Amazon Air B737-800F

Amazon Air B737-800F

Amazon Air B737-800F

Sun Country Airlines has taken delivery of the first of eight more Boeing 737-800 freighters that it will operate on behalf of Amazon and expects its cargo revenue to double by this time next year as a result of the contract.

By summer this year it is expected that the airline will have taken delivery of all eight aircraft, said Sun Country Airlines chief executive Jude Bricker in the company’s fourth-quarter and full-year 2024 earnings call.

"This aircraft is yet to enter service. But by summer, we will have all eight aircraft growing the (Amazon) cargo fleet to 20,” commented Bricker.

Later in the call, president and chief financial officer Dave Davis added: "We expect them to start service in March, and then enter service throughout the year. They should all be in by late summer into the fourth quarter."

He confirmed that the first of the eight additional freighters for Amazon, which last year confirmed it had begun selling cargo capacity on its aircraft to third partiesis expected to enter service late in the first quarter.

Sun Country first started operating aircraft for Amazon in May 2020 after the two companies struck a 10-aircraft sublease deal, which was later extended by two more aircraft.

The deal for eight more 737-800Fs between the two airlines was announced in June last year.

Commenting on a question from an analyst querying whether UPS' plans to offload 50% of its business with Amazon could be an opportunity for Sun Country to take on more business with Amazon, Bricker and Davis agreed it was currently unlikely.

"Amazon operates 20 narrow-bodies and we're going to have them. So unless we sort of go to a different fleet type or they grow that narrow-body fleet, there's probably not a short-term opportunity to take advantage of what's going on at UPS," said Davis.

Bricker added: "The Amazon growth is coming faster than we can grow the operation and also keep the kind of performance that we expect. So we want to be able to absorb this growth, allocate more growth into our scheduled service, and then before we talk about cargo growth, if we could have it our way, that's how we do it. We pause on cargo growth after this 20-airplane expansion. And then for a couple of years, at least."

Speaking about the fourth quarter 2024 results for the period ended 31 December, Davis said that cargo revenue grew by 13.1% to $28.6m and that this was a record quarterly high.

"This growth came despite a 2.5% decrease in Cargo block hours," pointed out Davis. "Q4 Cargo revenue per block hour was up 16%, driven by the impact of a portion of the rate changes implicit in our extended Amazon agreement as well as annual rate adjustments."

Davies stated that the eight additional Amazon aircraft will drive most of Sun Country's cargo growth in 2025. He added: ”I expect cargo revenue will roughly double by this time next year.”