Sun Country curbs expansion as competition erodes airfares

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 $1.8m profit in the second quarter, down from a $21m profit in the second quarter of 2023. The company’s second-quarter revenue slipped 2.6% year on year to $254m. But revenue from its scheduled-airline operation sunk 21% year on year in the second quarter to $88m, with Bricker saying average fares declined 20% in one year. “Clearly, we flew more during off-peak periods than the demand environment could support.”<br/>