ISTAT Jetrader - Winter 2020 - 17

Jude Bricker
CEO,
Sun Country Airlines

When were the first signs that this crisis was different
from those of the past?
Jude Bricker (JB): We were at ISTAT in March, and people
were starting to talk about it then. We saw bookings impacted
pretty late as compared to other airlines. Basically by the
second week of March, we started seeing falloffs in bookings.
That continued in a downward trend, really bottoming out
around the middle of April. And then the entire month of April,
we had cash receipts of a net zero, which is amazing, but that
was the bottom by far. We finished the second quarter with
positive EBITDA because we saw a pretty steady recovery
through June. And then in the U.S. as the southern states
dealt with their own waves of COVID-19, we saw some falloff
in July and August.
But our company is unique, I think. It helps to be small,
but we're also transitioning over to a big cargo operation.
And our cargo operations - main deck cargo - were larger
than our passenger operations in the month of September.
So, we made fully allocated profits in July and August. We're
cash flow positive and expecting to be cash flow positive in
October and November, so we're hanging in there. The federal
support that we got as a U.S. airline certainly helped out with
payroll protection.
We won't have to do any involuntary furloughing of line
employees, and we're feeling pretty good about things overall.
October, year over year, we'll be down about 10%, which
is well within where we can manage with the existing line
employees that we have.
What surprises arose from the pandemic
for your business?
JB: We basically picked up a third of our flying and moved
it into cargo. In April, we didn't have a single cargo flight. In
September, it was the biggest by departures. We'll continue

to do more cargo flights than any other kind of flying. Our
cargo will grow because we have two more deliveries
coming in October. We had all 31 of our passenger aircraft
in March when COVID came. We have now 10 more
aircraft that are freighter airplanes and will take on two
additional through the end of the year.
We also were lucky. It's part of the business plan,
but the timing was fortuitous. We didn't have any
commitments of deliveries other than those cargo
airplanes when we went into COVID. We have almost no
capital expenditures and, as you can imagine, aircraft
values are down dramatically. And we're out actually
shopping for additional passenger planes today to support
some opportunities we're seeing. We have three segments.
Our passenger business, which is down between 40 and
50% on a capacity basis, and revenues are down about
50%. And then we have a charter business, which is
almost fully recovered, maybe down 10%. In the fall, our
charter business is really supported with sports programs.
We support football and professional soccer leagues, and
that flying is doing quite well. FInally, we have our cargo
business, which is new this year. So, we're certainly
outperforming all the other passenger airlines that I'm
aware of. Now, we are not out of the woods yet. We're not
in a sustainable situation with debt service and things like
that. But we're close, and I think if trends continue, we're
feeling really good about where we are.
Based on your models, when do you expect to see
light at the end of the tunnel?
JB: I think, like everybody, that unless there is something
major happening with the virus, then we're not going to
see a substantial recovery - defined as recovery to 2018
levels - in passenger demand. Our view would be that
that would occur around the second quarter of 2021. We
have seasonality in our business to support first quarter
flying even at existing levels on a year-over-year basis,
so we're not too worried about the first quarter. But the
second quarter, we would like to see a recovery. And we
do have more assets than we're operating. So while we've
been able to shift a bunch of our flying over to cargo, we
have the fixed costs of that passenger business, which
has been under-allocated. That's a drag on our cash and
on earnings. So, we are dependent on a recovery, and our
expectation is summer of 2021 will be down some from
2019 but not nearly to the degree that we're experiencing
today. Regarding relief packages from the government,
we're expecting nothing more. There is discussion, and
the major airlines have been very vocal about wanting
an extension of the existing Payroll Protection Program.
It'd be good for us, but I think it's a bit of a long shot at
this point.
Jetrader

* WINTER 2020 * 1 7



ISTAT Jetrader - Winter 2020

Table of Contents for the Digital Edition of ISTAT Jetrader - Winter 2020

ISTAT Jetrader - Winter 2020
From the President
News & Events
Perspectives: Q&A With Rich Wiley of SKY Leasing
Winds of Change
10 Years of Air Shows
ISTAT Foundation
Appraisal: Airbus A330-300 and Boeing 767-300ER
At a Glance: Peter Hopkins
Advertiser Index
ISTAT Jetrader - Winter 2020 - Intro
ISTAT Jetrader - Winter 2020 - ISTAT Jetrader - Winter 2020
ISTAT Jetrader - Winter 2020 - Cover2
ISTAT Jetrader - Winter 2020 - 1
ISTAT Jetrader - Winter 2020 - From the President
ISTAT Jetrader - Winter 2020 - 3
ISTAT Jetrader - Winter 2020 - 4
ISTAT Jetrader - Winter 2020 - 5
ISTAT Jetrader - Winter 2020 - 6
ISTAT Jetrader - Winter 2020 - 7
ISTAT Jetrader - Winter 2020 - News & Events
ISTAT Jetrader - Winter 2020 - 9
ISTAT Jetrader - Winter 2020 - Perspectives: Q&A With Rich Wiley of SKY Leasing
ISTAT Jetrader - Winter 2020 - 11
ISTAT Jetrader - Winter 2020 - 12
ISTAT Jetrader - Winter 2020 - 13
ISTAT Jetrader - Winter 2020 - 14
ISTAT Jetrader - Winter 2020 - 15
ISTAT Jetrader - Winter 2020 - Winds of Change
ISTAT Jetrader - Winter 2020 - 17
ISTAT Jetrader - Winter 2020 - 18
ISTAT Jetrader - Winter 2020 - 19
ISTAT Jetrader - Winter 2020 - 20
ISTAT Jetrader - Winter 2020 - 21
ISTAT Jetrader - Winter 2020 - 22
ISTAT Jetrader - Winter 2020 - 23
ISTAT Jetrader - Winter 2020 - 24
ISTAT Jetrader - Winter 2020 - 25
ISTAT Jetrader - Winter 2020 - 10 Years of Air Shows
ISTAT Jetrader - Winter 2020 - 27
ISTAT Jetrader - Winter 2020 - 28
ISTAT Jetrader - Winter 2020 - 29
ISTAT Jetrader - Winter 2020 - 30
ISTAT Jetrader - Winter 2020 - 31
ISTAT Jetrader - Winter 2020 - 32
ISTAT Jetrader - Winter 2020 - 33
ISTAT Jetrader - Winter 2020 - 34
ISTAT Jetrader - Winter 2020 - 35
ISTAT Jetrader - Winter 2020 - 36
ISTAT Jetrader - Winter 2020 - 37
ISTAT Jetrader - Winter 2020 - ISTAT Foundation
ISTAT Jetrader - Winter 2020 - 39
ISTAT Jetrader - Winter 2020 - 40
ISTAT Jetrader - Winter 2020 - 41
ISTAT Jetrader - Winter 2020 - Appraisal: Airbus A330-300 and Boeing 767-300ER
ISTAT Jetrader - Winter 2020 - 43
ISTAT Jetrader - Winter 2020 - 44
ISTAT Jetrader - Winter 2020 - 45
ISTAT Jetrader - Winter 2020 - At a Glance: Peter Hopkins
ISTAT Jetrader - Winter 2020 - 47
ISTAT Jetrader - Winter 2020 - Advertiser Index
ISTAT Jetrader - Winter 2020 - Cover3
ISTAT Jetrader - Winter 2020 - Cover4
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