Strategic Focus on Cargo Business Growth and Fleet Expansion
Sun Country aims to double its cargo revenue by 2026 with 20 cargo aircraft in service, contributing to an expected $1.5 billion revenue and $300 million EBITDA by 2027.
Cargo fleet growth is prioritized, with all 8 new aircraft delivered by Q3 2025, and full utilization expected by Q4 2025.
Cargo growth has temporarily pulled back scheduled passenger service, especially during peak summer months, impacting short-term margins but expected to improve as capacity is restored.
Impact of Tariffs and Trade Uncertainty on China Service Volumes
China service container volume decreased 14.6% YoY in Q2 2025 due to market uncertainty and trade volatility.
Freight demand was significantly affected by tariffs, with a rebound observed after the US-China tariff agreement in May.
Expectations for lower freight rates and volumes in China for the full year 2025, with a focus on supporting customer diversification and transshipment growth.
Strategic Fleet Expansion with Embraer and Major Airline Partners
SkyWest announced a multiyear agreement to purchase 16 new E175s for Delta, with deliveries starting in 2027.
Firm delivery positions secured for 44 additional E175s from 2028 to 2032, providing fleet flexibility.
Order structure allows deferral or cancellation, with nearly 300 E175s expected by 2028, solidifying SkyWest's position as the largest Embraer operator.
Long-term fleet plan emphasizes refleeting and fleet flexibility to adapt to market and tariff challenges.
Strong Performance and Strategic Focus on Heavy Haul Segment
Generated approximately $138 million in heavy haul revenue in Q2 2025, a 9% increase year-over-year.
Heavy haul volume increased by 4%, and revenue per load increased by 5%.
Heavy haul's share of load revenue increased from 33% in Q2 2024 to 35% in Q2 2025.
Management emphasized the segment's domestic focus and resilience, with no tariff-related headwinds expected in the near term.
Jim Applegate highlighted the broad-based demand across industries like machinery, electrical equipment, and data centers, supporting continued growth.
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