Activities:
Common Stock Repurchases(11,493)(55,051)(79)%
Proceeds from Borrowings10,000 119,200 (92)%
Repayment of Finance Lease Obligations(26,249)(16,390)60 %
Repayment of Borrowings(60,776)(35,475)71 %
Other, net(2,963)(1,665)78 %
Total Financing Activities(91,481)10,619 NM
Net Increase (Decrease) in Cash$3,760 $(65,008)106 %
“NM” stands for not meaningful
"Cash" consists of Cash, Cash Equivalents and Restricted Cash
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SUN COUNTRY AIRLINES HOLDINGS, INC
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
(Dollars in thousands, except per share amounts)
(Unaudited)
Operating Cash Flow Activities
Operating activities in the nine months ended September 30, 2024 provided $74,303, as compared to $102,651 during the nine months ended September 30, 2023. During the nine months ended September 30, 2024, our Net Income was $39,467, as compared to $66,536 during the nine months ended September 30, 2023.
Our operating cash flow is primarily impacted by the following factors:
Seasonality of Advance Ticket Sales. We sell tickets for air travel in advance of the customer's travel date. When we receive a cash payment at the time of sale, we record the cash received on advance sales as deferred revenue in Air Traffic Liabilities. Air Traffic Liabilities typically increase during the fall and early winter months as advanced ticket sales grow prior to the late winter and spring peak travel season and decrease during the summer months. Most tickets can be purchased no more than twelve months in advance, therefore any revenue associated with tickets sold for future travel will be recognized within that timeframe. For the nine months ended September 30, 2024, $153,708 of revenue recognized in Passenger revenue was included in the $157,996 of Air Traffic Liabilities as of December 31, 2023.
Aircraft Fuel. Aircraft Fuel expense represented approximately 25% of our total operating expense for the nine months ended September 30, 2024 and 2023, respectively. The market price for jet fuel is volatile, which can impact the comparability of our periodic cash flows from operations. Fuel cost per gallon decreased by 8% year-over-year. Fuel consumption increased by 10% during the nine months ended September 30, 2024, compared to the prior year as a result of the increase in fleet size and total operations. We expect volatility in Aircraft Fuel prices per gallon due to market conditions and global geopolitical events.
Investing Cash Flow Activities
Capital Expenditures. Our capital expenditures were $42,615 and $210,641 for the nine months ended September 30, 2024 and 2023, respectively. Our capital expenditures during the nine months ended September 30, 2024 included the acquisition of one aircraft and other items not individually material. Our capital expenditures during the nine months ended September 30, 2023 primarily included the purchase of five Owned Aircraft Held for Operating Lease and one incremental aircraft for our passenger fleet.
Investments. The Company's net investment activity resulted in cash inflows of $52,095 and $28,276 during the nine months ended September 30, 2024 and 2023, respectively, due to maturing debt securities exceeding purchases of investments.
Financing Cash Flow Activities
Debt. During the nine months ended September 30, 2023, the Company executed a term loan credit facility with a face amount of $119,200 for the purpose of financing the five Owned Aircraft Held for Operating Lease. The term loan credit facility is repaid monthly through March 2030. For more information on our debt financings and future repayment schedules, see Note 5 of the Condensed Consolidated Financial Statements included in Part I, Item I of this report.
Finance Leases. Our repayments of finance lease obligations were $26,249 and $16,390 for the nine months ended September 30, 2024 and 2023, respectively. During the nine months ended September 30, 2024, the Company purchased an aircraft previously classified as a finance lease. The resulting cash outflows were recorded as payments for finance lease obligations. As of September 30, 2024 and 2023, the Company had 15 and 13 aircraft finance leases, respectively.
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Common Stock Repurchases. During the nine months ended September 30, 2024, the Company repurchased 755,284 shares of its Common Stock at a total cost of $11,493, or $15.22 per share. During the nine months ended September 30, 2023, the Company repurchased 3,307,541 shares of its Common Stock at $16.64 per share. For more information on the stock repurchase program, see Note 9 of the Condensed Consolidated Financial Statements included in Part I, Item I of this report.
Other. During the nine months ended September 30, 2024 and 2023, the Company made payments of $3,350 and $2,425 to the TRA holders, respectively. For more information on the payment of the TRA, see Note 8 of the Condensed Consolidated Financial Statements included in Part I, Item I of this report.
Off Balance Sheet Arrangements
For a detailed discussion on the nature of the Company's Off Balance Sheet Arrangements, see “Management’s Discussion and Analysis of Operations” in Part II, Item 7 in our 2023 10-K. There have been no material changes to the Company's Off Balance Sheet Arrangements as compared to the 2023 10-K.
Commitments and Contractual Obligations
See Note 10 to our Condensed Consolidated Financial Statements included elsewhere in this Quarterly Report on Form 10-Q for more information regarding commitments and contractual obligations.
Recently Adopted Accounting Pronouncements
During the nine months ended September 30, 2024, there were no recently adopted accounting standards that had a material impact to the Company.
Critical Accounting Policies and Estimates
Our unaudited Condensed Consolidated Financial Statements and the accompanying notes thereto included elsewhere in this Quarterly Report on Form 10-Q are prepared in accordance with GAAP. The preparation of the Condensed Consolidated Financial Statements requires us to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenue, expenses, and various other assumptions that we believe to be reasonable under the circumstances. Actual results could differ significantly from our estimates. To the extent that there are differences between our estimates and actual results, our future financial statement presentation, financial condition, results of operations, and cash flows will be affected. For more information on our critical accounting policies, see “Management’s Discussion and Analysis of Operations” sections within Part II, Item 7, respectively, in our 2023 10-K.
There have been no material changes to our critical accounting policies and estimates as compared to the 2023 10-K.
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ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
We are subject to market risks in the ordinary course of our business. These risks include commodity price risk, specifically with respect to aircraft fuel, as well as interest rate risk. The adverse effects of changes in these markets could pose a potential loss as discussed below. The sensitivity analysis provided does not consider the effects that such adverse changes may have on overall economic activity, nor does it consider additional actions we may take to mitigate our exposure to such changes. Accordingly, actual results may differ from the information provided below.
Aircraft Fuel. Unexpected pricing changes of aircraft fuel could have a material adverse effect on our business, results of operations and financial condition. For example, based on our forecasted Aircraft Fuel expense for the fourth quarter of 2024, we estimate that a one cent per gallon increase in the average aircraft fuel price would increase Aircraft Fuel expense by approximately $203. Aircraft Fuel expense does not include amounts where we are considered the customer's agent for procuring fuel. We had no fuel option and swap contracts in place to hedge the economic risk associated with volatile fuel prices as of September 30, 2024. We currently do not expect to enter into these types of contracts prospectively, although significant changes in market conditions could affect our decisions.
Interest Rates. We have exposure to market risk associated with changes in interest rates related to the interest expense from our variable-rate debt and our short-term investment securities. A change in market interest rates would impact interest expense under the $119,200 term loan credit facility used to finance the Owned Aircraft Held for Operating Lease. A 100 basis point increase in interest rates on the September 30, 2024 balance of the term loan would result in a corresponding increase in interest expense of approximately $971 annually. As of the date of this filing, the entire term loan credit facility had been drawn. The Company also maintains a $25,000 Revolving Credit Facility with a variable interest rate that is impacted by market conditions. As of September 30, 2024, the Company had $24,743 of financing available through the Revolving Credit Facility, as $257 had been pledged to support letters of credit. As of September 30, 2024, no amounts on the Revolving Credit Facility were outstanding.
Our short-term investment securities are primarily comprised of fixed-rate debt investments. An increase in market interest rates decreases the market value of fixed-rate investments. Conversely, a decrease in market interest rates increases the market value. The fair market value of our short-term investments with exposure to interest rate risk was $83,280 as of September 30, 2024. The Company limits its investments to investment grade quality securities. Given these factors and that a significant portion of our portfolio is held in cash and cash equivalents, we do not anticipate fluctuations in the aggregate fair value of our financial assets to have a material impact on our liquidity or capital position.
ITEM 4. CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures

Disclosure controls and procedures represent controls and procedures that are designed to ensure that information required to be disclosed in our reports filed or submitted under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), is recorded, processed, summarized, and reported within the time periods specified in the SEC’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed in our reports filed or submitted under the Exchange Act is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, to allow timely decisions regarding required disclosure.

In connection with the preparation of this Form 10-Q, pursuant to Rule 13a-15(b) of the Exchange Act, our management, with the participation of our Chief Executive Officer and Chief Financial Officer, has evaluated the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) as of September 30, 2024.

Based on the evaluation of our disclosure controls and procedures as of September 30, 2024, our Chief Executive Officer and Chief Financial Officer have concluded that our disclosure controls and procedures were effective as of September 30, 2024.
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Changes in Internal Control Over Financial Reporting

There have been no changes in the Company’s internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) that occurred during the quarter ended September 30, 2024 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.
PART II. OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
We are subject to commercial litigation claims and to administrative and regulatory proceedings and reviews that may be asserted or maintained from time to time. We currently believe that the ultimate outcome of such lawsuits, proceedings and reviews will not, individually or in the aggregate, have a material adverse effect on our financial position, liquidity or results of operations.
ITEM 1A. RISK FACTORS
We have disclosed under the heading “Risk Factors” in our 2023 10-K the risk factors which materially affect our business, financial condition or results of operations. There have been no material changes from the risk factors previously disclosed. You should carefully consider the risk factors set forth in our 2023 10-K. You should be aware that these risk factors and other information may not describe every risk facing our Company. Additional risks and uncertainties not currently known to us or that we currently deem to be immaterial also may materially adversely affect our business, financial condition and/or operating results.
ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
None.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
None.
ITEM 4. MINE SAFETY DISCLOSURES
Not Applicable.
ITEM 5. OTHER INFORMATION
Our directors and executive officers may purchase or sell shares of our common stock in the market from time to time, including pursuant to equity trading plans adopted in accordance with Rule 10b5-1 under the Exchange Act ("Rule 10b5-1") and in compliance with guidelines specified by the Company. In accordance with Rule 10b5-1 and the Company’s insider trading policy, directors, officers and certain employees who, at such time, are not in possession of material non-public information about the Company are permitted to enter into written plans that pre-establish amounts, prices and dates (or formula for determining the amounts, prices and dates) of future purchases or sales of the Company’s stock, including shares acquired pursuant to the Company’s equity plans ("Rule 10b5-1 Trading Plans"). Under a Rule 10b5-1 Trading Plan, a broker executes trades pursuant to parameters established by the director or executive officer when entering into the plan, without further direction from them. The following table describes contracts, instructions or written plans for the sale or purchase of our securities adopted, terminated or modified by our directors and executive officers during the three months ended September 30, 2024, each of which is intended to satisfy the affirmative defense conditions of Rule 10b5-1(c).

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Name and TitleAdoption, Termination or ModificationDate of Adoption, Termination or ModificationDuration of Plan (Scheduled Expiration Date of Plan)Number of Securities to be Purchased (Sold) under the Plan
Dave Davis, President and Chief Financial Officer
AdoptionSeptember 3, 2024September 5, 2025(580,033)
John Gyurci, Vice President Finance and Chief Accounting Officer
TerminationSeptember 9, 2024February 14, 2025(90,000)
John Gyurci, Vice President Finance and Chief Accounting Officer
AdoptionSeptember 10, 2024December 31, 2025(120,000)
Gregory Mays, Executive Vice President and Chief Operating Officer
TerminationAugust 29, 2024March 31, 2025(268,000)
Gregory Mays, Executive Vice President and Chief Operating Officer
AdoptionAugust 30, 2024December 31, 2025(268,000)
Erin Rose Neale, General Counsel and Senior Vice President
AdoptionSeptember 12, 2024December 30, 2025(17,983)

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ITEM 6. EXHIBITS
(a)Exhibits
31.1*
31.2*
32*
101.INS*Inline XBRL Instance Document - The instance document does not appear in the interactive data file because its XBRL tags are embedded within the Inline XBRL document
101.SCH*Inline XBRL Taxonomy Extension Schema Document
101.CAL*Inline XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF*Inline XBRL Taxonomy Extension Definition Linkbase Document
101.LAB*Inline XBRL Taxonomy Extension Labels Linkbase Document
101.PRE*Inline XBRL Taxonomy Extension Presentation Linkbase Document
104*Cover Page Interactive Data Files (formatted as inline XBRL and contained in Exhibit 101)
*
Filed herewith
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
Sun Country Airlines Holdings, Inc.
(Registrant)
/s/ Dave Davis
Dave Davis
President and Chief Financial Officer
(Principal Financial and Accounting Officer)
October 30, 2024