Cover
Cover | 3 Months Ended |
Mar. 31, 2023 shares | |
Cover [Abstract] | |
Document Type | 10-Q |
Document Quarterly Report | true |
Document Period End Date | Mar. 31, 2023 |
Document Transition Report | false |
Entity File Number | 001-40217 |
Entity Registrant Name | Sun Country Airlines Holdings, Inc. |
Entity Incorporation, State or Country Code | DE |
Entity Tax Identification Number | 82-4092570 |
Entity Address, Address Line One | 2005 Cargo Road |
Entity Address, City or Town | Minneapolis |
Entity Address, State or Province | MN |
Entity Address, Postal Zip Code | 55450 |
City Area Code | 651 |
Local Phone Number | 681-3900 |
Title of 12(b) Security | Common Stock, par value $0.01 per share |
Trading Symbol | SNCY |
Security Exchange Name | NASDAQ |
Entity Current Reporting Status | Yes |
Entity Interactive Data Current | Yes |
Entity Filer Category | Accelerated Filer |
Entity Small Business | false |
Entity Emerging Growth Company | true |
Entity Ex Transition Period | false |
Entity Shell Company | false |
Entity Common Stock, Shares Outstanding | 56,241,005 |
Entity Central Index Key | 0001743907 |
Current Fiscal Year End Date | --12-31 |
Document Fiscal Year Focus | 2023 |
Document Fiscal Period Focus | Q1 |
Amendment Flag | false |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Mar. 31, 2023 | Dec. 31, 2022 |
Current Assets: | ||
Cash and Cash Equivalents | $ 71,587 | $ 92,086 |
Restricted Cash | 22,776 | 10,842 |
Investments | 171,638 | 178,936 |
Accounts Receivable, net of an allowance for credit losses of $245 and $231, respectively | 35,464 | 35,124 |
Short-term Lessor Maintenance Deposits | 1,279 | 1,241 |
Inventory, net of a reserve for obsolescence of $1,183 and $1,107, respectively | 6,805 | 7,659 |
Prepaid Expenses | 11,621 | 11,423 |
Other Current Assets | 4,823 | 8,179 |
Total Current Assets | 325,993 | 345,490 |
Property & Equipment, net: | ||
Finance Lease Assets | 261,991 | 261,991 |
Total Property & Equipment | 1,058,851 | 962,413 |
Accumulated Depreciation & Amortization | (190,580) | (176,746) |
Total Property & Equipment, net | 868,271 | 785,667 |
Other Assets: | ||
Goodwill | 222,223 | 222,223 |
Other Intangible Assets, net of accumulated amortization of $19,890 and $18,890, respectively | 86,109 | 85,110 |
Operating Lease Right-of-use Assets | 21,929 | 22,182 |
Aircraft Deposits | 9,374 | 9,134 |
Long-term Lessor Maintenance Deposits | 35,253 | 32,433 |
Deferred Tax Asset | 2,389 | 12,956 |
Other Assets | 10,185 | 9,217 |
Total Other Assets | 387,462 | 393,255 |
Total Assets | 1,581,726 | 1,524,412 |
Current Liabilities: | ||
Accounts Payable | 58,455 | 62,370 |
Accrued Salaries, Wages, and Benefits | 28,523 | 26,521 |
Accrued Transportation Taxes | 15,403 | 17,666 |
Air Traffic Liabilities | 141,613 | 157,995 |
Finance Lease Obligations | 18,506 | 17,990 |
Loyalty Program Liabilities | 9,664 | 13,963 |
Operating Lease Obligations | 6,578 | 6,296 |
Current Maturities of Long-term Debt, net | 66,194 | 57,548 |
Income Tax Receivable Agreement Liability | 8,165 | 2,260 |
Other Current Liabilities | 13,267 | 14,519 |
Total Current Liabilities | 366,368 | 377,128 |
Long-term Liabilities: | ||
Finance Lease Obligations | 228,513 | 233,306 |
Loyalty Program Liabilities | 4,135 | 1,474 |
Operating Lease Obligations | 19,521 | 19,836 |
Long-term Debt, net | 346,065 | 294,687 |
Income Tax Receivable Agreement Liability | 92,855 | 101,540 |
Other Long-term Liabilities | 3,262 | 3,729 |
Total Long-term Liabilities | 694,351 | 654,572 |
Total Liabilities | 1,060,719 | 1,031,700 |
Commitments and Contingencies (see Note 12) | ||
Common Stock, Number of Shares, Par Value and Other Disclosure [Abstract] | ||
Common stock, with $0.01 par value, 995,000,000 shares authorized, 58,364,752 and 58,217,647 issued and 56,241,005 and 57,325,238 outstanding at March 31, 2023 and December 31, 2022, respectively | 584 | 582 |
Preferred Stock, Number of Shares, Par Value and Other Disclosure [Abstract] | ||
Preferred stock, with $0.01 par value, 5,000,000 shares authorized, no shares issued and outstanding at March 31, 2023 and December 31, 2022 | 0 | 0 |
Treasury stock, at cost, 2,123,747 and 892,409 shares held at March 31, 2023 and December 31, 2022, respectively | (40,162) | (17,605) |
Additional Paid-In Capital | 500,627 | 488,494 |
Retained Earnings | 60,376 | 22,048 |
Accumulated Other Comprehensive Loss | (418) | (807) |
Total Stockholders' Equity | 521,007 | 492,712 |
Total Liabilities and Stockholders' Equity | 1,581,726 | 1,524,412 |
Aircraft and Flight Equipment | ||
Property & Equipment, net: | ||
Property & Equipment, net: | 643,924 | 636,584 |
Aircraft and Flight Equipment Held for Operating Lease | ||
Property & Equipment, net: | ||
Property & Equipment, net: | 92,627 | 0 |
Ground Equipment and Leasehold Improvements | ||
Property & Equipment, net: | ||
Property & Equipment, net: | 37,664 | 35,948 |
Computer Hardware and Software | ||
Property & Equipment, net: | ||
Property & Equipment, net: | 9,327 | 10,831 |
Rotable Parts | ||
Property & Equipment, net: | ||
Property & Equipment, net: | $ 13,318 | $ 17,059 |
CONDENSED CONSOLIDATED BALANC_2
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands | Mar. 31, 2023 | Dec. 31, 2022 |
Statement of Financial Position [Abstract] | ||
Accounts Receivable, allowance for credit losses | $ 245 | $ 231 |
Inventory, reserve for obsolescence | 1,183 | 1,107 |
Accumulated amortization | $ 19,890 | $ 18,890 |
Common stock-par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock, shares authorized (in shares) | 995,000,000 | 995,000,000 |
Common stock, shares issued (in shares) | 58,364,752 | 58,217,647 |
Preferred stock-par value (in dollars per share) | $ 0.01 | $ 0.01 |
Preferred stock, shares authorized (in shares) | 5,000,000 | 5,000,000 |
Preferred stock, shares issued (in shares) | 0 | 0 |
Preferred stock, shares outstanding (in shares) | 0 | 0 |
Treasury stock (in shares) | 2,123,747 | 892,409 |
Common stock, shares outstanding (in shares) | 56,241,005 | 57,325,238 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Operating Revenues: | ||
Total Operating Revenues | $ 294,115 | $ 226,525 |
Operating Expenses: | ||
Aircraft Fuel | 72,290 | 64,544 |
Salaries, Wages, and Benefits | 75,430 | 59,617 |
Aircraft Rent | 1,480 | 3,186 |
Maintenance | 13,039 | 11,995 |
Sales and Marketing | 9,929 | 8,628 |
Depreciation and Amortization | 19,460 | 15,328 |
Ground Handling | 11,038 | 7,958 |
Landing Fees and Airport Rent | 12,051 | 10,286 |
Other Operating, net | 23,615 | 23,150 |
Total Operating Expenses | 238,332 | 204,692 |
Operating Income | 55,783 | 21,833 |
Non-operating Income (Expense): | ||
Interest Income | 2,741 | 24 |
Interest Expense | (8,630) | (8,562) |
Other, net | (212) | (6,876) |
Total Non-operating Expense, net | (6,101) | (15,414) |
Income Before Income Tax | 49,682 | 6,419 |
Income Tax Expense | 11,354 | 2,782 |
Net Income | $ 38,328 | $ 3,637 |
Net Income per share to common stockholders: | ||
Basic (in dollars per share) | $ 0.68 | $ 0.06 |
Diluted (in dollars per share) | $ 0.64 | $ 0.06 |
Shares used for computation: | ||
Basic (in shares) | 56,630,656 | 57,907,655 |
Diluted (in shares) | 59,535,045 | 61,731,942 |
Passenger | ||
Operating Revenues: | ||
Total Operating Revenues | $ 267,269 | $ 202,033 |
Cargo | ||
Operating Revenues: | ||
Total Operating Revenues | 23,361 | 21,053 |
Other | ||
Operating Revenues: | ||
Total Operating Revenues | $ 3,485 | $ 3,439 |
CONDENSED CONSOLIDATED STATEM_2
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Other Comprehensive Income (Loss), Net of Tax [Abstract] | ||
Net Income | $ 38,328 | $ 3,637 |
Other Comprehensive Income: | ||
Net unrealized gains on Available-for-Sale securities, net of deferred tax expense of $116 and $—, respectively | 389 | 0 |
Other Comprehensive Income | 389 | 0 |
Comprehensive Income | $ 38,717 | $ 3,637 |
CONDENSED CONSOLIDATED STATEM_3
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY - USD ($) $ in Thousands | Total | Warrants | Common Stock | Treasury Stock | Additional Paid-in Capital | Retained Earnings | Accumulated Other Comprehensive (Loss) Income |
Warrants, outstanding, at beginning of period (in shares) at Dec. 31, 2021 | 1,643,660 | ||||||
Common stock, outstanding, at beginning of period (in shares) at Dec. 31, 2021 | 57,872,452 | ||||||
Balances, at beginning of period at Dec. 31, 2021 | $ 490,589 | $ 579 | $ 485,638 | $ 4,372 | |||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Stock Issued for Stock-Based Awards (in shares) | 91,868 | ||||||
Stock Issued for Stock-Based Awards | 523 | $ 1 | 522 | ||||
Net Income | 3,637 | 3,637 | |||||
Amazon warrants (in shares) | 189,652 | ||||||
Amazon Warrants | 1,400 | 1,400 | |||||
Stock-based Compensation | 920 | 920 | |||||
Warrants, outstanding, at end of period (in shares) at Mar. 31, 2022 | 1,833,312 | ||||||
Common stock, outstanding, at end of period (in shares) at Mar. 31, 2022 | 57,964,320 | ||||||
Balances, at end of period at Mar. 31, 2022 | $ 497,069 | $ 580 | 488,480 | 8,009 | |||
Warrants, outstanding, at beginning of period (in shares) at Dec. 31, 2022 | 2,402,268 | ||||||
Common stock, outstanding, at beginning of period (in shares) at Dec. 31, 2022 | 57,325,238 | 58,217,647 | |||||
Balances, at beginning of period at Dec. 31, 2022 | $ 492,712 | $ 582 | $ (17,605) | 488,494 | 22,048 | $ (807) | |
Treasury Stock, at beginning of period (in shares) at Dec. 31, 2022 | 892,409 | 892,409 | |||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Stock Issued for Stock-Based Awards (in shares) | 147,105 | ||||||
Stock Issued for Stock-Based Awards | $ 556 | $ 2 | 554 | ||||
Net Stock Settlement of Stock-Based Awards (in shares) | 406 | ||||||
Net Stock Settlement of Stock-Based Awards | (8) | $ (8) | |||||
Common stock repurchases (in shares) | 1,230,932 | ||||||
Common Stock Repurchases | (15,048) | $ (22,549) | 7,501 | ||||
Net Income | 38,328 | 38,328 | |||||
Amazon warrants (in shares) | 189,652 | ||||||
Amazon Warrants | 1,400 | 1,400 | |||||
Stock-based Compensation | 2,678 | 2,678 | |||||
Other Comprehensive Income | $ 389 | 389 | |||||
Warrants, outstanding, at end of period (in shares) at Mar. 31, 2023 | 2,591,920 | ||||||
Common stock, outstanding, at end of period (in shares) at Mar. 31, 2023 | 56,241,005 | 58,364,752 | |||||
Balances, at end of period at Mar. 31, 2023 | $ 521,007 | $ 584 | $ (40,162) | $ 500,627 | $ 60,376 | $ (418) | |
Treasury Stock, at end of period (in shares) at Mar. 31, 2023 | 2,123,747 | 2,123,747 |
CONDENSED CONSOLIDATED STATEM_4
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Cash flows from Operating Activities | ||
Net Income | $ 38,328 | $ 3,637 |
Adjustments to reconcile Net Income to Cash from Operating Activities: | ||
Depreciation and Amortization | 19,460 | 15,328 |
Deferred Income Taxes | 10,450 | 2,782 |
Other, net | 4,643 | 13,013 |
Changes in Operating Assets and Liabilities: | ||
Accounts Receivable | (468) | (1,577) |
Inventory | (305) | (346) |
Prepaid Expenses | (198) | (1,655) |
Lessor Maintenance Deposits | (2,858) | (3,919) |
Aircraft Deposits | (187) | (1,044) |
Other Assets | 581 | (6,262) |
Accounts Payable | (288) | 9,500 |
Accrued Transportation Taxes | (2,264) | 1,362 |
Air Traffic Liabilities | (16,382) | (7,616) |
Loyalty Program Liabilities | (1,638) | (2,344) |
Operating Lease Obligations | (1,434) | (3,240) |
Other Liabilities | 421 | 594 |
Net Cash Provided by Operating Activities | 47,861 | 18,213 |
Cash Flows from Investing Activities: | ||
Purchases of Property & Equipment | (104,978) | (49,683) |
Purchases of Investments | (24,228) | (3) |
Proceeds from the Maturities of Investments | 32,840 | 0 |
Other, net | 1,129 | 58 |
Net Cash Used in Investing Activities | (95,237) | (49,628) |
Cash Flows from Financing Activities: | ||
Common Stock Repurchases | (14,812) | 0 |
Proceeds from Borrowings | 71,280 | 77,986 |
Repayment of Finance Lease Obligations | (4,277) | (4,466) |
Repayment of Borrowings | (10,122) | (77,947) |
Other, net | (3,258) | (1,456) |
Net Cash Provided by (Used in) Financing Activities | 38,811 | (5,883) |
Net Decrease in Cash, Cash Equivalents and Restricted Cash | (8,565) | (37,298) |
Cash, Cash Equivalents and Restricted Cash--Beginning of the Period | 102,928 | 317,785 |
Cash, Cash Equivalents and Restricted Cash--End of the Period | 94,363 | 280,487 |
Non-cash transactions: | ||
Aircraft and Flight Equipment Acquired through Finance Leases | 0 | 19,928 |
Changes to Finance Lease Assets due to Operating and Finance Lease Modifications | $ 0 | $ 46,311 |
CONDENSED CONSOLIDATED STATEM_5
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) (Parenthetical) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Other Comprehensive Income (Loss), Net of Tax [Abstract] | ||
Deferred tax expense | $ 116 | $ 0 |
CONDENSED CONSOLIDATED STATEM_6
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Parentheticals) - USD ($) $ in Thousands | Mar. 31, 2023 | Dec. 31, 2022 | Mar. 31, 2022 | Dec. 31, 2021 |
Statement of Cash Flows [Abstract] | ||||
Cash and Cash Equivalents | $ 71,587 | $ 92,086 | $ 272,402 | |
Restricted Cash | 22,776 | 10,842 | 8,085 | |
Total Cash, Cash Equivalents and Restricted Cash | $ 94,363 | $ 102,928 | $ 280,487 | $ 317,785 |
BASIS OF PRESENTATION
BASIS OF PRESENTATION | 3 Months Ended |
Mar. 31, 2023 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
BASIS OF PRESENTATION | 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 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, 2022 as filed with the SEC ("2022 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, uncertainties in pilot staffing, the impact of macroeconomic conditions including inflationary pressures, and other factors, operating results for the three months ended March 31, 2023 are not necessarily indicative of operating results for future quarters or for the year ending December 31, 2023. |
CORONAVIRUS AID, RELIEF, AND EC
CORONAVIRUS AID, RELIEF, AND ECONOMIC SECURITY ACT | 3 Months Ended |
Mar. 31, 2023 | |
Unusual or Infrequent Items, or Both [Abstract] | |
CORONAVIRUS AID, RELIEF, AND ECONOMIC SECURITY ACT | CORONAVIRUS AID, RELIEF, AND ECONOMIC SECURITY ACTDuring the twelve months ended June 30, 2022, the compensation payable to an executive officer temporarily exceeded the restrictions on the payment of certain executive compensation under the Coronavirus Aid, Relief, and Economic Security Act ("CARES Act"). Once the issue was identified, the executive officer voluntarily rescinded the unvested portion of the equity grant that caused the executive’s compensation to exceed the CARES Act limit. At no point did the executive's cash compensation and equity awards that could be monetized exceed the CARES Act limit. The Company did not accrue any amounts related to this matter as of March 31, 2023. To the extent we are deemed to have failed to remain in full compliance with the CARES Act and the applicable rules and regulations thereunder, we may become subject to fines or other enforcement actions. |
REVENUE
REVENUE | 3 Months Ended |
Mar. 31, 2023 | |
Revenue from Contract with Customer [Abstract] | |
REVENUE | REVENUESun Country is a certificated air carrier generating Operating Revenues from Scheduled service, Charter service, Ancillary, Cargo and Other revenue. Scheduled service revenue mainly consists of base fares. Charter service revenue is primarily generated through service provided to the U.S. Department of Defense, 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, passenger interface 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 Air Transportation Services Agreement (the “ATSA”). Other revenue consists primarily of revenue from services in connection with Sun Country Vacations products and revenue related to certain transactions where the Company acts as a lessor. The amounts included in Other revenue are not material to the Company's results at the individual or aggregate level. The significant categories comprising Operating Revenues are as follows: Three Months Ended March 31, 2023 2022 Scheduled Service $ 152,657 $ 124,068 Charter Service 46,187 32,879 Ancillary 68,425 45,086 Passenger 267,269 202,033 Cargo 23,361 21,053 Other 3,485 3,439 Total Operating Revenues $ 294,115 $ 226,525 The Company attributes and measures its Operating Revenues by geographic region as defined by the 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 based on scheduled service to Latin America during the winter season and on military charter services. Total Operating Revenues by geographic region are as follows: Three Months Ended March 31, 2023 2022 Domestic $ 273,423 $ 208,591 Latin America 20,255 17,869 Other 437 65 Total Operating Revenues $ 294,115 $ 226,525 Contract Balances The Company’s contract assets primarily relate to costs incurred to get Amazon cargo aircraft ready for service. The balances are included in Other Current Assets and Other Assets on the Condensed Consolidated Balance Sheets. The Company’s significant contract liabilities are comprised of: 1) ticket sales for transportation that has 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 (reported within Other Current Liabilities and Other Long-term Liabilities on the Condensed Consolidated Balance Sheets). Contract Assets and Liabilities are as follows: March 31, 2023 December 31, 2022 Contract Assets Costs to fulfill contract with Amazon $ 2,026 $ 2,195 Total Contract Assets $ 2,026 $ 2,195 Contract Liabilities Air Traffic Liabilities $ 141,613 $ 157,995 Loyalty Program Liabilities 13,799 15,437 Amazon Deferred Up-front Payment 3,019 3,271 Total Contract Liabilities $ 158,431 $ 176,703 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 three months ended March 31, 2023, $123,574 of revenue was recognized in Passenger revenue that was included in the Air Traffic Liabilities as of December 31, 2022. 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. Changes in the Loyalty Program Liabilities are as follows: 2023 2022 Balance – January 1 $ 15,437 $ 19,718 Loyalty Points Earned 2,294 1,819 Loyalty Points Redeemed (1) (3,932) (4,163) Balance – March 31 $ 13,799 $ 17,374 ______________________ (1) Loyalty points are combined in one homogenous pool, that 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. |
EARNINGS PER SHARE
EARNINGS PER SHARE | 3 Months Ended |
Mar. 31, 2023 | |
Earnings Per Share [Abstract] | |
EARNINGS PER SHARE | EARNINGS PER SHARE The following table shows the computation of basic and diluted earnings per share: Three Months Ended March 31, 2023 2022 Numerator: Net Income $ 38,328 $ 3,637 Denominator: Weighted Average Common Shares Outstanding - Basic 56,630,656 57,907,655 Dilutive effect of Stock Options, RSUs and Warrants (1) 2,904,389 3,824,287 Weighted Average Common Shares Outstanding - Diluted 59,535,045 61,731,942 Basic earnings per share $ 0.68 $ 0.06 Diluted earnings per share $ 0.64 $ 0.06 ______________________ (1) There were 3,117,544 and 3,550,810 performance-based stock options outstanding at March 31, 2023 and 2022, respectively. As of March 31, 2023 and 2022, the Company expected approximately 64% and 75% of these options to vest, respectively. As of March 31, 2023, 43% of the eligible outstanding performance-based stock options have vested. These amounts are included in the measure above to the extent they are dilutive. |
AIRCRAFT
AIRCRAFT | 3 Months Ended |
Mar. 31, 2023 | |
Property, Plant and Equipment [Abstract] | |
AIRCRAFT | AIRCRAFT As of March 31, 2023, Sun Country's fleet consisted of 57 Boeing 737-NG aircraft, comprised of 53 Boeing 737-800s, three Boeing 737-900ERs and one Boeing 737-700. The following tables summarize the Company’s aircraft fleet activity for the three months ended March 31, 2023 and 2022, respectively: December 31, 2022 Additions Reclassifications Removals March 31, 2023 Passenger: Owned 29 — — — 29 Finance leases 11 — — — 11 Operating leases 2 — — — 2 Sun Country Airlines’ Fleet 42 — — — 42 Cargo: Aircraft Operated for Amazon 12 — — — 12 Other owned: Aircraft Held for Operating Lease — 3 — — 3 Total Aircraft 54 3 — — 57 December 31, 2021 Additions Reclassifications Removals March 31, 2022 Passenger: Owned 21 1 — — 22 Finance leases 9 1 2 — 12 Operating leases 6 — (2) — 4 Sun Country Airlines’ Fleet 36 2 — — 38 Cargo: Aircraft Operated for Amazon 12 — — — 12 Total Aircraft 48 2 — — 50 During the three months ended March 31, 2023, the Company entered into an agreement to acquire five 737-900ERs that are currently on lease to an unaffiliated airline ("Aircraft Held for Operating Lease"). As of March 31, 2023, three of the Aircraft Held for Operating Lease had been acquired. Subsequent to March 31, 2023, the transaction was completed resulting in the acquisition of the two remaining Aircraft Held for Operating Lease. The five Aircraft Held for Operating Lease were financed through a term loan arrangement. See Note 6 of these Condensed Consolidated Financial Statements for more information on this transaction. As of March 31, 2023, 29 of the owned aircraft and Aircraft Held for Operating Lease were financed and three aircraft were unencumbered. During the three months ended March 31, 2022, the Company executed lease amendments to purchase two aircraft at the end of the lease term, which modified the lease classification from operating leases to finance leases with expiration dates in fiscal year 2026. The Company also acquired two incremental 737-800 aircraft, one of which was financed using proceeds from the issuance of Class A and Class B pass-through trust certificates (the "2022-1 EETC") and another through a finance lease arrangement that is set to expire in fiscal year 2030. Depreciation, amortization, and rent expense on aircraft are as follows: Three Months Ended March 31, Aircraft Status Expense Type 2023 2022 Owned Depreciation $ 11,872 $ 8,673 Finance Leased Amortization 4,683 4,069 Operating Leased Aircraft Rent (1) 1,480 3,186 $ 18,035 $ 15,928 (1) Aircraft Rent expense includes credits for the amortization of over-market liabilities established at the Acquisition Date. |
ASSET ACQUISITIONS
ASSET ACQUISITIONS | 3 Months Ended |
Mar. 31, 2023 | |
Business Combination and Asset Acquisition [Abstract] | |
ASSET ACQUISITIONS | ASSET ACQUISITIONS During the three months ended March 31, 2023, the Company entered into an agreement to acquire five Aircraft Held for Operating Lease for approximately $158,000. On March 29, 2023, the Company acquired three of the Aircraft Held for Operating Lease. The table below reflects the cumulative balances recognized upon acquisition of the three aircraft on March 29, 2023: Asset Balance Sheet Classification Aircraft Held for Operating Lease Aircraft and Flight Equipment Held for Operating Lease $ 67,959 Maintenance Rights Asset Aircraft and Flight Equipment Held for Operating Lease 24,668 Over-Market Asset Other Intangible Assets, net 2,004 Total $ 94,631 The purchase price was assigned to the assets based upon their relative fair values as of the acquisition date. The Company estimated the fair value of the Aircraft Held for Operating Lease principally based on market appraisals. The appraisals were based on an analysis of the economic conditions impacting both the airline industry and broader economy, the current fuel price environment, aircraft order data, passenger traffic levels, and qualitative and quantitative characteristics impacting the value of the acquired aircraft. The fair value of the Maintenance Rights Asset was determined using a discounted cash flow method based on aircraft utilization levels at the time of the acquisition and the applicable rates as specified within the lease agreements. The fair value of the Over-Market Asset was determined using a discounted cash flow model that involves the comparison of contractual lease cash flows to the estimated at-market lease payments for an aircraft of the same type and age. On April 4, 2023, the Company completed the transaction resulting in the acquisition of the two additional Aircraft Held for Operating Lease for the remaining consideration of approximately $63,000. The acquisition cost of the aircraft will be allocated between Aircraft Held for Operating Lease, Maintenance Rights, and Over-Market Assets on a relative fair value basis. As of March 31, 2023, the Company's restricted cash balance also included $13,103 that was deposited in relation to the purchase of the two remaining Aircraft Held for Operating Lease. Upon acquisition, the deposited amounts were remitted to the seller. The purchase of the Aircraft Held for Operating Lease was financed primarily using the proceeds from a term loan credit facility with a face amount of $119,200 and the Company's cash. As of March 31, 2023, $71,280 of the term loan credit facility was outstanding with respect to three Aircraft Held for Operating Lease acquired during the three months ended March 31, 2023. The remaining $47,920 of financing available under the term loan credit facility was drawn on April 4, 2023 related to the purchase of the two remaining Aircraft Held for Operating Lease. For more information on the term loan credit facility, see Note 7 of these Condensed Consolidated Financial Statements. Aircraft Held for Operating Lease The Company obtained outright ownership of the Aircraft Held for Operating Lease upon purchase and assumed the position of lessor until the end of the lease terms. The Company is entitled to fixed payments over the remaining lease term for each aircraft, which expire at various dates between the fourth quarter of 2024 and the fourth quarter of 2025. On each lease expiry date, the Aircraft Held for Operating Lease will be redelivered to Sun Country and is expected to be inducted into the Company’s fleet. The rental revenue associated with the Aircraft Held for Operating Lease is recognized as it is earned and is included in Other revenue. The rental revenue was not material to the Company's results of operations for the three months ended March 31, 2023. Maintenance Rights Asset Upon purchase of the Aircraft Held for Operating Lease, the Company recognized a Maintenance Rights Asset which represents the Company’s contractual right to receive the aircraft in a specified maintenance condition at the end of the lease. The acquired leases contain an end of lease compensation clause whereby the lessee is required to remit a cash payment as a means to true-up the aircraft’s maintenance condition to full-life or perform the maintenance tasks needed to physically restore the airframe and engines to such a condition. The asset represents the difference between the Aircraft Held for Operating Lease’s physical maintenance condition as of the purchase date and the contractual return condition at the end of the lease term. The Maintenance Rights Asset is not depreciated over the lease term, nor will it accrete as additional life is consumed on the aircraft. Over-Market Asset Upon purchase of the Aircraft Held for Operating Lease, the Company recognized an intangible asset representing lease terms which are favorable to the lessor (unfavorable to the lessee) as compared with market terms of similar leases. The asset will be amortized over the remaining lease terms for the respective aircrafts, which ranges from approximately 1.7-2.7 years. The amortization will be recognized as a contra-revenue, offsetting the rental revenue associated with the Aircraft Held for Operating Lease included in Other revenue. |
DEBT
DEBT | 3 Months Ended |
Mar. 31, 2023 | |
Debt Disclosure [Abstract] | |
DEBT | 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 proceeds from the Revolving Credit Facility can be used for general corporate purposes, whereas the proceeds from the DDTL were to be used solely to finance the acquisition of aircraft or engines to be registered in the United States. The Credit Agreement includes financial covenants that require a minimum trailing 12-month EBITDAR ($87,700 as of March 31, 2022 and beyond) and minimum liquidity of $30,000 at the close of any business day. The Company was in compliance with these covenants as of March 31, 2023. During 2021, the Company drew $80,500 on the DDTL to purchase six aircraft, which were previously under operating leases. During 2022, the Company repaid the outstanding balance of the DDTL in full using proceeds received from the 2022-1 EETC, which terminated the DDTL. As a result, no amounts under the DDTL were available to the Company as of March 31, 2023. The Company recorded a $1,557 loss on extinguishment of debt during the three months ended March 31, 2022 in connection with the repayment of the DDTL, which represents the write-off of the unamortized deferred financing costs. As of March 31, 2023, the Company had $24,650 of financing available through the Revolving Credit Facility, as $350 had been pledged to support a letter of credit. Long-term Debt Term Loan Credit Facility During the three months ended March 31, 2023, the Company executed a term loan credit facility with a face amount of $119,200 for the purpose of financing the five Aircraft Held for Operating Lease. The loan is to be repaid monthly over 7 years. During the lease term, payments collected from the lessee will be applied directly to the repayment of principal and interest on the term loan credit facility. The Aircraft Held for Operating Lease, as well as the related lease payments received from the lessee, are pledged as collateral. During the three months ended March 31, 2023, the Company received gross proceeds of $71,280 with respect to three of the Aircraft Held for Operating Lease. An incremental $47,920 of gross proceeds were received subsequent to March 31, 2023 upon the completion of the transaction resulting in the acquisition of two additional Aircraft Held for Operating Lease. During the three months ended March 31, 2023, the Company recorded $1,388 in debt issuance costs associated with the term loan credit facility. The interest rate on the term loan credit facility is determined by 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 at the end of the lease term and a Loan-to-Value ("LTV") ratio calculation is completed. The interest rate in effect as of March 31, 2023 on the term loan was 8.6%. To the extent that the LTV exceeds 75%, a principal prepayment will be required in order to reduce the ratio to 75%. Amounts received under the end of lease maintenance compensation clause may be applied towards the LTV payment. Pass-Through Trust Certificates In March 2022, the Company arranged for the issuance of the 2022-1 EETC in an aggregate face amount of $188,277 for the purpose of financing or refinancing 13 aircraft. 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 used aircraft, which was completed in 2020. Long-term Debt includes the following: March 31, 2023 December 31, 2022 Notes payable under the Company's 2019-1 EETC agreement dated December 2019, with original loan amounts of $248,587 payable in bi-annual installments, in June and December, through December 2027. These notes bear interest at an annual rate between 4.13% and 6.95% and the weighted average interest rate is 4.73% as of March 31, 2023. $ 176,697 $ 176,697 Notes payable under the Company's 2022-1 EETC agreement dated March 2022, with a face amount of $188,277 payable in bi-annual installments, in March and September, through March 2031. These notes bear interest at an annual rate between 4.84% and 5.75% and the weighted average interest rate is 5.06% as of March 31, 2023. 168,897 179,019 Term Loan Credit Facility (see terms and conditions on pg 16) 71,280 — Total Debt 416,874 355,716 Less: Unamortized debt issuance costs (4,615) (3,481) Less: Current Maturities of Long-term Debt (66,194) (57,548) Total Long-term Debt, net $ 346,065 $ 294,687 Future maturities of the outstanding Debt are as follows: Debt Principal Amortization of Debt Net Debt Remainder of 2023 $ 55,025 $ (982) $ 54,043 2024 69,623 (1,097) 68,526 2025 74,216 (872) 73,344 2026 55,142 (637) 54,505 2027 58,280 (468) 57,812 Thereafter 104,588 (559) 104,029 Total as of March 31, 2023 $ 416,874 $ (4,615) $ 412,259 The fair value of Debt was $390,948 as of March 31, 2023 and $324,059 as of December 31, 2022. 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. |
INVESTMENTS
INVESTMENTS | 3 Months Ended |
Mar. 31, 2023 | |
Investments, Debt and Equity Securities [Abstract] | |
INVESTMENTS | INVESTMENTS A summary of debt securities by major security type: March 31, 2023 Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value Available-for-Sale Securities: (1) Municipal Debt Securities $ 27,601 $ 5 $ (132) $ 27,474 Corporate Debt Securities 89,045 — (386) 88,659 U.S. Government Agency Securities 49,174 69 (99) 49,144 Total $ 165,820 $ 74 $ (617) $ 165,277 December 31, 2022 Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value Available-for-Sale Securities: (1) Municipal Debt Securities $ 47,897 $ 16 $ (258) $ 47,655 Corporate Debt Securities 93,460 1 (683) 92,778 U.S. Government Agency Securities 32,326 2 (126) 32,202 Total $ 173,683 $ 19 $ (1,067) $ 172,635 (1) The Company also holds Certificates of Deposit that are included in Investments on the Condensed Consolidated Balance Sheets totaling $6,361 and $6,301 as of March 31, 2023 and December 31, 2022, respectively. As of March 31, 2023, the Company's investments that have unrealized losses have been in a continuous unrealized loss position for less than 12 months. 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. As of March 31, 2023, the Company believes that any unrealized losses are recoverable prior to the investment's conversion to cash. Therefore, the Company believes these losses to be temporary and no impairments have been recognized. |
FAIR VALUE MEASUREMENTS
FAIR VALUE MEASUREMENTS | 3 Months Ended |
Mar. 31, 2023 | |
Fair Value Disclosures [Abstract] | |
FAIR VALUE MEASUREMENTS | FAIR VALUE MEASUREMENTS The following table summarizes the assets measured at fair value on a recurring basis: March 31, 2023 Level 1 Level 2 Level 3 Total Cash & Cash Equivalents $ 71,587 $ — $ — $ 71,587 Available-for-Sale Securities: Municipal Debt Securities — 27,474 — 27,474 Corporate Debt Securities — 88,659 — 88,659 U.S. Government Agency Securities — 49,144 — 49,144 Total Available-for-Sale Securities — 165,277 — 165,277 Total Assets Measured at Fair Value on a Recurring Basis $ 71,587 $ 165,277 $ — $ 236,864 December 31, 2022 Level 1 Level 2 Level 3 Total Cash & Cash Equivalents $ 73,727 $ 18,359 $ — $ 92,086 Available-for-Sale Securities: Municipal Debt Securities — 47,655 — 47,655 Corporate Debt Securities — 92,778 — 92,778 U.S. Government Agency Securities — 32,202 — 32,202 Total Available-for-Sale Securities — 172,635 — 172,635 Total Assets Measured at Fair Value on a Recurring Basis $ 73,727 $ 190,994 $ — $ 264,721 |
INCOME TAXES
INCOME TAXES | 3 Months Ended |
Mar. 31, 2023 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | INCOME TAXES The Company's effective tax rate for the three months ended March 31, 2023 and 2022 was 22.9% and 43.3%, respectively. The effective tax rate represents a blend of federal and state taxes and includes the impact of certain nondeductible or nontaxable items. The 20.4% decrease in the effective tax rate was primarily due to the $6,800 non-deductible adjustment to increase the tax receivable liability related to the Tax Receivable Agreement (the "Tax Receivable Agreement" or "TRA") in the prior period, partially offset by stock compensation benefits. Tax Receivable Agreement The TRA balance as of March 31, 2023 and December 31, 2022 was $101,020 and $103,800, respectively. The TRA liability is an estimate and actual amounts payable under the Tax Receivable Agreement could differ from this estimate. During the three months ended March 31, 2023, the Company recorded an immaterial adjustment to the estimated TRA liability. During the three months ended March 31, 2022, the Company recorded an adjustment to the estimated TRA liability of $6,800. During the three months ended March 31, 2023, the Company made a payment of $2,425 to the pre-IPO stockholders (the “TRA holders”), which includes certain members of the Company's management and certain 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. |
STOCKHOLDERS' EQUITY
STOCKHOLDERS' EQUITY | 3 Months Ended |
Mar. 31, 2023 | |
Equity [Abstract] | |
STOCKHOLDERS' EQUITY | STOCKHOLDERS' EQUITY Equity Transactions Secondary Offerings On February 15, 2023, the Company announced the commencement of a secondary public offering of 5,250,000 shares of its Common Stock by an affiliate of certain investment funds managed by affiliates of Apollo Global Management, Inc. (“Apollo”). The underwriters were given an option to purchase an additional 787,500 shares of Common Stock. In connection with the offering, the underwriters agreed to sell to the Company, and the Company agreed to purchase from the underwriters, an aggregate of 750,000 shares of Common Stock at a price of $19.75 per share, the same price at which the underwriters purchased the Common Stock from the selling stockholder, for a total of $14,812. The Company incurred offering expenses of $528 in connection to this offering and did not receive any of the proceeds. Common Stock Repurchases On October 31, 2022, the Company’s Board of Directors authorized a $50,000 stock repurchase program. During the fourth quarter of 2022, the Company entered into a $25,000 Accelerated Share Repurchase Program. The Company received an initial delivery of 890,586 shares at an average price of $19.65 per share during the fourth quarter of 2022. The settlement of the program occurred during January 2023, upon which the Company received an additional 480,932 shares. In total, the Company repurchased 1,371,518 shares at an average price of $18.23 per share. The Company also repurchased $14,812 of its Common Stock as part of the secondary offering by the selling stockholder. See above for more details. As of March 31, 2023, the Company had $10,188 of Board authorization remaining to repurchase additional shares of its Common Stock. The stock repurchase program has no expiration date and may be modified, suspended, or terminated at any time. Amazon Agreement |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 3 Months Ended |
Mar. 31, 2023 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES | COMMITMENTS AND CONTINGENCIES The Company has contractual obligations and commitments primarily with regard to lease arrangements, repayment of debt (see Note 7 ), payments under the TRA (see Note 10 ), and probable future purchases of aircraft. During the second quarter of 2022, an owned aircraft was retired due to the aircraft sustaining damage beyond economic repair. The best estimate of this event was recorded during 2022. The contingency has been finalized and the impact of the retirement was not material to the Company's Condensed Consolidated Results of Operations. As of March 31, 2023 the Company had a commitment to lease three aircraft with deliveries spanning the fourth quarter of 2023 and the first quarter of 2024. The leases will each have annual lease payments of approximately $2,000 for six years. As of March 31, 2023, the Company had a commitment to purchase an incremental aircraft for approximately $24,500. The Company is expected to take delivery of the aircraft in the second quarter of 2023. 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. |
OPERATING SEGMENTS
OPERATING SEGMENTS | 3 Months Ended |
Mar. 31, 2023 | |
Segment Reporting [Abstract] | |
OPERATING SEGMENTS | OPERATING SEGMENTS The following tables present financial information for the Company’s two operating segments: Passenger and Cargo. Three Months Ended March 31, 2023 Three Months Ended March 31, 2022 Passenger Cargo Consolidated Passenger Cargo Consolidated Operating Revenues $ 270,754 $ 23,361 $ 294,115 $ 205,472 $ 21,053 $ 226,525 Non-Fuel Operating Expenses 140,637 25,405 166,042 120,810 19,338 140,148 Aircraft Fuel 72,266 24 72,290 64,544 — 64,544 Total Operating Expenses 212,903 25,429 238,332 185,354 19,338 204,692 Operating Income (Loss) $ 57,851 $ (2,068) 55,783 $ 20,118 $ 1,715 21,833 Interest Income 2,741 24 Interest Expense (8,630) (8,562) Other, net (212) (6,876) Income Before Income Tax $ 49,682 $ 6,419 |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 3 Months Ended |
Mar. 31, 2023 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENTS | SUBSEQUENT EVENTS The Company evaluated subsequent events for the period from the Balance Sheet date through April 28, 2023, the date that the Condensed Consolidated Financial Statements were available to be issued. During the three months ended March 31, 2023, the Company entered into an agreement to acquire five Aircraft Held for Operating Lease. On April 4, 2023, the Company completed the transaction resulting in the acquisition of two Aircraft Held for Operating Lease for total consideration of approximately $63,000. The purchase price was primarily financed with the remaining $47,920 available under the term loan credit facility and $13,103 of the Company’s restricted cash that was previously deposited. For more information on the subsequent events, see Note 5 , No te 6 , and Note 7 of the Notes to the Condensed Consolidated Financial Statements included elsewhere in this report. |
BASIS OF PRESENTATION (Policies
BASIS OF PRESENTATION (Policies) | 3 Months Ended |
Mar. 31, 2023 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Principles of Consolidation | 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 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, 2022 as filed with the SEC ("2022 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. |
Estimates and Assumptions | 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. |
Business Combinations and Asset
Business Combinations and Asset Acquisitions (Policies) | 3 Months Ended |
Mar. 31, 2023 | |
Business Combination and Asset Acquisition [Abstract] | |
Revenue Recognition Leases, Operating | Aircraft Held for Operating Lease The Company obtained outright ownership of the Aircraft Held for Operating Lease upon purchase and assumed the position of lessor until the end of the lease terms. The Company is entitled to fixed payments over the remaining lease term for each aircraft, which expire at various dates between the fourth quarter of 2024 and the fourth quarter of 2025. On each lease expiry date, the Aircraft Held for Operating Lease will be redelivered to Sun Country and is expected to be inducted into the Company’s fleet. The rental revenue associated with the Aircraft Held for Operating Lease is recognized as it is earned and is included in Other revenue. The rental revenue was not material to the Company's results of operations for the three months ended March 31, 2023. Maintenance Rights Asset Upon purchase of the Aircraft Held for Operating Lease, the Company recognized a Maintenance Rights Asset which represents the Company’s contractual right to receive the aircraft in a specified maintenance condition at the end of the lease. The acquired leases contain an end of lease compensation clause whereby the lessee is required to remit a cash payment as a means to true-up the aircraft’s maintenance condition to full-life or perform the maintenance tasks needed to physically restore the airframe and engines to such a condition. The asset represents the difference between the Aircraft Held for Operating Lease’s physical maintenance condition as of the purchase date and the contractual return condition at the end of the lease term. The Maintenance Rights Asset is not depreciated over the lease term, nor will it accrete as additional life is consumed on the aircraft. Over-Market Asset Upon purchase of the Aircraft Held for Operating Lease, the Company recognized an intangible asset representing lease terms which are favorable to the lessor (unfavorable to the lessee) as compared with market terms of similar leases. The asset will be amortized over the remaining lease terms for the respective aircrafts, which ranges from approximately 1.7-2.7 years. The amortization will be recognized as a contra-revenue, offsetting the rental revenue associated with the Aircraft Held for Operating Lease included in Other revenue. |
REVENUE (Tables)
REVENUE (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Revenue from Contract with Customer [Abstract] | |
Schedule of significant categories comprising operating revenues | The significant categories comprising Operating Revenues are as follows: Three Months Ended March 31, 2023 2022 Scheduled Service $ 152,657 $ 124,068 Charter Service 46,187 32,879 Ancillary 68,425 45,086 Passenger 267,269 202,033 Cargo 23,361 21,053 Other 3,485 3,439 Total Operating Revenues $ 294,115 $ 226,525 |
Schedule of operating revenues by geographic region | Total Operating Revenues by geographic region are as follows: Three Months Ended March 31, 2023 2022 Domestic $ 273,423 $ 208,591 Latin America 20,255 17,869 Other 437 65 Total Operating Revenues $ 294,115 $ 226,525 |
Summary of contract assets and liabilities | Contract Assets and Liabilities are as follows: March 31, 2023 December 31, 2022 Contract Assets Costs to fulfill contract with Amazon $ 2,026 $ 2,195 Total Contract Assets $ 2,026 $ 2,195 Contract Liabilities Air Traffic Liabilities $ 141,613 $ 157,995 Loyalty Program Liabilities 13,799 15,437 Amazon Deferred Up-front Payment 3,019 3,271 Total Contract Liabilities $ 158,431 $ 176,703 |
Schedule of change in contract with customer, liability | Changes in the Loyalty Program Liabilities are as follows: 2023 2022 Balance – January 1 $ 15,437 $ 19,718 Loyalty Points Earned 2,294 1,819 Loyalty Points Redeemed (1) (3,932) (4,163) Balance – March 31 $ 13,799 $ 17,374 ______________________ (1) Loyalty points are combined in one homogenous pool, that 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. |
EARNINGS PER SHARE (Tables)
EARNINGS PER SHARE (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Earnings Per Share [Abstract] | |
Summary of computation of basic and diluted earnings per share | The following table shows the computation of basic and diluted earnings per share: Three Months Ended March 31, 2023 2022 Numerator: Net Income $ 38,328 $ 3,637 Denominator: Weighted Average Common Shares Outstanding - Basic 56,630,656 57,907,655 Dilutive effect of Stock Options, RSUs and Warrants (1) 2,904,389 3,824,287 Weighted Average Common Shares Outstanding - Diluted 59,535,045 61,731,942 Basic earnings per share $ 0.68 $ 0.06 Diluted earnings per share $ 0.64 $ 0.06 ______________________ (1) There were 3,117,544 and 3,550,810 performance-based stock options outstanding at March 31, 2023 and 2022, respectively. As of March 31, 2023 and 2022, the Company expected approximately 64% and 75% of these options to vest, respectively. As of March 31, 2023, 43% of the eligible outstanding performance-based stock options have vested. These amounts are included in the measure above to the extent they are dilutive. |
AIRCRAFT (Tables)
AIRCRAFT (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Property, Plant and Equipment [Abstract] | |
Summary of aircraft fleet activity | The following tables summarize the Company’s aircraft fleet activity for the three months ended March 31, 2023 and 2022, respectively: December 31, 2022 Additions Reclassifications Removals March 31, 2023 Passenger: Owned 29 — — — 29 Finance leases 11 — — — 11 Operating leases 2 — — — 2 Sun Country Airlines’ Fleet 42 — — — 42 Cargo: Aircraft Operated for Amazon 12 — — — 12 Other owned: Aircraft Held for Operating Lease — 3 — — 3 Total Aircraft 54 3 — — 57 December 31, 2021 Additions Reclassifications Removals March 31, 2022 Passenger: Owned 21 1 — — 22 Finance leases 9 1 2 — 12 Operating leases 6 — (2) — 4 Sun Country Airlines’ Fleet 36 2 — — 38 Cargo: Aircraft Operated for Amazon 12 — — — 12 Total Aircraft 48 2 — — 50 |
Schedule of depreciation, amortization, and rent expense on aircraft | Depreciation, amortization, and rent expense on aircraft are as follows: Three Months Ended March 31, Aircraft Status Expense Type 2023 2022 Owned Depreciation $ 11,872 $ 8,673 Finance Leased Amortization 4,683 4,069 Operating Leased Aircraft Rent (1) 1,480 3,186 $ 18,035 $ 15,928 (1) Aircraft Rent expense includes credits for the amortization of over-market liabilities established at the Acquisition Date. |
ASSET ACQUISITIONS (Tables)
ASSET ACQUISITIONS (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Business Combination and Asset Acquisition [Abstract] | |
Asset Acquisition | The table below reflects the cumulative balances recognized upon acquisition of the three aircraft on March 29, 2023: Asset Balance Sheet Classification Aircraft Held for Operating Lease Aircraft and Flight Equipment Held for Operating Lease $ 67,959 Maintenance Rights Asset Aircraft and Flight Equipment Held for Operating Lease 24,668 Over-Market Asset Other Intangible Assets, net 2,004 Total $ 94,631 |
DEBT (Tables)
DEBT (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Debt Disclosure [Abstract] | |
Summary of long term debt | Long-term Debt includes the following: March 31, 2023 December 31, 2022 Notes payable under the Company's 2019-1 EETC agreement dated December 2019, with original loan amounts of $248,587 payable in bi-annual installments, in June and December, through December 2027. These notes bear interest at an annual rate between 4.13% and 6.95% and the weighted average interest rate is 4.73% as of March 31, 2023. $ 176,697 $ 176,697 Notes payable under the Company's 2022-1 EETC agreement dated March 2022, with a face amount of $188,277 payable in bi-annual installments, in March and September, through March 2031. These notes bear interest at an annual rate between 4.84% and 5.75% and the weighted average interest rate is 5.06% as of March 31, 2023. 168,897 179,019 Term Loan Credit Facility (see terms and conditions on pg 16) 71,280 — Total Debt 416,874 355,716 Less: Unamortized debt issuance costs (4,615) (3,481) Less: Current Maturities of Long-term Debt (66,194) (57,548) Total Long-term Debt, net $ 346,065 $ 294,687 |
Schedule of future maturities of the outstanding debt | Future maturities of the outstanding Debt are as follows: Debt Principal Amortization of Debt Net Debt Remainder of 2023 $ 55,025 $ (982) $ 54,043 2024 69,623 (1,097) 68,526 2025 74,216 (872) 73,344 2026 55,142 (637) 54,505 2027 58,280 (468) 57,812 Thereafter 104,588 (559) 104,029 Total as of March 31, 2023 $ 416,874 $ (4,615) $ 412,259 |
Investments (Tables)
Investments (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Investments, Debt and Equity Securities [Abstract] | |
Summary of debt securities by major security type | A summary of debt securities by major security type: March 31, 2023 Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value Available-for-Sale Securities: (1) Municipal Debt Securities $ 27,601 $ 5 $ (132) $ 27,474 Corporate Debt Securities 89,045 — (386) 88,659 U.S. Government Agency Securities 49,174 69 (99) 49,144 Total $ 165,820 $ 74 $ (617) $ 165,277 December 31, 2022 Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value Available-for-Sale Securities: (1) Municipal Debt Securities $ 47,897 $ 16 $ (258) $ 47,655 Corporate Debt Securities 93,460 1 (683) 92,778 U.S. Government Agency Securities 32,326 2 (126) 32,202 Total $ 173,683 $ 19 $ (1,067) $ 172,635 (1) The Company also holds Certificates of Deposit that are included in Investments on the Condensed Consolidated Balance Sheets totaling $6,361 and $6,301 as of March 31, 2023 and December 31, 2022, respectively. |
FAIR VALUE MEASUREMENTS (Tables
FAIR VALUE MEASUREMENTS (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Fair Value Disclosures [Abstract] | |
Summary of assets and liabilities measured at fair value on a recurring basis | The following table summarizes the assets measured at fair value on a recurring basis: March 31, 2023 Level 1 Level 2 Level 3 Total Cash & Cash Equivalents $ 71,587 $ — $ — $ 71,587 Available-for-Sale Securities: Municipal Debt Securities — 27,474 — 27,474 Corporate Debt Securities — 88,659 — 88,659 U.S. Government Agency Securities — 49,144 — 49,144 Total Available-for-Sale Securities — 165,277 — 165,277 Total Assets Measured at Fair Value on a Recurring Basis $ 71,587 $ 165,277 $ — $ 236,864 December 31, 2022 Level 1 Level 2 Level 3 Total Cash & Cash Equivalents $ 73,727 $ 18,359 $ — $ 92,086 Available-for-Sale Securities: Municipal Debt Securities — 47,655 — 47,655 Corporate Debt Securities — 92,778 — 92,778 U.S. Government Agency Securities — 32,202 — 32,202 Total Available-for-Sale Securities — 172,635 — 172,635 Total Assets Measured at Fair Value on a Recurring Basis $ 73,727 $ 190,994 $ — $ 264,721 |
OPERATING SEGMENTS (Tables)
OPERATING SEGMENTS (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Segment Reporting [Abstract] | |
Summary of financial information for the operating segments | The following tables present financial information for the Company’s two operating segments: Passenger and Cargo. Three Months Ended March 31, 2023 Three Months Ended March 31, 2022 Passenger Cargo Consolidated Passenger Cargo Consolidated Operating Revenues $ 270,754 $ 23,361 $ 294,115 $ 205,472 $ 21,053 $ 226,525 Non-Fuel Operating Expenses 140,637 25,405 166,042 120,810 19,338 140,148 Aircraft Fuel 72,266 24 72,290 64,544 — 64,544 Total Operating Expenses 212,903 25,429 238,332 185,354 19,338 204,692 Operating Income (Loss) $ 57,851 $ (2,068) 55,783 $ 20,118 $ 1,715 21,833 Interest Income 2,741 24 Interest Expense (8,630) (8,562) Other, net (212) (6,876) Income Before Income Tax $ 49,682 $ 6,419 |
REVENUE - Significant Categorie
REVENUE - Significant Categories of Operating Revenues (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
REVENUE | ||
Total Operating Revenues | $ 294,115 | $ 226,525 |
Passenger | ||
REVENUE | ||
Total Operating Revenues | 267,269 | 202,033 |
Scheduled Service | ||
REVENUE | ||
Total Operating Revenues | 152,657 | 124,068 |
Charter Service | ||
REVENUE | ||
Total Operating Revenues | 46,187 | 32,879 |
Ancillary | ||
REVENUE | ||
Total Operating Revenues | 68,425 | 45,086 |
Cargo | ||
REVENUE | ||
Total Operating Revenues | 23,361 | 21,053 |
Other | ||
REVENUE | ||
Total Operating Revenues | $ 3,485 | $ 3,439 |
REVENUE - Operating Revenues by
REVENUE - Operating Revenues by Geographic Region (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
REVENUE | ||
Total Operating Revenues | $ 294,115 | $ 226,525 |
Domestic | ||
REVENUE | ||
Total Operating Revenues | 273,423 | 208,591 |
Latin America | ||
REVENUE | ||
Total Operating Revenues | 20,255 | 17,869 |
Other | ||
REVENUE | ||
Total Operating Revenues | $ 437 | $ 65 |
REVENUE - Contract Balances (De
REVENUE - Contract Balances (Details) - USD ($) $ in Thousands | Mar. 31, 2023 | Dec. 31, 2022 | Mar. 31, 2022 | Dec. 31, 2021 |
REVENUE | ||||
Contract Assets | $ 2,026 | $ 2,195 | ||
Total Contract Liabilities | 158,431 | 176,703 | ||
Air Traffic Liabilities | ||||
REVENUE | ||||
Total Contract Liabilities | 141,613 | 157,995 | ||
Loyalty Program Liabilities | ||||
REVENUE | ||||
Total Contract Liabilities | 13,799 | 15,437 | $ 17,374 | $ 19,718 |
Amazon Deferred Up-front Payment | ||||
REVENUE | ||||
Total Contract Liabilities | 3,019 | 3,271 | ||
Costs to fulfill contract with Amazon | ||||
REVENUE | ||||
Contract Assets | $ 2,026 | $ 2,195 |
REVENUE - Additional Informatio
REVENUE - Additional Information (Details) $ in Thousands | 3 Months Ended |
Mar. 31, 2023 USD ($) | |
Passenger | |
REVENUE | |
Revenue recognized | $ 123,574 |
REVENUE - Loyalty Program (Deta
REVENUE - Loyalty Program (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Change in Contract with Customer, Liability [Roll Forward] | ||
Balance – January 1 | $ 176,703 | |
Balance – March 31 | 158,431 | |
Loyalty Program Liabilities | ||
Change in Contract with Customer, Liability [Roll Forward] | ||
Balance – January 1 | 15,437 | $ 19,718 |
Loyalty Points Earned | 2,294 | 1,819 |
Loyalty Points Redeemed | (3,932) | (4,163) |
Balance – March 31 | $ 13,799 | $ 17,374 |
EARNINGS PER SHARE (Details)
EARNINGS PER SHARE (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Numerator: | ||
Net Income | $ 38,328 | $ 3,637 |
Denominator: | ||
Weighted Average Common Shares Outstanding - Basic (in shares) | 56,630,656 | 57,907,655 |
Dilutive effect of Stock Options, RSUs and Warrants (in shares) | 2,904,389 | 3,824,287 |
Weighted Average Common Shares Outstanding - Diluted (in shares) | 59,535,045 | 61,731,942 |
Basic earnings per share (in dollars per share) | $ 0.68 | $ 0.06 |
Diluted earnings per share (in dollars per share) | $ 0.64 | $ 0.06 |
Performance-based stock options | ||
Denominator: | ||
Outstanding shares (in shares) | 3,117,544 | 3,550,810 |
Percentage of stock options expected to meet performance conditions | 64% | 75% |
Performance-Based Stock Options | ||
Denominator: | ||
Percentage of stock options vested and exercisable | 43% |
AIRCRAFT - Additional Informati
AIRCRAFT - Additional Information (Details) - aircraft | 3 Months Ended | |||||
Mar. 29, 2023 | Mar. 31, 2023 | Mar. 31, 2022 | Apr. 04, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
AIRCRAFT - Owned and Leased | ||||||
Number of aircraft | 57 | 50 | 54 | 48 | ||
Additions | 3 | 3 | 2 | |||
Number of aircraft purchased | 2 | |||||
Number of aircrafts financed using proceeds from issuance of pass-through trust certificates | 1 | |||||
Aircraft Held for Operating Lease | ||||||
AIRCRAFT - Owned and Leased | ||||||
Number of aircraft to be purchased | 5 | |||||
Number of aircraft purchased | 2 | |||||
Subsequent Event | Aircraft Held for Operating Lease | ||||||
AIRCRAFT - Owned and Leased | ||||||
Number of aircraft purchased | 2 | |||||
Boeing 737-800 | ||||||
AIRCRAFT - Owned and Leased | ||||||
Number of aircraft | 53 | |||||
Number of aircraft purchased | 2 | |||||
B-737-900 | ||||||
AIRCRAFT - Owned and Leased | ||||||
Number of aircraft | 3 | |||||
Boeing 737-700 | ||||||
AIRCRAFT - Owned and Leased | ||||||
Number of aircraft | 1 | |||||
Passenger | ||||||
AIRCRAFT - Owned and Leased | ||||||
Number of aircraft | 42 | 38 | 42 | 36 | ||
Additions | 0 | 2 | ||||
Number of aircrafts financed | 29 | |||||
Number of aircrafts unencumbered | 3 |
AIRCRAFT - Aircraft Fleet (Deta
AIRCRAFT - Aircraft Fleet (Details) - aircraft | 3 Months Ended | ||
Mar. 29, 2023 | Mar. 31, 2023 | Mar. 31, 2022 | |
Movement in Property, Plant and Equipment [Roll Forward] | |||
Balance at beginning of period | 54 | 48 | |
Additions | 3 | 3 | 2 |
Reclassifications | 0 | 0 | |
Removals | 0 | 0 | |
Balance at end of period | 57 | 50 | |
Passenger | |||
Movement in Property, Plant and Equipment [Roll Forward] | |||
Balance at beginning of period | 42 | 36 | |
Additions | 0 | 2 | |
Reclassifications | 0 | 0 | |
Removals | 0 | 0 | |
Balance at end of period | 42 | 38 | |
Passenger | Owned | |||
Movement in Property, Plant and Equipment [Roll Forward] | |||
Balance at beginning of period | 29 | 21 | |
Additions | 0 | 1 | |
Reclassifications | 0 | 0 | |
Removals | 0 | 0 | |
Balance at end of period | 29 | 22 | |
Passenger | Finance leases | |||
Movement in Property, Plant and Equipment [Roll Forward] | |||
Balance at beginning of period | 11 | 9 | |
Additions | 0 | 1 | |
Reclassifications | 0 | 2 | |
Removals | 0 | 0 | |
Balance at end of period | 11 | 12 | |
Passenger | Operating leases | |||
Movement in Property, Plant and Equipment [Roll Forward] | |||
Balance at beginning of period | 2 | 6 | |
Additions | 0 | 0 | |
Reclassifications | 0 | (2) | |
Removals | 0 | 0 | |
Balance at end of period | 2 | 4 | |
Cargo | Aircraft Operated for Amazon | |||
Movement in Property, Plant and Equipment [Roll Forward] | |||
Balance at beginning of period | 12 | 12 | |
Additions | 0 | 0 | |
Reclassifications | 0 | 0 | |
Removals | 0 | 0 | |
Balance at end of period | 12 | 12 | |
Other Aircraft | Aircraft Held for Operating Lease | |||
Movement in Property, Plant and Equipment [Roll Forward] | |||
Balance at beginning of period | 0 | ||
Additions | 3 | ||
Reclassifications | 0 | ||
Removals | 0 | ||
Balance at end of period | 3 |
AIRCRAFT - Depreciation, Amorti
AIRCRAFT - Depreciation, Amortization, and Rent Expense on Aircraft (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
AIRCRAFT - Owned and Leased | ||
Aircraft Rent | $ 1,480 | $ 3,186 |
Depreciation amortization and aircraft rent | 18,035 | 15,928 |
Owned | ||
AIRCRAFT - Owned and Leased | ||
Depreciation | 11,872 | 8,673 |
Finance leases | ||
AIRCRAFT - Owned and Leased | ||
Amortization | 4,683 | 4,069 |
Operating leases | ||
AIRCRAFT - Owned and Leased | ||
Aircraft Rent | $ 1,480 | $ 3,186 |
ASSET ACQUISITIONS - Additional
ASSET ACQUISITIONS - Additional Information (Details) $ in Thousands | 3 Months Ended | |||
Apr. 04, 2023 USD ($) aircraft | Mar. 29, 2023 aircraft | Mar. 31, 2023 USD ($) aircraft | Mar. 31, 2022 aircraft | |
Asset Acquisition [Line Items] | ||||
Additions | aircraft | 3 | 3 | 2 | |
Number of aircraft purchased | aircraft | 2 | |||
Aircraft Held for Operating Lease | ||||
Asset Acquisition [Line Items] | ||||
Number of aircraft to be purchased | aircraft | 5 | |||
Number of aircraft purchased | aircraft | 2 | |||
Restricted cash | $ 13,103 | |||
Minimum | ||||
Asset Acquisition [Line Items] | ||||
Amortization period (in years) | 1 year 8 months 12 days | |||
Maximum | ||||
Asset Acquisition [Line Items] | ||||
Amortization period (in years) | 2 years 8 months 12 days | |||
Subsequent Event | Aircraft Held for Operating Lease | ||||
Asset Acquisition [Line Items] | ||||
Consideration transferred | $ 63,000 | |||
Number of aircraft purchased | aircraft | 2 | |||
B-737-900 | Aircraft Held for Operating Lease | ||||
Asset Acquisition [Line Items] | ||||
Consideration transferred | $ 158,000 | |||
B-737-900 | Subsequent Event | ||||
Asset Acquisition [Line Items] | ||||
Lease gross proceeds | $ 47,920 | |||
Notes payable | Term Loan | ||||
Asset Acquisition [Line Items] | ||||
Face amount | 119,200 | |||
Secured Debt | Notes payable | ||||
Asset Acquisition [Line Items] | ||||
Term loan credit facility outstanding | $ 71,280 |
ASSET ACQUISITIONS - Asset Acqu
ASSET ACQUISITIONS - Asset Acquisition (Details) $ in Thousands | Mar. 29, 2023 USD ($) |
Asset Acquisition [Line Items] | |
Total | $ 94,631 |
Aircraft Held for Operating Lease | |
Asset Acquisition [Line Items] | |
Aircraft Held for Operating Lease | 67,959 |
Maintenance Rights Asset | |
Asset Acquisition [Line Items] | |
Maintenance Rights Asset | 24,668 |
Over-Market Asset | |
Asset Acquisition [Line Items] | |
Over-Market Asset | $ 2,004 |
DEBT - Credit Facilities (Detai
DEBT - Credit Facilities (Details) | 3 Months Ended | 12 Months Ended | ||
Feb. 10, 2021 USD ($) | Mar. 31, 2022 USD ($) | Dec. 31, 2021 USD ($) aircraft | Mar. 31, 2023 USD ($) | |
DEBT | ||||
Loss on extinguishment of debt | $ 1,557,000 | |||
Line of Credit | ||||
DEBT | ||||
Pledge for letter of credit | $ 350,000 | |||
Credit Facilities | Line of Credit | ||||
DEBT | ||||
Term of debt (in years) | 5 years | |||
Minimum EBITDAR required to be maintained | 87,700,000 | |||
Minimum liquidity required to be maintained | 30,000,000 | |||
Revolving Credit Facility | Line of Credit | Revolving Credit Facility | ||||
DEBT | ||||
Maximum borrowing capacity | $ 25,000,000 | |||
Line of credit facility, amount available | 24,650,000 | |||
Delayed Draw Term Loan Facility | ||||
DEBT | ||||
Number of aircrafts previously under operating leases | aircraft | 6 | |||
Delayed Draw Term Loan Facility | Loans Payable | ||||
DEBT | ||||
Maximum borrowing capacity | $ 90,000,000 | |||
Amount of draw | $ 80,500,000 | |||
Current borrowing capacity | $ 0 |
DEBT - Long-term Debt (Details)
DEBT - Long-term Debt (Details) | 1 Months Ended | 3 Months Ended | |||
Mar. 29, 2023 aircraft | Dec. 31, 2019 USD ($) aircraft | Mar. 31, 2023 USD ($) aircraft | Mar. 31, 2022 USD ($) aircraft | Apr. 04, 2023 USD ($) aircraft | |
DEBT | |||||
Number of aircraft purchased | 2 | ||||
Additions | 3 | 3 | 2 | ||
Aircraft Held for Operating Lease | |||||
DEBT | |||||
Number of aircraft purchased | 2 | ||||
Subsequent Event | Aircraft Held for Operating Lease | |||||
DEBT | |||||
Number of aircraft purchased | 2 | ||||
Subsequent Event | B-737-900 | |||||
DEBT | |||||
Lease gross proceeds | $ | $ 47,920,000 | ||||
Line of Credit | Secured Debt | |||||
DEBT | |||||
Margin (as a percent) | 0.10% | ||||
Interest rate | 8.60% | ||||
Loan-to -value ratio | 75% | ||||
Line of Credit | Secured Debt | Minimum | |||||
DEBT | |||||
Margin (as a percent) | 3.25% | ||||
Line of Credit | Secured Debt | Maximum | |||||
DEBT | |||||
Margin (as a percent) | 3.75% | ||||
Notes payable | |||||
DEBT | |||||
Debt issuance costs | $ | $ 1,388,000 | ||||
Notes payable | Secured Debt | |||||
DEBT | |||||
Term loan credit facility outstanding | $ | 71,280,000 | ||||
Term Loan | Notes payable | |||||
DEBT | |||||
Face amount | $ | $ 119,200,000 | ||||
Number of aircraft held for operating lease | 5 | ||||
Term of debt (in years) | 7 years | ||||
Notes payable under the Company's 2022-1 EETC agreement | Notes payable | |||||
DEBT | |||||
Face amount | $ | $ 188,277,000 | ||||
Number of aircraft financed by debt | 13 | ||||
Notes payable under the Company's 2022-1 EETC agreement | Notes payable | Minimum | |||||
DEBT | |||||
Interest rate | 4.84% | ||||
Notes payable under the Company's 2022-1 EETC agreement | Notes payable | Maximum | |||||
DEBT | |||||
Interest rate | 5.75% | ||||
Notes payable under the Company's 2019-1 EETC agreement | Notes payable | |||||
DEBT | |||||
Face amount | $ | $ 248,587,000 | ||||
Number of used aircrafts purchased or refinanced | 13 | ||||
Notes payable under the Company's 2019-1 EETC agreement | Notes payable | Minimum | |||||
DEBT | |||||
Interest rate | 4.13% | ||||
Notes payable under the Company's 2019-1 EETC agreement | Notes payable | Maximum | |||||
DEBT | |||||
Interest rate | 6.95% |
DEBT - Long-term Debt Schedule
DEBT - Long-term Debt Schedule (Details) - USD ($) | Mar. 31, 2023 | Dec. 31, 2022 | Mar. 31, 2022 | Dec. 31, 2019 |
DEBT | ||||
Total Debt | $ 416,874,000 | $ 355,716,000 | ||
Less: Unamortized debt issuance costs | (4,615,000) | (3,481,000) | ||
Less: Current Maturities of Long-term Debt | (66,194,000) | (57,548,000) | ||
Total Long-term Debt, net | 346,065,000 | 294,687,000 | ||
Notes payable under the Company's 2019-1 EETC agreement | Notes payable | ||||
DEBT | ||||
Total Debt | $ 176,697,000 | 176,697,000 | ||
Face amount | $ 248,587,000 | |||
Weighted average interest rate | 4.73% | |||
Notes payable under the Company's 2019-1 EETC agreement | Minimum | Notes payable | ||||
DEBT | ||||
Interest rate | 4.13% | |||
Notes payable under the Company's 2019-1 EETC agreement | Maximum | Notes payable | ||||
DEBT | ||||
Interest rate | 6.95% | |||
Notes payable under the Company's 2022-1 EETC agreement | Notes payable | ||||
DEBT | ||||
Total Debt | $ 168,897,000 | 179,019,000 | ||
Face amount | $ 188,277,000 | |||
Weighted average interest rate | 5.06% | |||
Notes payable under the Company's 2022-1 EETC agreement | Minimum | Notes payable | ||||
DEBT | ||||
Interest rate | 4.84% | |||
Notes payable under the Company's 2022-1 EETC agreement | Maximum | Notes payable | ||||
DEBT | ||||
Interest rate | 5.75% | |||
Delayed Draw Term Loan Facility | ||||
DEBT | ||||
Total Debt | $ 71,280,000 | $ 0 |
DEBT - Future Maturities of the
DEBT - Future Maturities of the Outstanding Debt (Details) - USD ($) $ in Thousands | Mar. 31, 2023 | Dec. 31, 2022 |
Debt Principal Payments | ||
Remainder of 2023 | $ 55,025 | |
2024 | 69,623 | |
2025 | 74,216 | |
2026 | 55,142 | |
2027 | 58,280 | |
Thereafter | 104,588 | |
Total | 416,874 | $ 355,716 |
Amortization of Debt Issuance Costs | ||
Remainder of 2023 | (982) | |
2024 | (1,097) | |
2025 | (872) | |
2026 | (637) | |
2027 | (468) | |
Thereafter | (559) | |
Total | (4,615) | $ (3,481) |
Net Debt | ||
Remainder of 2023 | 54,043 | |
2024 | 68,526 | |
2025 | 73,344 | |
2026 | 54,505 | |
2027 | 57,812 | |
Thereafter | 104,029 | |
Net Debt | $ 412,259 |
DEBT - Fair Value (Details)
DEBT - Fair Value (Details) - USD ($) $ in Thousands | Mar. 31, 2023 | Dec. 31, 2022 |
Debt Disclosure [Abstract] | ||
Fair value | $ 390,948 | $ 324,059 |
Investments (Details)
Investments (Details) - USD ($) $ in Thousands | Mar. 31, 2023 | Dec. 31, 2022 |
Debt Securities, Available-for-Sale [Line Items] | ||
Amortized Cost | $ 165,820 | $ 173,683 |
Gross Unrealized Gains | 74 | 19 |
Gross Unrealized Losses | (617) | (1,067) |
Fair Value | 165,277 | 172,635 |
Municipal Debt Securities | ||
Debt Securities, Available-for-Sale [Line Items] | ||
Amortized Cost | 27,601 | 47,897 |
Gross Unrealized Gains | 5 | 16 |
Gross Unrealized Losses | (132) | (258) |
Fair Value | 27,474 | 47,655 |
Corporate Debt Securities | ||
Debt Securities, Available-for-Sale [Line Items] | ||
Amortized Cost | 89,045 | 93,460 |
Gross Unrealized Gains | 0 | 1 |
Gross Unrealized Losses | (386) | (683) |
Fair Value | 88,659 | 92,778 |
U.S. Government Agency Securities | ||
Debt Securities, Available-for-Sale [Line Items] | ||
Amortized Cost | 49,174 | 32,326 |
Gross Unrealized Gains | 69 | 2 |
Gross Unrealized Losses | (99) | (126) |
Fair Value | 49,144 | 32,202 |
Certificates of Deposit | ||
Debt Securities, Available-for-Sale [Line Items] | ||
Certificates of deposit | $ 6,361 | $ 6,301 |
FAIR VALUE MEASUREMENTS (Detail
FAIR VALUE MEASUREMENTS (Details) - USD ($) $ in Thousands | Mar. 31, 2023 | Dec. 31, 2022 |
FAIR VALUE MEASUREMENTS | ||
Available-for-Sale Securities: | $ 165,277 | $ 172,635 |
Municipal Debt Securities | ||
FAIR VALUE MEASUREMENTS | ||
Available-for-Sale Securities: | 27,474 | 47,655 |
Corporate Debt Securities | ||
FAIR VALUE MEASUREMENTS | ||
Available-for-Sale Securities: | 88,659 | 92,778 |
U.S. Government Agency Securities | ||
FAIR VALUE MEASUREMENTS | ||
Available-for-Sale Securities: | 49,144 | 32,202 |
Recurring | ||
FAIR VALUE MEASUREMENTS | ||
Cash & Cash Equivalents | 71,587 | 92,086 |
Available-for-Sale Securities: | 165,277 | 172,635 |
Total Assets Measured at Fair Value on a Recurring Basis | 236,864 | 264,721 |
Recurring | Municipal Debt Securities | ||
FAIR VALUE MEASUREMENTS | ||
Available-for-Sale Securities: | 27,474 | 47,655 |
Recurring | Corporate Debt Securities | ||
FAIR VALUE MEASUREMENTS | ||
Available-for-Sale Securities: | 88,659 | 92,778 |
Recurring | U.S. Government Agency Securities | ||
FAIR VALUE MEASUREMENTS | ||
Available-for-Sale Securities: | 49,144 | 32,202 |
Recurring | Level 1 | ||
FAIR VALUE MEASUREMENTS | ||
Cash & Cash Equivalents | 71,587 | 73,727 |
Available-for-Sale Securities: | 0 | 0 |
Total Assets Measured at Fair Value on a Recurring Basis | 71,587 | 73,727 |
Recurring | Level 1 | Municipal Debt Securities | ||
FAIR VALUE MEASUREMENTS | ||
Available-for-Sale Securities: | 0 | 0 |
Recurring | Level 1 | Corporate Debt Securities | ||
FAIR VALUE MEASUREMENTS | ||
Available-for-Sale Securities: | 0 | 0 |
Recurring | Level 1 | U.S. Government Agency Securities | ||
FAIR VALUE MEASUREMENTS | ||
Available-for-Sale Securities: | 0 | 0 |
Recurring | Level 2 | ||
FAIR VALUE MEASUREMENTS | ||
Cash & Cash Equivalents | 0 | 18,359 |
Available-for-Sale Securities: | 165,277 | 172,635 |
Total Assets Measured at Fair Value on a Recurring Basis | 165,277 | 190,994 |
Recurring | Level 2 | Municipal Debt Securities | ||
FAIR VALUE MEASUREMENTS | ||
Available-for-Sale Securities: | 27,474 | 47,655 |
Recurring | Level 2 | Corporate Debt Securities | ||
FAIR VALUE MEASUREMENTS | ||
Available-for-Sale Securities: | 88,659 | 92,778 |
Recurring | Level 2 | U.S. Government Agency Securities | ||
FAIR VALUE MEASUREMENTS | ||
Available-for-Sale Securities: | 49,144 | 32,202 |
Recurring | Level 3 | ||
FAIR VALUE MEASUREMENTS | ||
Cash & Cash Equivalents | 0 | 0 |
Available-for-Sale Securities: | 0 | 0 |
Total Assets Measured at Fair Value on a Recurring Basis | 0 | 0 |
Recurring | Level 3 | Municipal Debt Securities | ||
FAIR VALUE MEASUREMENTS | ||
Available-for-Sale Securities: | 0 | 0 |
Recurring | Level 3 | Corporate Debt Securities | ||
FAIR VALUE MEASUREMENTS | ||
Available-for-Sale Securities: | 0 | 0 |
Recurring | Level 3 | U.S. Government Agency Securities | ||
FAIR VALUE MEASUREMENTS | ||
Available-for-Sale Securities: | $ 0 | $ 0 |
INCOME TAXES (Details)
INCOME TAXES (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2023 | Mar. 31, 2022 | Dec. 31, 2022 | |
Income Tax Disclosure [Abstract] | |||
Effective tax rate | 22.90% | 43.30% | |
Effective Income Tax Rate Reconciliation, Percent, Decrease | (20.40%) | ||
Increase to the tax receivable agreement liability | $ 6,800 | ||
Non-current liability recognized | $ 101,020 | $ 103,800 | |
Payment to stockholders | $ 2,425 |
STOCKHOLDERS' EQUITY (Details)
STOCKHOLDERS' EQUITY (Details) $ / shares in Units, $ in Thousands | 1 Months Ended | 3 Months Ended | |||||
Feb. 15, 2023 USD ($) $ / shares shares | Dec. 13, 2019 item $ / shares shares | Jan. 31, 2023 $ / shares shares | Mar. 31, 2023 USD ($) shares | Dec. 31, 2022 USD ($) $ / shares shares | Mar. 31, 2022 shares | Oct. 31, 2022 USD ($) | |
Class of Stock [Line Items] | |||||||
Offering price (in dollars per share) | $ / shares | $ 19.75 | ||||||
Offering price total | $ | $ 14,812 | $ 15,048 | |||||
Offering expenses | $ | $ 528 | ||||||
Stock repurchased (in shares) | 480,932 | ||||||
Stocks repurchased (in shares) | 1,371,518 | ||||||
Amazon Agreement | |||||||
Class of Stock [Line Items] | |||||||
Term of agreement (in years) | 6 years | ||||||
Number of extension option | item | 2 | ||||||
Term of renewal of agreement (in years) | 2 years | ||||||
Threshold term of agreement (in years) | 10 years | ||||||
Warrants issued (in shares) | 9,482,606 | ||||||
Exercise price (in dollars per share) | $ / shares | $ 15.17 | ||||||
Warrants vested (in shares) | 189,652 | 189,652 | |||||
Cumulative warrants vested (in shares) | 2,591,920 | 1,833,312 | |||||
Underwriters option | |||||||
Class of Stock [Line Items] | |||||||
Secondary public offering (in shares) | 787,500 | ||||||
Common stock repurchases (in shares) | 750,000 | ||||||
Secondary Public Stock Offering | |||||||
Class of Stock [Line Items] | |||||||
Secondary public offering (in shares) | 5,250,000 | ||||||
2022 Repurchase Program | |||||||
Class of Stock [Line Items] | |||||||
Repurchase program, authorized amount | $ | $ 25,000 | $ 50,000 | |||||
Stock repurchased (in shares) | 890,586 | ||||||
Accelerated share repurchases (in dollars per share) | $ / shares | $ 18.23 | $ 19.65 | |||||
Remaining authorized repurchase amount | $ | $ 10,188 |
COMMITMENTS AND CONTINGENCIES (
COMMITMENTS AND CONTINGENCIES (Details) $ in Thousands | Mar. 31, 2023 USD ($) aircraft |
Long-term Purchase Commitment [Line Items] | |
Number of aircraft to lease | aircraft | 3 |
Lease term (in years) | 6 years |
Incremental Aircraft | |
Long-term Purchase Commitment [Line Items] | |
Commitment | $ 24,500 |
Commitments | |
Long-term Purchase Commitment [Line Items] | |
Commitment to purchase | $ 2,000 |
OPERATING SEGMENTS (Details)
OPERATING SEGMENTS (Details) $ in Thousands | 3 Months Ended | |
Mar. 31, 2023 USD ($) segment | Mar. 31, 2022 USD ($) | |
OPERATING SEGMENTS | ||
Number of operating segments | segment | 2 | |
Total Operating Revenues | $ 294,115 | $ 226,525 |
Non-Fuel Operating Expenses | 166,042 | 140,148 |
Aircraft Fuel | 72,290 | 64,544 |
Total Operating Expenses | 238,332 | 204,692 |
Operating Income (Loss) | 55,783 | 21,833 |
Interest Income | 2,741 | 24 |
Interest Expense | (8,630) | (8,562) |
Other, net | (212) | (6,876) |
Income Before Income Tax | 49,682 | 6,419 |
Passenger | ||
OPERATING SEGMENTS | ||
Total Operating Revenues | 270,754 | 205,472 |
Non-Fuel Operating Expenses | 140,637 | 120,810 |
Aircraft Fuel | 72,266 | 64,544 |
Total Operating Expenses | 212,903 | 185,354 |
Operating Income (Loss) | 57,851 | 20,118 |
Cargo | ||
OPERATING SEGMENTS | ||
Total Operating Revenues | 23,361 | 21,053 |
Non-Fuel Operating Expenses | 25,405 | 19,338 |
Aircraft Fuel | 24 | 0 |
Total Operating Expenses | 25,429 | 19,338 |
Operating Income (Loss) | $ (2,068) | $ 1,715 |
SUBSEQUENT EVENTS (Details)
SUBSEQUENT EVENTS (Details) $ in Thousands | 3 Months Ended | ||
Apr. 04, 2023 USD ($) aircraft | Mar. 31, 2023 USD ($) aircraft | Mar. 31, 2022 aircraft | |
Subsequent Event [Line Items] | |||
Number of aircraft purchased | aircraft | 2 | ||
Aircraft Held for Operating Lease | |||
Subsequent Event [Line Items] | |||
Number of aircraft to be purchased | aircraft | 5 | ||
Number of aircraft purchased | aircraft | 2 | ||
Restricted cash | $ | $ 13,103 | ||
Aircraft Held for Operating Lease | B-737-900 | |||
Subsequent Event [Line Items] | |||
Consideration transferred | $ | $ 158,000 | ||
Subsequent Event | B-737-900 | |||
Subsequent Event [Line Items] | |||
Lease gross proceeds | $ | $ 47,920 | ||
Subsequent Event | Aircraft Held for Operating Lease | |||
Subsequent Event [Line Items] | |||
Number of aircraft purchased | aircraft | 2 | ||
Consideration transferred | $ | $ 63,000 |