Leisure carrier Sun Country Airlines will fly up to eight additional Boeing 737-800 converted freighters for Amazon under a contract extension announced Thursday.
Minneapolis-based Sun Country (NASDAQ: SNCY) has operated a dozen Amazon-supplied Boeing narrowbody cargo jets since 2020. It said its contract for providing crews, maintenance and insurance has been extended until 2030 and that it will begin operating the initial aircraft in the first quarter of 2025.
All eight aircraft are expected to be operational in Amazon’s domestic parcel network by the third quarter of 2025, increasing Sun Country’s freighter fleet to 20 aircraft. In addition to providing the aircraft, Amazon pays for many flight expenses, including fuel and is responsible for loading and unloading.
Amazon (NASDAQ: AMZN) is reallocating the eight 737-800 freighters after agreeing last month to terminate its transport partnership with Atlas Air, which also lost flying business from 10 Boeing 767-300 freighters Amazon is transferring to ABX Air.
Amazon directly controls the eight 737-800s, which are leased from AerCap.
“Amazon is an extremely important customer to Sun Country and strong execution on our current cargo services positioned us well to grow our business. We look forward to continuing to provide services to Amazon into the 2030s,” said Sun Country CEO Jude Bricker in the announcement.
Sun Country’s cargo revenue in 2023 increased 10.4% year over year to $100 million even though the rest of the air cargo industry, including express air carriers, experienced downturns in aircraft utilization and revenue. The airline benefitted from Amazon gaining share in a declining domestic parcel market, where it overtook FedEx and UPS last year in total deliveries. First quarter cargo revenue at Sun Country increased 2.5%, to $24 million, from the same period a year ago.
Sun Country, which entered the cargo space to diversify revenue in a highly competitive passenger market, and Amazon have the right to extend the amended contract through 2037. Sun Country’s stock price jumped 10% to $11.32 per share in early trading on Thursday.
Amazon relies on partner carriers to operate its network because it isn’t a pure airline with its own operating authority. Amazon’s active fleet has plateaued in the past 20 months at about 80 aircraft, according to various aircraft databases. During the peak of pandemic home shopping the fleet reached 88 aircraft.
Atlas Air Worldwide’s leasing division, Titan Aviation, continues to lease to Amazon the 16 Boeing 767-300s being placed with ABX Air.
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