Sun Country Airlines Reports First Quarter 2023 Results

Revenue of $294 million, Sun Country’s highest on record

Sun Country Airlines this week reported financial results for its first quarter ended March 31, 2023.

“Sun Country’s unique, diversified business model continues to deliver strong results,” said Jude Bricker, Chief Executive Officer of Sun Country. “The revenue environment remains resilient, as we saw a 20.8% increase in total average fare and a gain of 8.6 percentage points in load factor in the first quarter versus 2022. This demand strength helped deliver a first quarter GAAP operating income margin of 19.0% and an adjusted operating income margin of 19.9%(2), easily exceeding the first quarter of last year by over 9 percentage points. We delivered these outstanding results despite a winter season at our Minneapolis-St. Paul base that was the third snowiest on record. I want to thank our dedicated team of employees for their extraordinary efforts this winter.”

For the quarter ended March 31, 2023, Sun Country reported net income of $38 million and income before income tax of $50 million, on $294 million of revenue. Adjusted income before income tax for the quarter was $53 million(2). GAAP operating income during the quarter was $56 million, while adjusted operating income was $58 million(2).  

“We continue to see strength across our scheduled service, charter and cargo businesses,” said Dave Davis, President and Chief Financial Officer. “Total revenue was up nearly 30% year-over-year, with Scheduled Service TRASM(3) up 34.7% and TRASM(4), including charter revenue, up 30.6% versus the first quarter of 2022. GAAP operating income increased 155% while adjusted operating income was up 157% year-over-year, generating a GAAP operating margin of 19.0% and an adjusted operating income margin of nearly 20% in our seasonally strongest quarter. During the first quarter, our unit costs were negatively impacted by decreased aircraft utilization levels. In the second quarter, we expect total block hour growth of at least 11% versus last year, and pressure on non-fuel CASM should ease during the year. We are also excited to have acquired five 737-900ER aircraft which are currently on lease to Oman Air. We will obtain the lease revenue from Oman Air until the expiration of the leases and the aircraft are delivered to us beginning in late 2024 and continuing through 2025. The 737-900ER is a new fleet variant for Sun Country and we expect it to create new opportunities for our network.”

Notable Highlights

Ryanair's petition reaches 600,000 signatures ahead of Monday's French ATC strike.

Over 600,000 passengers have signed Ryanair's “Protect Passengers: Keep EU Skies Open” petition calling on the EU Commission President Ursula von der Leyen to take immediate action to protect European citizens’ Freedom of Movement and overflights during French ATC strikes.

The budget carrier where says that when the petition reaches 1 million signatures it will submit it to the EU Commission and demand action be taken.

The petition was started 5 weeks ago by the low-fare-high-fee airline from people it says are passengers that are sick and tired of having their travel plans cancelled at short notice due to French ATC strikes.

Ryanair contends that passengers' right to Freedom of Movement overshadows and overrules other citizens' rights to strike for fair pay. 

In the first 4 months of 2023, there have been over 50 days of French ATC strikes during which Ryanair cancelled more than 3,700 flights.

The airline says France uses Minimum Service Legislation to protect French domestic flights, while EU overflights from Germany, Spain, Italy, the UK and Ireland are disproportionately cancelled. Ryanair says this is unfair and must change. Italy and Greece already protect overflights during ATC strikes and the EU Commission must now insist that France does likewise.

A Ryanair spokesperson said: "We are overwhelmed by the support for our Protect Passengers: Keep EU Skies Open petition with over 600,000 signatures already from passengers calling on EU Commission President Ursula von der Leyen to take immediate action to protect their Freedom of Movement and overflights by keeping EU skies open during repeated French ATC strikes. We are rapidly approaching the 1 million signatures we need to force the EU Commission to take action to protect overflights and EU citizens’ Freedom of Movement.

French ATC strikes are the No.1 risk to EU citizens’ travel plans this Summer and passengers are really starting to understand that the EU Commission is doing nothing to mitigate that risk and protect their Freedom of Movement. EU citizens are now signing our petition to demand action from the EU Commission to protect them and their family’s travel plans this Summer. The EU’s Single Market for air travel should not be repeatedly disrupted by tiny French ATC unions because the EU Commission fails to take action. It’s time to protect overflights during French ATC strikes as Italy and Greece already do. If French ATC unions insist to strike (as is their right) then cancel French flights and protect overflights."

The next strike is on Monday,  a bank holiday in the UK and Ryanair has cancelled more than 200 flights. 

Canada Jetlines Signs Contract with Additional Canadian CFL team Hamilton Tiger-Cats

Canada Jetlines has done a deal to provide aircraft and crew to the Hamilton Tiger-Cats for their regular season games. The contract will see Canada Jetlines fly the team to select away games during the 2023 season. This represents the second such agreement with the first being the previously announced agreement with the Ottawa Redblacks.

“Canada Jetlines is very pleased to have been selected for this contract with the Hamilton Tiger-Cats, an iconic Canadian Sports Franchise with a rich history dating back to 1869. We are particularly excited about this relationship as we share some of the same qualities with the Hamilton Tiger-Cats such as teamwork, grit and passion. Canada Jetlines has seen continuous growth in demand for its Charter and ACMI (Aircraft Crew Maintenance and Insurance) business which complements our schedule service to leisure destinations,” said Canada Jetlines’ Chief Executive Officer and President, Eddy Doyle.

“We are thrilled to work with Canada Jetlines as the Tiger-Cats charter airline partner in 2023,” said Matt Afinec, President & COO, Hamilton Sports Group. “Reliability, convenience and comfort of our players is of the utmost importance and we’re excited to see this partnership in action throughout the upcoming season.”

Canada Jetlines has seemed to change its main type of business as it has been unable to make a profit on low-cost scheduled flying, the firm looks to be moving into the more charter and lease type of carrier.  Already this year it has completed approximately 150 charter and ACMI flights and expects to perform several additional charter flights in the coming months.

WestJet and Unifor reach tentative agreement for Toronto Pearson Airport staff....

WestJet and Unifor, the certified union representing WestJet airport employees at Toronto Pearson International Airport (YYZ), reached a tentative agreement on the first collective bargaining agreement between the organizations. Both parties now await the ratification vote to be put forward to membership.
"WestJet is pleased to have reached a tentative agreement that recognizes the important contributions of our valued airport employees at YYZ," said Diederik Pen, WestJet Executive Vice-President and Chief Operating Officer. "Our airport employees play an integral role in supporting our operations and this settlement reflects WestJet's commitment to supporting them as they continue to provide the friendly, reliable service our guests know and expect of the WestJet Group."

Blue marble sparkles: Airbus-built HOTBIRD 13G satellite provides colourful selfie

Eighth Airbus-built full-electric satellite joins twin in orbit for Eutelsat

The Airbus-built Eutelsat HOTBIRD 13G satellite has reached its geostationary orbit, 36,000 km above us. A month after its twin satellite HOTBIRD13F, it completed its electric orbit raising in five months and used cameras to do visual checks to complement the comprehensive testing at its orbital position. While its twin was equipped with a black and white camera, HOTBIRD 13G, the eighth Airbus-built full-electric satellite, has a full-colour device.

HOTBIRD13-G is equipped with a camera - this time in colour - at the tip of one of the robotic arms hosting the electric propulsion thrusters

Airbus Helicopters introduces first American-made military versions of the H125

MAG Aerospace to design and certify flexible weapons installation, allowing rapid reconfiguration

Airbus Helicopters is introducing the first U.S.-built H125 military configurations, known as AH-125 and MH-125 Ares, to the Airbus range of military helicopters. These combat-capable aircraft will feature militarized options that meet the needs of military and parapublic allies and partners around the world. 

The AH-125 Ares will be configured as the armed variant of the helicopter, while the MH-125 Ares will be configured as a multi-role helicopter capable of a wide range of operations. The new offerings complement the extensive line of military helicopters already produced by Airbus, including the H125M.

“The AH-125 and MH-125 Ares helicopters will offer the capability, reliability and flexibility needed by America’s allies and partners as they perform an array of rotary wing missions, ranging from light attack to disaster response and other parapublic missions,” said Scott Tumpak, Vice President of Military Line of Business for Airbus U.S. Space and Defense. “They represent the latest evolution of Airbus’ H125 family of helicopters, and will be produced in the U.S. at Airbus Helicopters, Inc.’s facility in Columbus, Mississippi.”

Globally, the H125 family accounts for almost 80% of the single-engine market and has the highest number of certified modifications (supplemental type certificates) available. With the new addition of a flexible weapons capability, the H125 helicopter will easily be re-configured between multiple mission sets in less than 30 minutes, ranging between light attack, air assault, search and rescue, casualty evacuation, and disaster response, as well as other combat and parapublic operations.

MAG Aerospace will perform the weapons installation design, engineering, certification and manufacturing. The helicopter will accommodate a wide range of weapons such as a .50 cal (12.7 mm) gun and unguided rockets, and precision-guided weapons as a growth option. The installation allows for doors-on flight throughout the mission.

“MAG Aerospace is thrilled to team with Airbus to combine our unique platform engineering and modification capabilities with the world-class leader in the single-engine helicopter market.  It’s an honor to work with Airbus and expand our ability to serve our partners in the U.S. and around the world,” said Matt Bartlett, President of MAG Aerospace.

The H125 is the world’s top-selling helicopter with a long history of use by U.S. law enforcement and government agencies. Currently, the H125 is the light enforcement helicopter used by U.S. Customs and Border Protection, with more than 100 H125 family aircraft in service, making the U.S. government the single largest customer and operator of the aircraft. 

Airbus provides a range of reliable and versatile helicopters to the U.S. government and military, enabling them to perform a wide variety of missions. More than 480 UH-72A and UH-72B Lakota helicopters have been delivered to the U.S. Army and National Guard since the program began in 2006. Airbus also continues to support the U.S. Coast Guard’s fleet of nearly 100 MH-65 helicopters, which play a critical role in the USCG’s homeland security, drug interdiction and lifesaving missions.

11th year in a row American Airlines wins at the Freddie Awards.....

For the 11th consecutive year, the American Airlines AAdvantage programme was recognized as the Best Elite Programme in the Americas during the 2023 Freddie Awards, held last evening at the Smithsonian’s National Air and Space Museum Steven F. Udvar-Hazy Center near Washington D.C.

“The Freddie Awards are one of the most prestigious awards in travel loyalty. To be recognized as the best of the best by our loyal AAdvantage members 11 times is special to us,” said Scott Chandler, American’s Vice President of Revenue Management and Loyalty. “Our team is dedicated to designing a program to help members achieve their travel goals and earn more rewards before and between status tiers. This vote of confidence from our members confirms we’re on the right path, and it will inspire us as we continue to advance the program.”

Since 1988, the Freddie Awards have recognized achievements in the travel loyalty industry in the Americas, Europe and Africa, the Middle East and Asia/Oceania. The awards, which honour both airline and hotel loyalty programs, are based entirely on votes from travellers around the world. Ballots are available in more than ten languages and this year more than 9 million votes were cast worldwide.

The AAdvantage program is free to join and gives members access to some of the best that American offers. Members can enjoy benefits like the ability to manage trips and credits with ease, earn miles towards reward travel and access to exclusive promotions.

Latest results from SkyWest

The U.S. regional airline SkyWest has just reported some impressive financial and operating results for the first quarter of 2023, including a net loss of $22 million compared to a net income of $18 million, for Q1 2022.

Commenting on the results, Chip Childs, Chief Executive Officer of SkyWest, said, “We are making solid headway in our production and performance objectives. We continue to experience exceptionally high demand for our products and appreciate the ongoing engagement from each of our partners. I also want to thank our people for their great work in delivering both an outstanding product and exceptional reliability through the challenging first quarter.”

During Q1 2023, SkyWest repurchased 5.1 million shares of common stock for $100 million, which represented 10% of SkyWest’s outstanding shares as of December 31, 2022. The shares were repurchased under SkyWest’s previously announced share repurchase program.

Additionally, during Q1 2023, SkyWest acquired 24 CRJ700 aircraft and eight CRJ200 aircraft under an early lease buyout for $125 million. Pursuant to this transaction, SkyWest avoids making future lease and lease return cash payments of approximately $90 million, and SkyWest now owns these aircraft and engines.

Financial Results

Embassy Suites by Hilton Panama City Beach Resort opens....

The St. Joe Company and Hilton announce the opening of the 255-suite Embassy Suites by Hilton Panama City Beach Resort. The resort is located in the popular Pier Park shopping and entertainment district with unobstructed views of the Gulf of Mexico available from each of its five floors.

The resort features a Gulf-view pool complex with a waterslide and hot tub, a business center, a fitness center and approximately 15,500 square feet of meeting and event space. Additionally, the resort is home to two restaurants, Blu Bar & Grill serving lunch and dinner with both indoor and outdoor seating, and Fin, which provides guests with complimentary hot breakfast. Vue 55, the fifth-floor, open-air event venue, is available for weddings and group functions and boasts sweeping views of the Gulf of Mexico and the Russell-Fields Pier.

Embassy Suites by Hilton Panama City Beach Resort’s 255 suites are a mix of one- and two-bedroom suites, including two-bedroom family suites and multi-room suites with bunkbeds. The resort’s Five Feet to Fitness™ suites enable guests to work out in the privacy of their suite with access to a variety of fitness equipment.

Airbus Helicopters hand over the first two H145 helicopters to Bavarian Police

Airbus has delivered the first two of eight five-bladed H145s to the Bavarian Police. These first two helicopters will be used in the training of pilots and crews which will begin shortly, ensuring a smooth transition from the current H135 fleet which has been in service for more than twelve years, to the larger H145 helicopters. Delivery of the first fully equipped police helicopter is scheduled for the middle of next year.

Training to begin on these two helicopters, allowing a seamless transition to the H145 fleet

First fully equipped helicopter to be delivered mid-2024

"We would like to thank Bavaria and its police force for their continued confidence in our helicopters," said Stefan Thomé, Managing Director of Airbus Helicopters in Germany. "We are proud to equip the Bavarian police with the most advanced helicopters available for law enforcement missions, supporting them in keeping our communities safe."

“Our police forces have to deal with a wide range of scenarios: searching for missing persons, transporting special units, fighting forest fires or dealing with natural disasters. The H145, with its outstanding performance and mission capabilities, will provide our police forces with an essential tool to fulfill these diverse missions,” said Franz Muschick, Head of the Bavarian Police Helicopter Squadron.

Bavaria's fully-equipped H145s will feature some of the most advanced police equipment available. This includes a state of the art computer system with tactical police mission software, easily operated by a foldable flat-screen mission command station for an operator in the cabin and a stowable monitor for the copilot. The crew will be aided by a modern lighting concept and leading-edge camera solutions, offering better situational awareness of the helicopter’s surroundings and events on the ground. The overall communication is facilitated due to customer-specific radio and data transfer means. A next-generation hoist and the capability to transport external loads as well as for allowing for firefighting, will further enhance police mission capabilities. Additional features, such as illuminated blade tips, improve the safety on board during essential police operations.

Airbus, Safran and Tikehau Capital finalise acquisition of Aubert & Duval

A holding company owned equally by Airbus, Safran and Tikehau Capital has finalised today the acquisition of Aubert & Duval from Eramet.

Aubert & Duval is a strategic supplier of critical parts and materials to high-precision customers, notably the aerospace, defence, nuclear and medical industries. The company generates annual revenues in the region of €550 million and employs 3,700 people, mostly in France. Its cutting-edge know-how in specialty steels and superalloys, and its more recently acquired expertise in titanium are crucial to the aerospace, transportation, energy, defence and medical markets.

Bruno Durand has been appointed CEO of Aubert & Duval by the holding company’s Board of Directors and will be managing its operations.

Safran CEO Olivier Andriès commented: “The acquisition of Aubert & Duval will ensure the national and European sovereignty of our strategic programs developing disruptive civil and military engines, and secure our critical parts and materials supply chain. I am confident the new team will carry through the transformation project to get this leading French industry player back on track.”

“Completion of this acquisition represents a crucial step towards the creation of a leading European player in critical parts and materials, equipped to compete globally and to support the aerospace and defence industry, thereby reducing geopolitical risks of supply", said Airbus CEO Guillaume Faury. "Airbus will provide its full support to Aubert & Duval as it executes its ambitious transformation plan."

Norwegian wins for its Reward loyalty programme....

Norwegian Reward wins international award for best loyalty programme

The people at European budget airline Norwegian are celebrating after its loyalty programme, Norwegian Reward, was named the best loyalty programme at the Freddie Awards. These awards are among the travel industry’s most internationally acclaimed accolades.  The company also received an award in the categories Best Promotion and Best Customer Service. 

Norwegian has won a Freddie Award in the categories Programme of the Year, Best Promotion and Best Customer Service. Norwegian was nominated in no less than six categories. The Freddie Awards are the largest annual global awards for loyalty programs within the travel industry. The ceremony was held in Washington D.C.

“Winning a Freddie Award truly is a great honour. This is a true recognition of our loyalty programme as the award is based entirely on members’ votes. We’ve been working hard to keep giving our loyal members better flights for less and we are particularly excited that this award coincides with the launch of our renewed Reward programme in May,” said May Haukedahl Wilson, VP Loyalty and Partnerships at Norwegian.

Bombardier reports first quarter 2023 revenues of $1.5 billion, up 17% year-over-year

Bombardier reported this week its financial results for the first quarter of 2023, reflecting continued progress on all business fundamentals and performance on track toward reaching 2023 full-year guidance.

“Bombardier has delivered a very strong first quarter,” said Éric Martel, President and Chief Executive Officer, of Bombardier. “Our robust performance adds to our extremely positive track record from the past two years and confirms we are on the right trajectory. With a very healthy, positive adjusted net income, further debt reduction, continued margin expansion, and ramped-up production to reach our guidance(1) of more than 138 deliveries this year, we are forging ahead towards the upgraded 2025 targets we presented during our Investor Day last month.”

Key highlights.....

Bombardier reports first quarter 2023 revenues of $1.5 billion, up 17% year-over-year, driven by improved delivery mix and continued strong aftermarket revenues of $424 million; aircraft deliveries on track towards full-year guidance(1) of greater than 138.

 

Adjusted EBITDA(2) rose to $212 million, up 27% year-over-year thanks to stronger aircraft margins and aftermarket growth, reported EBIT reached $140 million. Reported net income(4) and adjusted net income(2) surged to $302 million and $113 million respectively. First quarter 2023 adjusted Earnings per share (EPS)(3) turns positive at $1.06 and diluted EPS(4) of $2.98.

 

Free cash flow usage(2)(4) of $247 million driven by working capital build in inventories for 2023 deliveries and continued investments supporting completion of a new facility at Toronto Pearson International Airport. Available liquidity(2) stands strong at $1.4 billion at quarter end. Reported cash flow usage from operating activities(4) for the quarter was $162 million and net additions to PP&E and intangible assets(4) for the quarter were $85 million. Cash and cash equivalents as at March 31, 2023 were $1.1 billion.

 

First quarter of 2023 ended with stable backlog(5) at $14.8 billion, reflecting steady demand profile and unit book-to-bill(6) of 0.9.

 

First quarter 2023 marked by continued strong progress on debt reduction with a repayment of approximately $400 million from cash on balance sheet; market confidence with Moody’s Investors Service upgrade of Bombardier’s corporate family and Senior unsecured notes rating to B2; outlook maintained as stable.

Bombardier reported a strong start to 2023, with first-quarter revenues up 17% year-over-year at $1.5 billion, compared to $1.2 billion in the same quarter last year. The positive trend was reflected in profitability, with adjusted EBITDA(2) up 27%, driven by stronger aircraft margins, mainly on large-cabin aircraft, and aftermarket growth. Adjusted EBITDA margin(3) rose 120 basis points year-over-year to 14.6%. The adjusted EBIT(2) totalled $138 million in the first quarter of 2023, up 89% compared to the same quarter last year. The company also reported an adjusted net income(2) of $113 million, compared with a $69 million loss over the same period last year. First quarter of 2023 adjusted EPS(3) was $1.06 compared to a loss of $0.80 per share for the same quarter of 2022.

The positive trend in deliveries has continued in the first quarter of 2023, with deliveries (excluding Learjet, which is no longer in production) up 22% year-over-year. This is consistent with the company’s overall guidance(1) of increasing deliveries by more than 15% in 2023. The backlog(5) remained stable at $14.8 billion, while the unit book-to-bill(6) was at 0.9.

Airbus, Tarmac Aerosave and the City of Chengdu to establish the first aircraft lifecycle services centre in China

Airbus, Tarmac Aerosave and the City of Chengdu to establish the first aircraft lifecycle services centre in China

Facility to offer aircraft lifecycle solutions, dismantling and recycling.

Airbus, Tarmac Aerosave and the City of Chengdu have established a Joint Venture for the first aircraft “lifecycle” services centre in China. The new facility will cover a range of activities from aircraft parking and storage, to maintenance, upgrades, conversions, dismantling and recycling services for various aircraft types.

 

The announcement follows an initial Memorandum of Understanding (MoU) signed in January 2022. Entry into service of the new centre is scheduled around the turn of this year.

The facility will cover a surface area of 717,000 square metres and a storage capacity of 125 aircraft. It will be embedded in a complete ecosystem with an adjacent aviation industry park hosting aerospace manufacturing and services companies in Shuangliu District, Chengdu. It will be another key milestone of cooperation between Airbus and China, as it contributes to strengthening China's aviation industry in aftermarket services. With this aircraft lifecycle centre, Airbus’ footprint in China is expanded to cover the entire industrial chain, from parts manufacturing, aircraft assembly and delivery, fleet operation and to end-of-life services, such as dismantling and high-value parts re-cycling.

“This new centre in Chengdu fits perfectly into Airbus' approach to environmental responsibility across the entire aircraft lifecycle. Aircraft storage, upgrades and dismantling will all take place under one roof. We are very pleased to be working with our strong and experienced partners Tarmac Aerosave and the City of Chengdu  to develop the first lifecycle services centre of this kind in China and its range of services," says Cristina Aguilar, Airbus SVP Customer Services.

Tarmac Aerosave brings its more than 15 years of proven expertise in efficient aircraft dismantling to the project. Located in the same centre, Airbus subsidiary Satair will acquire ageing aircraft, trade and distribute the used parts to complete the full scope of lifecycle services. 75 percent of the aircraft stored in the centre will be transitioned into a second lifecycle. The remaining aircraft will be dismantled with the unique Tarmac Aerosave process, recovering around 90 percent of the aircraft weight, far exceeding industry standards.

Lufthansa Airbus A350 becomes climate research aircraft.....

In a globally unique project, the Lufthansa Group and the Karlsruhe Institute of Technology (KIT) are currently converting the Lufthansa Airbus A350-900 "Erfurt" (registration D-AIXJ) into a flying research laboratory. Now, an essential project milestone could be reached: For the first time, experts from the Lufthansa Group have attached the measuring probe system developed especially for the project to the lower fuselage of the A350 and successfully tested it in flight. Lufthansa pilots completed a flight program coordinated with the certification authorities in the airspace over southern Germany. The measuring system now being tested on the aircraft is the most complex of its kind and, in addition to the air inlet function, has sensors for high-frequency and -precision measurement of pressure and temperature. From 2024, the Airbus will collect comprehensive climate data during regular passenger flights for the European research infrastructure IAGOS-CARIBIC.

From 2024, a Lufthansa A350 will collect climate data for the first time for the European research infrastructure IAGOS-CARIBIC

"We want to make flying more sustainable. That is why we have been supporting climate research for decades. The conversion of our Lufthansa Airbus A350 into a climate research aircraft is a globally unique project in which colleagues from a wide variety of areas at Lufthansa have been working together with partners in science for years. Our aim is to make a valuable contribution to climate research. The data that our aircraft will collect worldwide in the future will help to improve today's atmospheric and climate models and thus their informative value for the future climate on earth," says Jens Ritter, CEO Lufthansa Airlines.

Over the next few months, a measurement laboratory weighing around two tons and specially developed for the project will be set up. Some 20 measuring instruments will be installed in the laboratory, which will later be loaded into the cargo hold as a cargo container and connected to the measuring system on the outer fuselage of the aircraft. Next year, this high-tech laboratory will take off for the first time and collect climate data on selected flights in Lufthansa's worldwide scheduled operations. The laboratory continuously records more than 100 different trace gases, aerosol, and cloud parameters from the ground to the tropopause region at an altitude of nine to thirteen kilometers. What makes it special: Climate-relevant parameters can be recorded at this altitude with significantly higher accuracy and temporal resolution on board the aircraft than would be possible with satellite- or ground-based measurement systems.