Sun Country Airlines chief executive Jude Bricker believes higher fares post-Covid are now embedded, even if domestic demand has fallen from the spike seen in 2022.
US carriers have in the second quarter reporting season detailed strong demand on longer-haul international routes now that markets have fully reopened post-Covid, with a reduction in the highs reported last summer for domestic flying.
Asked about the trend during a second-quarter results call on 4 August, Bricker said: “My view is that we observe something and then try to make up a reason why it exists.”
While noting transatlantic yields are much higher than they had been, Bricker says its ”a stretch” to say people are flying transatlantic who would otherwise have flown on domestic routes.
”I think more confidently we can say summer of ’22 was an outlier in demand recovery with a lot of recapture from the previous years,” he says.
Bricker though believes the airline’s markets are settling into a more consistent revenue environment where unit revenues are around 35%-45% above 2019 levels.
“That seems consistent going into all the bookings we’re seeing through the spring of next year,” he says. ”I think what gets me excited is just, it looks like fares have sort of permanently reset into a post-Covid environment, for our network anyway.”
Hybrid operator Sun Country – which operates scheduled low-cost, charter and cargo flights across North America and the Caribbean – recorded its highest second-quarter revenue of $261 million and carried a million scheduled passengers for the first time in a quarter. It posted a sharp jump in operating profit for the second quarter, from $3.4 million to $35.6 million.