Facing a lack of passengers, Sun Country Airlines ramps up plan to fly packages for Amazon
- Apollo-owned Sun Country is planning to have the full fleet of 10 Boeing 737 freighters to fly packages for Amazon.
- The company had expected to have all of the Amazon-dedicated planes by the end of August but has moved that up to July.
- Sun Country, like other airlines, is facing a dearth of passengers. It is also shelving plans for an initial public offering.
As millions of would-be travelers stay home because of the coronavirus pandemic, one airline has found an eager customer: Amazon.
Sun Country Airlines, owned by an Apollo Global Management fund, struck a deal last December to start flying 10 Boeing 737 freighters for the online retailer. Minneapolis-based Sun Country plans to be flying all 10 of the cargo planes by the end of July, earlier than the previous target for summer's end, CEO Jude Bricker told CNBC on Wednesday.
Passenger demand is down 95% at Sun Country from what was expected just a few months ago, echoing similar declines throughout the U.S. air travel industry, so the additional cargo business is welcome. The operation will begin with its first plane on May 7.
While Sun Country's plans to fly dedicated planes for Amazon started last year, other airlines are now turning to air cargo as they face a dearth of passengers. American, Delta and United are among the large airlines that have flown pure-cargo flights, delivering everything from perishables to medical supplies.
Sun Country, whose low-cost passenger operation focuses on sun-seekers and other travelers visiting friends and relatives around the U.S., had already planned to shuffle pilots to cater to the new Amazon cargo flying this summer.
"We got a little bit lucky," Bricker said. "We were the main constraint in the ramping [up]. We were taking pilots off the passenger service and now that's not a concern."
Bricker said it was too early to tell whether the company will expand its partnership with Amazon. The online retailer didn't immediately respond to a request for comment.
The airline had been preparing for a potential initial public offering in the first half of 2020, but "clearly, given what's happened, that's on hold," said Dave Davis, Sun Country's president and CFO, adding that going public at all this year is unlikely.
An IPO isn't off the table entirely but it will depend on the overall economy and the market for airline stocks, Davis added.
Sun Country was approved for $60 million of $25 billion in federal grants earmarked for U.S. airlines to continue paying staff until Sept. 30.