Sun Country Airlines Holdings, Inc.

Welcome to the Sun Country Airlines first quarter 2021 earnings call. My name is Vanessa, and I will be your operator for today's call. At this time, all participants are in a listen-only mode. Later, we will conduct a question and answer session. During the question and answer session, if you have a question, please press star then 1 on your touchtone phone. Please note that this conference is being recorded. I will now turn the call over to Mr. Chris Allen, Director of Investor Relations. Mr. Allen, you may begin.

Thank you, and good morning, everyone. We issued our first quarter earnings press release last night to the Investor Relations portion of our website at ir.suncountry.com. Our first quarter 10Q is also expected to be filed tonight after the close. On the call with me, I'm joined today by Jude Bricker, our Chief Executive Officer, Dave Davis, President and Chief Financial Officer, and a host of others to help answer questions. Before we begin, I would like to remind everyone that during this call, the company may make certain statements that constitute forward-looking statements. Our remarks today may include forward-looking statements which are based upon management's current beliefs, expectations, and assumptions and are subject to risk and uncertainty. Actual results may differ materially. We encourage you to review the risk factors and the cautionary statements outlined in our earnings release and our most recent SEC filing. We assume no obligation to update any forward-looking statements. With that said, I would now like to turn the call over to Jude.

Thanks, Chris. Good morning, everyone. Welcome to Sun Country's first quarterly earnings call as a public company following the successful completion of our initial public offering in March. It's great to have all our new shareholders on board. I'll start with some brief commentary about our operational performance and then provide some color about the demand environment. During the first quarter, we had a perfect controllable completion factor. In fact, we had over 250 consecutive days without a controllable cancellation. This was done while also delivering first quarter on time of 85% and industry-leading baggage performance. It's been a really tough year for our people, and I'm so proud to have been a part of this team that delivered these impressive results through such adversity. Thank you to all our employees. I'm also proud of our financial results for the first quarter as we delivered positive operating margin, even adjusting out special items, which includes the Benefit of CARES grant. While we remain in an unpredictable demand environment, I'm encouraged by recent improvements that we're seeing in forward bookings. Demand really picked up around mid-February, and that momentum continues today. So first, for our scheduled service business, here are a few data points that give me confidence in a continued recovery. As of today, our summer schedule is sold to a higher load factor as compared to the same time in 2019. Also, we all know fares have been depressed throughout the pandemic. However, beginning in mid-March, our sole fares for summer travel have been in line with the same period in 2019, while ancillary unit revenues continue to trend well ahead. Our summer network is much more focused on VFR traffic than is our winter schedule, which tends to focus on vacationers. For the first time in the pandemic, we're starting to see VFR traffic returning. I think this is the progression of the recovery, which began with vacationers primarily to domestic Sunbelt destinations. A willingness to visit friends and relatives demonstrates increased comfort with the COVID situation. Our no-show rates have returned to pre-COVID levels, again demonstrating a traveler confidence. In March and April, our credit card sign-ups and credit card spend exceeded pre-COVID comps. This indicates consumer desire for future air travel with us. Finally, we're seeing substantial booking demand for far future itineraries. During the pandemic, we experienced extremely compressed booking curves, understandably. Recently, however, we've been taking substantial bookings throughout our selling schedule, including into the first quarter of 2022. Based on these inputs, we're planning a continued recovery of scheduled service through the end of the year. Separately, our charter business continues to improve. We focus on three broad charter areas, starting with our track programs, which consist of three dedicated aircraft. Two of our aircraft in track programs are up and running, with the third scheduled to restart in the third quarter. Next, our sports programs, which have recently produced pre-COVID volumes as March Madness has returned, and our Major League Soccer program picked up in April. And finally, our military flying, which is yet to recover. However, military tends to peak during summer months. Lastly, our cargo business continues to perform well. First quarter 2021 marks the first quarter where we flew a full cargo schedule with all 12 committed aircraft. The program only began in May of last year, and it's a testament to our operations professionals that we're able to stand up that program so rapidly in the middle of a pandemic. We expect stable volumes from our cargo business going forward. While we're obviously not through with the pandemic, our financial performance and balance sheet allow us to now focus on making smart investments in our future. Broadly, that means taking advantage of the used aircraft market, finding network growth opportunities, and making the appropriate investments so that we can continue our operating performance as we grow into the recovery. Along those lines, there are a few highlights from the first quarter. We went public and paid back our government loan. We've committed to the purchase of three growth aircraft through a finance lease structure. We announced two separate major network expansions, a summer 21 expansion focused on Minneapolis VFR markets like Indianapolis and Houston, plus more Cancun service out of summer peak origination markets like San Antonio. Then last month, we announced a major expansion for our winter 21-22 schedule, which was focused on expanding our footprint for leisure travelers across the Upper Midwest, highlighted by our launch of service from Milwaukee, Green Bay, Duluth, and Rochester, Minnesota, and also new Minneapolis service to destinations like Grand Cayman and Turks, plus an expansion of our popular bus connecting service branded as Landline to smaller cities across Minnesota. I'll now turn the call over to Dave who will discuss our financial results and outlook.