US’s Sun Country Airlines eyes more used 737-800s
Sun Country Airlines (SY, Minneapolis/St. Paul) is planning to add eight second-hand B737-800s to its fleet this year, seven of which have already been identified and contracted.
“In January 2022, we entered into letters of intent (LOI) to add five B737-800 aircraft to the Sun Country fleet in 2022. In addition to the two aircraft that were acquired in 2021 with deliveries scheduled in 2022, seven of the eight planned adds for this year have already been identified,” the leisure-focused ultra-low-cost carrier disclosed in its annual results.
The ch-aviation fleets advanced module shows that Sun Country Airlines currently operates one 21.3-year-old B737-700 and thirty-five -800s, which are 15 years old on average. The airline owns the bulk of its passenger fleet with just eight -800s on dry-lease. Nearly all of its passenger B737s were sourced from the second-hand market with just six -800s delivered new.
Sun Country is continuing to evaluate the market as it sees an abundant supply of attractively-priced mid-life B737s.
“We continue to see attractive deals in the market, we’re very active. And to the extent that we see really good deals, maybe we frontload the fleet a little bit, we will do that. The balance sheet is not a concern, we’re very well-capitalised. We have access to whatever the financing that we need at really attractive rates. The only limiter at this point is really the staffing side, our ability to train pilots to get them through and fly the aircraft,” President and Chief Financial Officer Dave Davis said during an earnings call.
The airline also operates twelve B737-800(BCF)s dry-leased from GECAS under a CMI deal with Amazon.com. It does not plan to grow its freighter fleet for the time being.
Chief Executive Jude Bricker underlined that the airline would focus its passenger operations on Minneapolis/St. Paul despite the airport being a base for Delta Air Lines (DL, Atlanta Hartsfield Jackson). Bricker stressed that the two airlines cater to different groups of passengers with Sun Country Airlines operating peak-season leisure routes to sun destinations. Because of its unique business model, Bricker sees little benefit to Sun Country Airlines from the proposed merger of Frontier Airlines and Spirit Airlines.
“We don’t have a lot of overlap with either of those carriers … Minneapolis/St. Paul hasn’t been very successful for them. And I don’t think that changes with them as a single company. So, my view is we don’t have a lot of overlap with them now, and we won’t have a lot of overlap with them in the future … There’s no real positive, but it also isn’t really a negative,” Bricker explained.