Sun Country Airlines has curtailed growth plans for the second half of 2024, becoming the latest US discount carrier to do so in response to what executives describe as an over supply of seats.
“The domestic revenue environment continues to be impacted by overcapacity, and the resultant impact on fares,” Sun Country chief executive Jude Bricker said on 2 August, the day the company reported second-quarter financial results. “As we move through the third quarter, we are slowing scheduled capacity growth.”
Sun Country has in recent quarters steadily grown its scheduled-airline operation; that businesses’ capacity (in available seat miles) jumped 17% year on year in the first half of 2024. It had previously planned for another 15% year-on-year capacity bump in the third quarter.
But industry conditions have led Minneapolis-based Sun Country to pull back. It now expects its scheduled operation’s capacity will be up 7-8% year on year in the third quarter, say Bricker.
“We expect year-over-year growth to fall further in Q4,” he adds. “The pull-down comes mainly from reducing off-peak flying.”
Sun Country turned a $1.8 million profit in the second quarter, down from a $21 million profit in the second quarter of 2023. The company’s second-quarter revenue slipped 2.6% year on year to $254 million.
But revenue from its scheduled-airline operation sunk 21% year on year in the second quarter to $88 million, with Bricker saying average fares declined 20% in one year. “Clearly, we flew more during off-peak periods than the demand environment could support.”
Sun Country’s revenue from charter flights increased 2.8% year on year in the second quarter, while its cargo revenue inched up 1.7%.
In recent days other US discount airlines have revealed plans to curtail growth, also citing excessive capacity, among other factors.
On 1 August, Spirit Airlines said it was deferring deliveries of Airbus A320neo-family jets and furloughing some 240 pilots, with the carrier’s chief commercial officer Matt Klein pointing to “over supply of industry capacity for the existing level of leisure demand”.
Similarly, on 30 July, JetBlue Airways revealed it had deferred deliveries of 44 incoming Airbus jets.
Executives at Spirit and JetBlue also attributed the moves to troubles with the Pratt & Whitney PW1100G turbofans that power their A320neo-family jets.
