Sun Country and Amazon: A New Chapter in Air Cargo

Sun Country Airlines, known for its hybrid low-cost model, is considering a new partnership with Amazon that could involve special charter flights for dedicated customers. This news came from Sun Country's CEO, Jude Bricker, during a call to discuss the company's financial results. Currently, Sun Country operates 12 Boeing 737-800 freighters daily within Amazon's domestic air network to support quick package delivery. Amazon recently introduced a for-profit line of business that sells extra cargo space on its aircraft to other businesses. One option for shippers is to rent an entire plane when it's not busy with Amazon's deliveries. Last week, freight forwarding giant Kuehne+Nagel announced using Amazon's air cargo service to transport e-commerce goods from China to the U. S. Most of Amazon's fleet consists of about 100 widebody Boeing 767 freighters, with six Airbus A330-300s that are slightly larger. Bricker's comments suggest that Amazon plans to use its narrowbody fleet for charter operations too. Sun Country's cargo business has been a reliable source of revenue growth and a buffer against passenger segment fluctuations. The airline projects cargo's share of total revenue to reach 20% by the second half of 2025. In the third quarter, cargo revenue grew 12% year-over-year to $29. 2 million, despite a decrease in flight hours due to aircraft maintenance and hurricanes.

Sun Country's cargo revenue per trip grew by 16% compared to the same period last year, with margins up 8%. This increase was thanks to a rate bump in their parcel transportation contract with Amazon and new contract rates that started in June. The airline has a six-year contract with Amazon until May 2026, renewable for another two to four years. Eight more leased aircraft will join Sun Country's fleet next year, growing the cargo fleet to 20 aircraft. These aircraft are being reassigned from all-cargo carrier Atlas Air. The first new aircraft is expected to start service in late March or early April, with all eight in operation by the end of the third quarter in 2025. Despite some challenges, Sun Country continues to make a profit, with net income falling 69% to $2. 3 million in the third quarter. The airline achieved record third-quarter revenue of $249 million, despite the impact of an IT outage and hurricanes. Passenger booking activity remains strong, and fares are rising as the domestic industry reduces capacity.

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