Sun Country Airlines Reports 4% Revenue Growth in Q1 2026, Driven by Cargo Revenue Surge

Sun Country Airlines Holdings, Inc. reported its financial results for the first quarter of 2026, revealing a total operating revenue of $338.4 million, a 4% increase from $326.6 million in the same period last year. The growth was primarily driven by a significant rise in cargo revenue, which surged 64% to $46.1 million, attributed to the addition of two cargo aircraft operated for Amazon and contractual rate increases. However, passenger revenue saw a slight decline, decreasing to $285.3 million from $285.9 million, reflecting a 12% drop in the number of passengers carried, which totaled approximately 1.03 million.

Operating expenses for the quarter increased by 11% to $301.5 million, up from $270.4 million in the prior year. This rise was influenced by higher aircraft fuel costs, which rose 13% to $72.9 million, and increased salaries and benefits, which climbed 12% to $104.2 million. The company also incurred $9.8 million in special charges related to the proposed merger with Allegiant Travel Company, which significantly impacted operating income, resulting in a decrease to $36.9 million from $56.2 million year-over-year. Net income fell by 34% to $24.1 million, compared to $36.5 million in the previous year, leading to a diluted earnings per share of $0.43.

In terms of operational metrics, Sun Country's total departures decreased to 13,794 from 12,964, while the average base fare per passenger increased by 16% to $142.59. The airline's load factor improved to 85.5%, up from 83.5% a year earlier, indicating better capacity utilization despite the drop in passenger numbers. The company ended the quarter with a total of 72 aircraft, including 22 cargo planes, and employed 3,276 staff, an increase from 3,124 in the previous year.

Strategically, Sun Country is in the process of merging with Allegiant, a move that is expected to close as early as May 13, 2026, pending shareholder and regulatory approvals. The merger agreement stipulates that each share of Sun Country common stock will be converted into $4.10 in cash and 0.1557 shares of Allegiant common stock. The company has also focused on expanding its cargo operations, which are expected to provide more stable revenue streams amid fluctuating passenger demand. Looking ahead, Sun Country anticipates continued growth in its cargo segment and aims to mitigate the impact of rising operational costs through strategic pricing and operational efficiencies.