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Sun Country Airlines’ Q3 cargo revenue from Amazon flying stays flat

Leisure airline provides crews for fleet of Amazon jets

Amazon Air provides a dozen Boeing 737-800 cargo jets (pictured) to Sun Country to fly on its behalf. (Photo: Jim Allen/FreightWaves)

Sun Country Airlines (NASDAQ: SCNY), known more for ferrying vacationers to beach destinations, said Tuesday that revenue from its dedicated Amazon cargo business dipped 2.9% to $24 million in the third quarter due to a special circumstance.

The Minneapolis-based carrier attributed the decline to a one-time payment from Amazon (NASDAQ: AMZN) during the third quarter of 2021 for flown, but not yet billed, flying done last year. Excluding the catch-up payment, cargo revenue was the same year over year.

Cargo block hours, a measure of time in service for Amazon, increased 2% from the prior-year quarter. Amazon makes fixed payments per aircraft regardless how much they are used in addition to money per block hour.

Executives said Amazon volumes have been consistent.

Sun Country has a unique business model in which it provides scheduled passenger service; charter flights for collegiate and professional sports teams, the U.S. Department of Defense, casinos and other customers; and cargo service as a contractor for Amazon Air, the online retailer’s in-house cargo airline.

Sun Country has 12 Boeing 737-800 converted freighters under its operating certificate that are subleased from Amazon. 

During the first nine months of 2022, the airline posted $65.9 million in cargo revenue, 3.2% less than a year ago. The decline reflects the one-off Amazon payment and the slower growth in e-commerce this year.

Overall, Sun Country’s adjusted earnings fell 28.6% to $16 million due to higher costs associated with fuel, Hurricane Ian, capacity constraints due to staffing and a new contract for pilots. Operating revenue increased by more than a quarter year over year to $221.7 million. Cargo represents about 10% of total revenues.

Management said demand for leisure travel is high.

Click here for more FreightWaves/American Shipper stories by Eric Kulisch. 

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Eric Kulisch

Eric is the Supply Chain and Air Cargo Editor at FreightWaves. An award-winning business journalist with extensive experience covering the logistics sector, Eric spent nearly two years as the Washington, D.C., correspondent for Automotive News, where he focused on regulatory and policy issues surrounding autonomous vehicles, mobility, fuel economy and safety. He has won two regional Gold Medals from the American Society of Business Publication Editors for government coverage and news analysis, and was voted best for feature writing and commentary in the Trade/Newsletter category by the D.C. Chapter of the Society of Professional Journalists. As associate editor at American Shipper Magazine for more than a decade, he wrote about trade, freight transportation and supply chains. Eric is based in Portland, Oregon. He can be reached for comments and tips at [email protected]