Sun Country Airlines lowered its expected earnings from the first quarter on Tuesday as consumers are cutting travel budgets.
Sun Country follows other airlines in lowering forecast as consumer budgets tighten
The budget carrier adjusted expected revenue for the first leg of 2025 amid broader concern about consumer confidence and the appetite for discretionary spending.
The Minnesota Star Tribune
March 11, 2025 at 4:05PM
The high end of Sun Country’s total revenue outlook for the first part of the year has decreased to $330 million, from $340 million, the company reported in a public filing Monday. The Minneapolis-based airline also predicts fewer total hours flying this season and running along the lower end of its range for expected operating margin in the first quarter of 2025.
Sun Country spokeswoman Wendy Burt called the company’s revision to revenue guidance modest in a statement Tuesday. She attributed weaker-than-expected February results to competitive and operational factors, saying the company sees a stronger March and April ahead.
Chief Financial Officer Dave Davis was to deliver a presentation highlighting areas of Sun Country’s performance during the J.P. Morgan Industrials Conference on Tuesday afternoon.
Shares of Sun Country on the NASDAQ-GS exchange have dropped 11% in the past five trading days.
The outlook changes come as other airlines are making some operational changes and tempering revenue expectations during the first leg of 2025.
On Monday, Atlanta-based Delta Air Lines halved its earnings outlook for the first quarter of 2025. The airline expects first-quarter revenue to increase between 3% and 4% compared with the same time in 2024. That comes after the company predicted in January that revenue would grow between 7% and 9% this year.
CEO Ed Bastian said during an appearance on CNBC’s “Closing Bell Overtime” on Monday the first quarter is always the seasonally “most difficult of the year for our industry.” Delta entered the year with high growth expectations, he said, but quickly noticed the downturns in mostly domestic corporate and consumer spending.
Exacerbating the economic conditions were perceptions about air travel safety, Bastian said, following the American Airlines disaster in Washington, D.C., that left 67 dead, and Delta’s nonfatal crash in which the plane ended up upside down on the tarmac in Toronto last month.
“Consumers in a discretionary business do not like uncertainty,” Bastian said. “And while we do believe this will be a period of time that we pass through, it is also something that we need to understand and get to calmer waters.”
Meanwhile, Southwest Airlines scaled back its popular free checked bag policy on Tuesday. Beginning in May, the carrier will charge regular customers for that service and offer free options for select air travelers. Southwest also lowered its points earning program for those using its budget options.
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