Sun Country Airlines Reports $1.13 Billion Revenue, Prepares for Merger with Allegiant Travel

Sun Country Airlines Holdings, Inc. reported a total operating revenue of $1.13 billion for the fiscal year ending December 31, 2025, marking a 5% increase from $1.08 billion in 2024. The growth was primarily driven by a significant 45% rise in cargo revenue, which reached $155 million, attributed to the addition of aircraft and contractual rate increases under the Amended and Restated Air Transportation Services Agreement (A&R ATSA) with Amazon. Passenger revenue, however, saw a modest increase of 1% to $923 million, as the company shifted focus towards its cargo operations, resulting in a 7% decrease in scheduled service departures.

Operating expenses rose by 6% to $1.03 billion, influenced by a 14% increase in salaries, wages, and benefits, which totaled $373 million, largely due to contractual pay increases and a 4% rise in employee headcount. Aircraft fuel expenses decreased by 10% to $213 million, reflecting an 8% drop in fuel costs per gallon. The company reported an operating income of $100.6 million, down 5% from the previous year, with an operating margin of 8.9%. Net income remained relatively stable at $52.8 million, compared to $52.9 million in 2024.

In terms of operational metrics, Sun Country's passenger count decreased to 4.2 million from 4.5 million in 2024, while the average fare per passenger increased by 4% to $166.17. The airline's average daily aircraft utilization was 7.1 hours, slightly down from 7.3 hours in the prior year. The company maintained a strong completion factor of 98.9%, indicating effective operational performance despite challenges.

Strategically, Sun Country is preparing for a merger with Allegiant Travel Company, announced on January 11, 2026. Under the terms of the merger, each share of Sun Country common stock will convert into $4.10 in cash and 0.1557 shares of Allegiant common stock. The merger is expected to close in the second half of 2026, subject to various regulatory approvals and shareholder votes. This merger is anticipated to enhance Sun Country's market position and operational capabilities, although it may also involve significant costs and operational disruptions during the transition period.

Looking ahead, Sun Country aims to continue leveraging its hybrid low-cost business model, focusing on both passenger and cargo services. The company plans to expand its cargo operations further, with an increase in the number of aircraft operated on behalf of Amazon from 20 to 22 in early 2026. The airline's management remains optimistic about navigating the competitive landscape and adapting to market conditions, while also addressing the challenges posed by inflation and fluctuating fuel prices.