Sun Country Airlines Holdings, Inc.

Welcome to the Sun Country or Alliance first quarter 2022 earnings call. My name is Cherry and I will be your operator for today's call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during the session, you will need to press star 1 on your telephone. Please be advised that today's conference call is being recorded. If you require any further assistance, please press star 0. I will now turn the call over to Chris Allen, Director of Investor Relations. Mr. Allen, you may begin.

Thank you. I'm joined today by Jude Bricker, our Chief Executive Officer, Dave Davis, President and Chief Financial Officer, and a ton of the group of others to help answer questions. Before we begin, I'd 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 that are based on 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 cautionary statements outlined in our earnings release and our most recent SEC filings. We assume no obligation to update any forelooking statements. You can find our first quarter earnings press release on the investor relations portion of our website at ir.suncountry.com. With that said, I'd like to turn the call over to Jude.

Thanks, Chris. Good morning, everyone. After nearly two years since the onset of the COVID pandemic, demand for air travel in the first quarter returned to pre-pandemic levels. While it's been a long and challenging time for our industry and its employees, the last two years have shown the resiliency of Sun Country and what makes us truly unique. We believe we have the best people in the industry, and I'm proud of them on a daily basis serving our growing leisure, charter, and cargo customer base. While the industry now faces a certain challenge, I want to take a few minutes to highlight some differences here at Sun Country versus the broader industries. First, we're already profitable. We were profitable in the first quarter. We've been profitable through most of the pandemic. Although we're tremendously excited about our growth prospects, we're not reliant on growth to deliver consistent profitability and cash flow. Second, our charter and cargo segments produce strong results and predictable cash flow in all demand and fuel environments. These businesses are primarily under long-term contracts with premier partners such as Major League Soccer, Caesars, and Amazon. We pass through fuel costs. to the consumer. Third, and importantly, the synergies between our cargo, charter, and scheduled service segments have never been more apparent as they are today. Because of the consistency of charter and cargo, we have the flexibility to adjust our scheduled service operations to deliver in all circumstances. So in the second quarter, in response to the fuel environment, We've been able to focus our growth on peak periods where fares can be achieved that compensate us for our fuel costs. And because of that peak focus, we expect to be able to deliver much stronger schedule of service unit revenue growth in 2Q versus the industry. While it's great the industry is seeing a resurgence in demand, our improved unit revenue will be as much a result of our own doing and design. Fourth, we deleveraged through the pandemic. Our future CapEx can be adjusted for aircraft prices, interest rates, and the opportunity to deploy the asset. The pandemic produced many opportunities for us to purchase growth aircraft at attractive prices. Today, we have seven aircraft that have been purchased and financed that will enter the fleet over the next nine months. In the first quarter, we grew block hours by 30% versus the same quarter in 2019. Through this time next year, we expect to continue to deliver over 20% growth without future CapEx while deleveraging as our debt amortizes and producing positive cash flow, adding to our already strong liquidity position. Finally, as you all know, we ratified a contract with our pilot group in December. This has allowed us to attract the quality and quantity of talented aviators needed to support our growth. But it also gives us more certainty in our costs as compared to having an open contract in this environment. Again, I'm so proud of all our team members here in Sun Country and what we've achieved to date and excited about the future. With that, I'll turn it over to Dave.