0001558370-21-013932 | 10-Q | XBRL Viewer | SUN Country Airlines Holdings INC

Document and Entity Information	9 Months Ended
Document and Entity Information	Sep. 30, 2021 shares
Document and Entity Information [Abstract]
Document Type	10-Q
Document Quarterly Report	true
Document Transition Report	false
Document Period End Date	Sep. 30, 2021
Entity File Number	001-40217
Entity Registrant Name	Sun Country Airlines Holdings, Inc.
Entity Incorporation, State or Country Code	DE
Entity Tax Identification Number	82-4092570
Entity Address, Address Line One	2005 Cargo Road
Entity Address, City or Town	Minneapolis
Entity Address State Or Province	MN
Entity Address, Postal Zip Code	55450
City Area Code	651
Local Phone Number	681-3900
Title of 12(b) Security	Common Stock, par value $0.01 per share
Trading Symbol	SNCY
Security Exchange Name	NASDAQ
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Non-accelerated Filer
Entity Small Business	false
Entity Emerging Growth Company	true
Entity Ex Transition Period	false
Entity Shell Company	false
Entity Common Stock, Shares Outstanding	57,551,741
Entity Central Index Key	0001743907
Current Fiscal Year End Date	--12-31
Document Fiscal Year Focus	2021
Document Fiscal Period Focus	Q3
Amendment Flag	false

CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands	Sep. 30, 2021	Dec. 31, 2020
Current Assets:
Cash and Cash Equivalents	$ 275,332	$ 62,028
Restricted Cash	15,693	8,335
Investments	5,997	5,624
Accounts Receivable, net of an allowance for credit losses of $232 and $224, respectively	31,221	28,690
Short-term Lessor Maintenance Deposits		3,101
Inventory, net of a reserve for obsolescence of $1,257 and $996, respectively	5,496	5,407
Prepaid Expenses	11,155	8,002
Derivative Assets	248
Other Current Assets	1,299	5,553
Total Current Assets	346,441	126,740
Property & Equipment, net:
Property & Equipment	662,385	479,580
Accumulated Depreciation & Amortization	(101,356)	(65,065)
Total Property & Equipment, net	561,029	414,515
Other Assets:
Goodwill	222,223	222,223
Other Intangible Assets, net	90,110	93,110
Operating Lease Right-of-use Assets	65,215	121,269
Aircraft Deposits	9,092	10,253
Long-term Lessor Maintenance Deposits	23,226	22,584
Deferred Tax Asset	19,149	36,216
Other Assets	5,828	6,357
Total Other Assets	434,843	512,012
Total Assets	1,342,313	1,053,267
Current Liabilities:
Accounts Payable	35,676	34,035
Accrued Salaries, Wages, and Benefits	21,718	16,368
Accrued Transportation Taxes	8,882	5,883
Air Traffic Liabilities	105,048	101,075
Derivative Liabilities		1,174
Over-market Liabilities	4,309	9,281
Finance Lease Obligations	9,740	11,460
Loyalty Program Liabilities	10,175	7,016
Operating Lease Obligations	17,353	34,492
Current Maturities of Long-term Debt	19,835	26,118
Other Current Liabilities	8,884	6,841
Total Current Liabilities	241,620	253,743
Long-term Liabilities:
Over-market Liabilities	11,505	28,128
Finance Lease Obligations	164,902	95,710
Loyalty Program Liabilities	10,136	15,053
Operating Lease Obligations	63,139	112,707
Long-term Debt	266,985	256,345
Income Tax Receivable Agreement Liability	95,400
Other Long-term Liabilities	5,746	7,764
Total Long-term Liabilities	617,813	515,707
Total Liabilities	859,433	769,450
Commitments and Contingencies
Stockholders' Equity:
Common stock with $0.01 par value, 995,000,000 shares authorized, 57,551,741 and 46,839,659 issued and outstanding at September 30, 2021 and December 31, 2020, respectively.	576	468
Preferred stock with $0.01 par value, 5,000,000 shares authorized, no shares issued and outstanding at September 30, 2021 and December 31, 2020.
Loans to Stockholders		(3,500)
Additional Paid In Capital	481,108	248,525
Retained Earnings	1,196	38,324
Total Stockholders' Equity	482,880	283,817
Total Liabilities and Stockholders' Equity	1,342,313	1,053,267
Aircraft and Flight Equipment
Property & Equipment, net:
Property & Equipment	435,901	331,685
Leasehold Improvements and Ground Equipment
Property & Equipment, net:
Property & Equipment	19,005	13,526
Computer Hardware and Software
Property & Equipment, net:
Property & Equipment	8,459	7,845
Finance Lease Assets
Property & Equipment, net:
Property & Equipment	189,689	117,833
Rotable Parts
Property & Equipment, net:
Property & Equipment	$ 9,331	$ 8,691

CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands	Sep. 30, 2021	Dec. 31, 2020
CONDENSED CONSOLIDATED BALANCE SHEETS
Accounts Receivable, allowance for credit losses	$ 232	$ 224
Inventory, reserve for obsolescence	$ 1,257	$ 996
Common stock-par value (in dollars per share)	$ 0.01	$ 0.01
Common stock-shares authorized	995,000,000	995,000,000
Common stock-shares issued	57,551,741	46,839,659
Common stock-shares outstanding	57,551,741	46,839,659
Preferred stock-par value (in dollars per share)	$ 0.01	$ 0.01
Preferred stock-shares authorized	5,000,000	5,000,000
Preferred stock-shares issued	0	0
Preferred stock-shares outstanding	0	0

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2021	Sep. 30, 2020	Sep. 30, 2021	Sep. 30, 2020
Operating Revenues:
Operating Revenues	$ 173,663	$ 77,973	$ 450,464	$ 293,679
Operating Expenses:
Aircraft Fuel	36,647	13,139	90,631	69,377
Salaries, Wages, and Benefits	43,424	36,348	129,815	106,923
Aircraft Rent	3,925	6,410	13,339	23,376
Maintenance	9,660	6,338	30,170	15,242
Sales and Marketing	5,470	2,921	16,402	13,123
Depreciation and Amortization	14,029	12,929	40,103	35,631
Ground Handling	7,873	4,880	19,654	15,786
Landing Fees and Airport Rent	12,069	8,596	29,606	22,377
Special Items, net	(65)	(32,852)	(65,456)	(64,333)
Other Operating, net	18,629	10,447	50,026	34,363
Total Operating Expenses	151,661	69,156	354,290	271,865
Operating Income	22,002	8,817	96,174	21,814
Non-operating Income (Expense):
Interest Income	28	26	52	340
Interest Expense	(6,286)	(5,157)	(19,487)	(16,215)
Other, net	456	164	18,505	(331)
Total Non-operating Income (Expense), net	(5,802)	(4,967)	(930)	(16,206)
Income before Income Tax	16,200	3,850	95,244	5,608
Income Tax Expense	2,297	923	17,172	1,470
Net Income	$ 13,903	$ 2,927	$ 78,072	$ 4,138
Net Income per share to common stockholders:
Basic	$ 0.24	$ 0.06	$ 1.44	$ 0.09
Diluted	$ 0.23	$ 0.06	$ 1.33	$ 0.09
Shares used for computation:
Basic	57,355,104	46,805,950	54,368,231	46,805,950
Diluted	61,712,378	48,350,943	58,699,991	48,350,943
Passenger
Operating Revenues:
Operating Revenues	$ 147,718	$ 62,472	$ 377,042	$ 272,299
Cargo
Operating Revenues:
Operating Revenues	24,400	14,272	68,084	17,491
Other
Operating Revenues:
Operating Revenues	$ 1,545	$ 1,229	$ 5,338	$ 3,889

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY - USD ($) $ in Thousands	Warrants	Common Stock	Loans to Stockholders	APIC	Retained Earnings (Deficit)	Total
Balances, at Beginning of period at Dec. 31, 2019		$ 68	$ (3,500)	$ 244,928	$ 42,228	$ 283,724
Balances, at Beginning of period (in shares) at Dec. 31, 2019	40,005,885	6,800,065
Stockholder's Equity
Exercise of Apollo Warrants		$ 400		(379)		21
Exercise of Apollo Warrants (in shares)	(40,005,885)	40,005,885
Net Income					7,251	7,251
Stock-based Compensation				369		369
Balances, at End of period at Mar. 31, 2020		$ 468	(3,500)	244,918	49,479	291,365
Balances, at End of period (in shares) at Mar. 31, 2020		46,805,950
Balances, at Beginning of period at Dec. 31, 2019		$ 68	(3,500)	244,928	42,228	283,724
Balances, at Beginning of period (in shares) at Dec. 31, 2019	40,005,885	6,800,065
Stockholder's Equity
Net Income						4,138
Balances, at End of period at Sep. 30, 2020		$ 468	(3,500)	246,735	46,366	290,069
Balances, at End of period (in shares) at Sep. 30, 2020		46,805,950
Balances, at Beginning of period at Mar. 31, 2020		$ 468	(3,500)	244,918	49,479	291,365
Balances, at Beginning of period (in shares) at Mar. 31, 2020		46,805,950
Stockholder's Equity
Net Income					(6,040)	(6,040)
Stock-based Compensation				388		388
Balances, at End of period at Jun. 30, 2020		$ 468	(3,500)	245,306	43,439	285,713
Balances, at End of period (in shares) at Jun. 30, 2020		46,805,950
Stockholder's Equity
Net Income					2,927	2,927
Amazon Warrants				933		933
Stock-based Compensation				496		496
Balances, at End of period at Sep. 30, 2020		$ 468	(3,500)	246,735	46,366	290,069
Balances, at End of period (in shares) at Sep. 30, 2020		46,805,950
Balances, at Beginning of period at Dec. 31, 2020		$ 468	(3,500)	248,525	38,324	283,817
Balances, at Beginning of period (in shares) at Dec. 31, 2020		46,839,659
Stockholder's Equity
Shares Surrendered by Stockholders		$ (1)	3,500	(3,499)
Shares Surrendered by Stockholders (in shares)		(140,737)
Initial Public Offering Expense Adjustment		$ 105		224,552		224,657
Initial Public Offering Expense Adjustment (in shares)		10,454,545
Net Income					12,416	12,416
Income Tax Receivable Agreement					(115,200)	(115,200)
Amazon Warrants				1,400		1,400
Stock-based Compensation				2,870		2,870
Balances, at End of period at Mar. 31, 2021		$ 572		473,848	(64,460)	409,960
Balances, at End of period (in shares) at Mar. 31, 2021		57,153,467
Balances, at Beginning of period at Dec. 31, 2020		$ 468	$ (3,500)	248,525	38,324	283,817
Balances, at Beginning of period (in shares) at Dec. 31, 2020		46,839,659
Stockholder's Equity
Net Income						78,072
Balances, at End of period at Sep. 30, 2021		$ 576		481,108	1,196	482,880
Balances, at End of period (in shares) at Sep. 30, 2021		57,551,741
Balances, at Beginning of period at Mar. 31, 2021		$ 572		473,848	(64,460)	409,960
Balances, at Beginning of period (in shares) at Mar. 31, 2021		57,153,467
Stockholder's Equity
Initial Public Offering Expense Adjustment				349		349
Exercise of Stock Options				27		27
Exercise of Stock Options (in shares)		5,000
Net Income					51,753	51,753
Amazon Warrants				1,400		1,400
Stock-based Compensation				744		744
Balances, at End of period at Jun. 30, 2021		$ 572		476,368	(12,707)	464,233
Balances, at End of period (in shares) at Jun. 30, 2021		57,158,467
Stockholder's Equity
Exercise of Stock Options		$ 4		2,376		2,380
Exercise of Stock Options (in shares)		393,274
Net Income					13,903	13,903
Amazon Warrants				1,400		1,400
Stock-based Compensation				964		964
Balances, at End of period at Sep. 30, 2021		$ 576		$ 481,108	$ 1,196	$ 482,880
Balances, at End of period (in shares) at Sep. 30, 2021		57,551,741

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2021	Sep. 30, 2020
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
Net Income	$ 78,072	$ 4,138
Adjustments to reconcile Net Income to Cash from Operating Activities:
Depreciation and Amortization	40,103	35,631
Tax Receivable Agreement Adjustment	(19,800)
Reduction in Operating Lease Right-of-use Assets	12,920	19,685
Non-Cash (Gain) Loss on Asset Transactions, net	(12,666)	381
Unrealized (Gain) Loss on Fuel Derivatives	(3,527)	15,766
Amortization of Over-market Liabilities	(4,159)	(8,101)
Deferred Income Taxes	17,068	1,493
Amazon Warrants Vested	4,200	933
Stock-based Compensation Expense	4,577	1,253
Amortization of Debt Issuance Costs	2,187	1,625
Changes in Operating Assets and Liabilities:
Accounts Receivable	34	(3,141)
Inventory	(456)	(696)
Prepaid Expenses	(3,153)	(409)
Lessor Maintenance Deposits	(5,464)	(8,293)
Aircraft Lease Deposits	1,162	1,290
Other Assets	2,297	(4,396)
Accounts Payable	2,257	(9,092)
Accrued Transportation Taxes	2,999	(10,527)
Air Traffic Liabilities	3,972	(18,262)
Loyalty Program Liabilities	(1,759)	(769)
Reduction in Operating Lease Obligations	(19,983)	(19,078)
Other Liabilities	8,514	4,122
Net Cash Provided by Operating Activities	109,395	3,553
Cash Flows from Investing Activities:
Purchases of Property & Equipment	(111,053)	(94,307)
Purchase of Investments	(1,436)	(427)
Proceeds from the Sale of Investments	1,062	523
Net Cash Used in Investing Activities	(111,427)	(94,211)
Cash Flows from Financing Activities:
Cash Received from Stock Offering	235,894
Costs of Stock Offering	(8,706)
Proceeds from Stock Option and Warrant Exercises	2,407	21
Proceeds from Borrowings	80,500	220,307
Repayment of Finance Lease Obligations	(9,113)	(84,742)
Repayment of Borrowings	(75,728)	(55,594)
Debt Issuance Costs	(2,560)	(3,279)
Net Cash Provided by Financing Activities	222,694	76,713
Net Increase (Decrease) in Cash, Cash Equivalents and Restricted Cash	220,662	(13,945)
Cash, Cash Equivalents and Restricted Cash-Beginning of the Period	70,363	64,478
Cash, Cash Equivalents and Restricted Cash-End of the Period	291,025	50,533
Supplemental information:
Cash Payments for Interest	14,521	12,027
Cash Payments for Income Taxes, net	144	34
Lease Deposits Applied Against the Purchase of Aircraft	3,296
Aircraft and Flight Equipment Acquired through Finance Leases	$ 71,856
Purchases of Property & Equipment in Accounts Payable		$ 648

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Parentheticals) - USD ($) $ in Thousands	Sep. 30, 2021	Sep. 30, 2020
Reconciliation of Cash, Cash Equivalents and Restricted Cash
Cash and Cash Equivalents	$ 275,332	$ 44,288
Restricted Cash	15,693	6,245
Total Cash, Cash Equivalents and Restricted Cash	$ 291,025	$ 50,533

COMPANY BACKGROUND

9 Months Ended

Sep. 30, 2021

COMPANY BACKGROUND

COMPANY BACKGROUND

1.	COMPANY BACKGROUND

Sun Country Airlines Holdings, Inc. is the parent company of Sun Country, Inc., which is a certificated air carrier providing scheduled passenger service, air cargo service, charter air transportation and related services. Services are provided to the general public, cargo customers, military branches, wholesale tour operators, individual entities, schools and companies for air transportation to various U.S. and international destinations. Except as otherwise stated, the financial information, accounting policies, and activities of Sun Country Airlines Holdings, Inc. are referred to as those of the Company (the “Company” or “Sun Country”).

Stock Split

In March 2021, the Company effected an approximately 18.8886 for 1 stock split of its common stock (the “Stock Split”), with exercise prices for outstanding warrants and options adjusted accordingly by dividing such prices by the Stock Split ratio. The par value of the common stock was not adjusted as a result of the Stock Split. As a result of the Stock Split, the Company issued an additional 44,226,587 shares of common stock. All references to common stock, warrants to purchase common stock, stock options, per share amounts and related information contained in the accompanying Condensed Consolidated Financial Statements and applicable disclosures have been retroactively adjusted to reflect the effect of the Stock Split for all periods.

Approval of the Omnibus Incentive Plan

In March 2021, the stockholders approved the Sun Country Airlines Holdings, Inc. 2021 Omnibus Incentive Plan (the “Plan”). The Plan authorizes that no more than 3,600,000 shares of Common Stock may be delivered in the aggregate pursuant to Awards granted under the Plan. An “Award” means any Incentive Stock Option, Nonqualified Stock Option, Stock Appreciation Right, Restricted Stock, Restricted Stock Unit, Other Stock-Based Award, or Other Cash-Based Award granted under the Plan.

Upon implementation of this new Plan, there were no more grants under the October 2018 equity incentive plan. Awards already issued under the 2018 plan are not impacted by the new Plan.

Initial Public Offering of Common Stock and Other Stock Sales

On March 16, 2021, the Company priced its initial public offering of 9,090,909 shares of common stock to the public at $24.00 per share. The stock began trading on the NASDAQ on March 17, 2021 under the symbol SNCY. The underwriters had an option to purchase an additional 1,363,636 shares from the Company at the public offering price, which they exercised. In total, all 10,454,545 shares were issued on March 19, 2021 and the net proceeds to the Company were $225,006 after deducting underwriting discounts and commissions, and other offering expenses.

Concurrently with the closing of the initial public offering, SCA Horus Holdings, LLC, an affiliate of investment funds managed by affiliates of Apollo Global Management (the “Apollo Stockholder”), also completed a concurrent private placement in which the Apollo Stockholder sold 2,216,312 and 2,216,308 shares of common stock to PAR Investment Partners, L.P. and certain funds or accounts managed by an investment adviser subsidiary of Blackrock, Inc., respectively. Each of the two sales was based on an

aggregate purchase price of $50,000 and a price per share equal to 94% of the initial public offering price of $24.00 per share.

In May 2021, the Apollo Stockholder sold 7,250,000 shares of the Company’s common stock at a public offering price of $34.50 per share. The underwriters in this offering exercised their option to purchase an additional 1,087,500 shares at the public offering price, bringing the total offering to 8,337,500 shares. The Company incurred offering expenses of $640 and did not receive any of the proceeds from the offering. All proceeds went to the Apollo Stockholder.

In October 2021, the Apollo Stockholder and Jude Bricker, the Company’s Chief Executive Officer (together, the “Selling Stockholders”), sold a total of 8,500,000 shares of the Company’s common stock at a public offering price of $32.50 per share. In addition, the Selling Stockholders and another existing stockholder of the Company granted the underwriters a 30-day option to purchase up to 1,275,000 additional shares of the Company’s common stock at the public offering price, less underwriting discounts and commissions. The Company incurred offering expenses of $641, through September 30, 2021, and did not receive any of the proceeds from the offering. All proceeds went to the Selling Stockholders.

Amazon Agreement

On December 13, 2019, the Company signed a six-year contract (with two, two-year extension options, for a maximum term of 10 years) with Amazon.com Services, Inc. (together with its affiliates, “Amazon”) to provide cargo services under an Air Transportation Services Agreement (the “ATSA”). The agreement is structured for the Company to provide crew, maintenance, and insurance (“CMI”) services to Amazon. Sun Country began flying for Amazon in May 2020. On June 27, 2020, Amazon and the Company signed an amendment to the December 2019 agreement that increased the number of aircraft Sun Country operates from 10 to 12.

In December 2019, in connection with the ATSA, the Company issued warrants to Amazon to purchase an aggregate of up to 9,482,606 shares of common stock at an exercise price of approximately $15.17 per share. The exercise period of these warrants is through the eighth anniversary of the issue date. Of the 9,482,606 total Amazon warrants issued, 632,183 vested upon execution of the ATSA in December 2019. Thereafter, an additional 63,217 warrants will vest for each milestone of $8,000 in qualifying payments made by Amazon to the Company. During the three and nine months ended September 30, 2021, 189,652 and 568,956 warrants vested, respectively. The cumulative warrants vested as of September 30, 2021 were 1,454,008. During the three and nine months ended September 30, 2020, 126,435 warrants vested.

BASIS OF PRESENTATION

9 Months Ended

Sep. 30, 2021

BASIS OF PRESENTATION

BASIS OF PRESENTATION

2.	BASIS OF PRESENTATION

The accompanying unaudited Condensed Consolidated Financial Statements of Sun Country Airlines Holdings, Inc. should be read in conjunction with the consolidated financial statements contained in the Company’s Annual Report for the year ended December 31, 2020, which is included in the Company’s Final Prospectus dated March 16, 2021. During the nine months ended September 30, 2021, there were no significant changes to the Company’s critical accounting policies.

Certain prior period Stockholders’ Equity amounts were reclassified to conform to the current period presentation. This involved reducing the Common Stock values to $0.01 times the shares outstanding and

reclassifying those dollars to Additional Paid-In Capital. These reclasses were $238,694 as of the end of each quarter in fiscal year 2020. The reclass as of December 31, 2019 was $239,073.

Management believes that all adjustments necessary for the fair presentation of results, consisting of normally recurring items, have been included in the unaudited Condensed Consolidated Financial Statements for the interim periods presented. All material intercompany balances and transactions have been eliminated in consolidation. The preparation of financial statements in accordance with accounting principles generally accepted in the United States (“GAAP”) requires management to make certain estimates and assumptions that affect the reported amounts of assets and liabilities, revenues and expenses, and the disclosure of contingent assets and liabilities at the date of the financial statements. Actual results could differ from those estimates. Significant areas of judgment relate to passenger revenue recognition, maintenance under the built-in overhaul method, equity-based compensation, tax receivable agreement, lease accounting, impairment of goodwill, impairment of long-lived and intangible assets, air traffic liabilities, the loyalty program, as well as the valuation of Amazon warrants.

Due to severe impacts from the global coronavirus (“COVID-19”) pandemic, seasonal variations in the demand for air travel, the volatility of aircraft fuel prices and other factors, operating results for the three and nine months ended September 30, 2021 are not necessarily indicative of operating results for future quarters or for the year ending December 31, 2021. Air travel is also significantly impacted by general economic conditions, the amount of disposable income available to consumers, unemployment levels, corporate travel budgets, extreme or severe weather and natural disasters, disease outbreaks, fears of terrorism or war, and other factors beyond the Company’s control.

The Company operates its fiscal year on a calendar year basis.

Recently Adopted Accounting Standards

Income Taxes-Simplifying the Accounting for Income Taxes - In December 2019, the FASB issued ASU 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes, which removes certain exceptions related to the approach for intraperiod tax allocation, recognizing deferred tax liabilities for outside basis differences, and calculating income taxes in interim periods. The guidance also reduces complexity in certain areas, including franchise taxes that are partially based on income and accounting for tax law changes in interim periods. The standard was adopted prospectively effective January 1, 2021 and it did not have a material impact on the Company’s Condensed Consolidated Financial Statements.

IMPACT OF THE COVID19 PANDEMIC

9 Months Ended

Sep. 30, 2021

IMPACT OF THE COVID19 PANDEMIC

IMPACT OF THE COVID19 PANDEMIC

3.	IMPACT OF THE COVID-19 PANDEMIC

On March 11, 2020 the World Health Organization declared COVID-19 a global pandemic causing a massive market disruption to the aviation industry. While U.S. domestic passenger volumes have increased to date, those levels are still down when compared to the same time frame in 2019. The growth in the U.S. domestic air traffic since the trough in April 2020 has been led by leisure and visiting family and relatives (“VFR”) travelers as business travel remains more subdued with corporate workforces continuing to “work-from-home” and in-person meetings continuing to be conducted via videoconferencing and other virtual channels. Equity research analysts and other industry executives believe that the positive trends in leisure and VFR travel will continue as COVID-19 vaccines continue to become more widely distributed in 2021. COVID-19 vaccines have become widely available in the U.S. according to the Centers for Disease Control and Prevention (“the CDC”).

The Company continues to see many countries impose strict international travel restrictions, mandatory quarantines and/or COVID testing upon return from international travel that replaces prior travel restrictions. The U.S. market has recovered significantly faster than most other countries as a result of widespread vaccine distribution igniting the leisure travel recovery. However, given the uncertainty regarding COVID-19 variants, including but not limited to the Delta variant, the demand recovery may be impacted in both international and domestic travel.

U.S. passenger airlines have taken significant measures in response to the COVID-19 pandemic to maintain the health and safety of their employees and customers. Airlines have added new pre-boarding, boarding and in-flight procedures such as pre-flight health questionnaires and screenings, contactless check-in and luggage drop off, enhanced aircraft cleaning procedures, mandatory face masks for employees and passengers. These measures may have minimized the risk of infection while onboard and have increased customer confidence in safely returning to fly. Pre-and post-flight COVID-19 rapid testing has also been introduced as an additional tool to avoid mandatory quarantine periods for international and some domestic travel. This rapid testing, along with widely distributed vaccines, now mandated for airline workers, facilitate the recovery in air passenger traffic as travel restrictions are lifted across the globe.

Since the beginning of the COVID-19 pandemic, the air cargo market has experienced solid growth both in terms of volumes and yields. While the pandemic has caused a worldwide economic recession, e-commerce has thrived due to a variety of factors. Air cargo operators have been in a unique position to meet e-commerce demands that require a high level of speed, reliability, and security.

Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”)

On March 27, 2020, the CARES Act was passed by the U.S. Government. The provisions in the CARES Act provide for economic relief to eligible individuals and businesses affected by COVID-19. As a provider of scheduled passenger service, air cargo service, charter air transportation and related services, the Company is eligible for and has received certain benefits outlined in the CARES Act including but not limited to payroll tax breaks, government grants and government loans.

The grant amount recognized under the CARES Act Payroll Support Program for the year ended December 31, 2020 was $62,312 and was recorded in Special Items, net. During the first half of 2021, the Company received $37,040 from the Department of Treasury ("Treasury") under the Payroll Support Program Extension (“PSP2”). Further, in the first half of 2021, the Company received a grant of $34,547 under the American Rescue Plan Act of 2021 (“PSP3”) that was enacted on March 11, 2021, and authorizes the Treasury to provide additional assistance to passenger air carriers and contractors that received financial assistance under the CARES Act. During the three months ended September 30, 2021, no CARES Act grants were received. The grant amounts recognized in the nine months ended September 30, 2021 under the CARES Act of $71,587 were recorded in Special Items, net.

The CARES Act provides an employee retention credit (“CARES Employee Retention Credit”) which is a refundable tax credit against certain employment taxes. During the year ended December 31, 2020, the Company recorded $2,328 related to the CARES Employee Retention Credit within Special Items, net. In the three and nine months ended September 30, 2021, an additional $68 and $848, respectively, was recognized within Special Items, net. The $68 shown in the third quarter of 2021 relates to a true-up of the second quarter 2021 credit.

Under the CARES Act Loan Program, the Company received a $45,000 loan (the “CARES Act Loan”) from the Treasury on October 26, 2020, which was repaid in full on March 24, 2021.

In accordance with any grants and/or loans received under the CARES Act, the Company is required to comply with the relevant provisions of the CARES Act and the related implementing agreements which, among other things, include the following: the requirement to use the Payroll Support Payments exclusively for the continuation of payment of crewmember and employee wages, salaries and benefits; the requirement that certain levels of commercial air service be maintained until March 1, 2021, or if ordered by the U.S. Department of Transportation ("DOT"), March 1, 2022; the prohibitions on share repurchases of listed securities and the payment of common stock (or equivalent) dividends until September 30, 2022; and restrictions on the payment of certain executive compensation until April 1, 2023.

REVENUE

9 Months Ended

Sep. 30, 2021

REVENUE

REVENUE

Sun Country is a certificated air carrier generating Operating Revenues from Scheduled service, Charter service, Ancillary, Cargo and Other revenue. Scheduled service revenue mainly consists of base fares. Charter service revenue is primarily generated through service provided to the U.S. Department of Defense, collegiate and professional sports teams and casinos. Ancillary revenues consist of revenue earned from air travel-related services such as baggage fees, seat selection fees and on-board sales. Cargo consists of revenue earned from flying cargo aircraft under the ATSA. Other revenue consists primarily of revenue from services in connection with Sun Country Vacations products.

The significant categories comprising Operating Revenues are as follows:


	Three Months Ended September 30,				Nine Months Ended September 30,
	2021		2020		2021		2020
Scheduled service	$	80,212	$	26,954	$	201,905	$	159,063
Charter service		33,809		23,264		88,511		60,983
Ancillary		33,697		12,254		86,626		52,253
Passenger		147,718		62,472		377,042		272,299
Cargo		24,400		14,272		68,084		17,491
Other		1,545		1,229		5,338		3,889
Total Operating Revenue	$	173,663	$	77,973	$	450,464	$	293,679

The Company attributes and measures its Operating Revenue by geographic region as defined by the DOT for airline reporting based upon the origin of each passenger and cargo flight segment.

The Company’s operations are highly concentrated in the U.S. but include service to many international locations, primarily based on scheduled service to Latin America during the winter season and on military charter services.

Total Operating Revenues by geographic region are as follows:


	Three Months Ended September 30,				Nine Months Ended September 30,
	2021		2020		2021		2020
Domestic	$	167,660	$	75,289	$	429,508	$	270,062
Latin America		5,447		2,500		19,870		23,289
Other		556		184		1,086		328
Total Operating Revenue	$	173,663	$	77,973	$	450,464	$	293,679

Contract Balances

The Company’s contract assets primarily relate to costs incurred to get the 12 Amazon cargo aircraft ready for service. The balances are included in Other Current Assets and Other Assets on the Condensed Consolidated Balance Sheets. The amount expensed during the three and nine months ended September 30, 2021 was $208 and $515, respectively, and is included in Maintenance expense. The expense for both the three and nine months ended September 30, 2020 was $101, since Sun Country commenced flying for Amazon in May 2020.

The Company’s significant contract liabilities are comprised of 1) ticket sales for transportation that has not yet been provided (reported as Air Traffic Liabilities on the Condensed Consolidated Balance Sheets), 2) outstanding loyalty points that may be redeemed for future travel and other non-air travel awards (reported as Loyalty Program Liabilities on the Condensed Consolidated Balance Sheets) and 3) the Amazon Deferred Up-front Payment received (reported within Other Liabilities on the Condensed Consolidated Balance Sheets).

Contract Assets and Liabilities are as follows:


	September 30, 2021		December 31, 2020
Contract Assets
Costs to fulfill contract with Amazon	$	2,995	$	3,614
Air Traffic Liabilities	$	105,048	$	101,075
Loyalty Program Liabilities		20,311		22,069
Amazon Deferred Up-front Payment		4,462		5,240
Total Contract Liabilities	$	129,821	$	128,384

The balance in the Air Traffic Liabilities fluctuates with seasonal travel patterns. Most tickets can be purchased no more than twelve months in advance, therefore any revenue associated with tickets sold for future travel will be recognized within that timeframe. For the nine months ended September 30, 2021, $89,044 of revenue was recognized in Passenger revenue that was included in the Air Traffic Liabilities as of December 31, 2020.

As part of the ATSA executed in December 2019, Amazon paid the Company $10,300 toward start-up costs. Upon signing the ATSA, Amazon received 632,183 fully vested warrants to purchase the Company’s common stock, with a fair value of $4,667. This fair value was assigned to a portion of the $10,300 cash received from Amazon and the remaining $5,633 was recorded in Other Liabilities on the Company’s Condensed Consolidated Balance Sheet. This deferred up-front payment is being amortized into revenue on a pro-rata basis over the initial six years of the ATSA. For the three and nine months ended

September 30, 2021, $310 and $779 was amortized into Cargo revenue, respectively. For the three and nine months ended September 30, 2020, $146 and $184 was amortized into Cargo revenue, respectively.

Loyalty Program

The Sun Country Rewards program provides loyalty awards to program members based on accumulated loyalty points. Loyalty points are earned as a result of travel and purchases using the Company’s co- branded credit card. The balance of the Loyalty Program Liabilities fluctuates based on seasonal patterns, which impact the volume of loyalty points awarded through travel or issued to co-branded credit card and other partners (deferral of revenue) and loyalty points redeemed (recognition of revenue).

Changes in the Loyalty Program Liabilities are as follows:


	2021		2020
Balance – January 1	$	22,069	$	22,892
Loyalty Points Earned		3,058		3,124
Loyalty Points Redeemed⁽¹⁾		(4,816)		(3,892)
Balance – September 30	$	20,311	$	22,124

(1)

Principally relates to revenue recognized from the redemption of loyalty points for both air and non-air travel awards. Loyalty points are combined in one homogenous pool and are not separately identifiable. As such, the revenue recognized is comprised of points that were part of the Loyalty Program Liabilities balance at the beginning of the period, as well as points that were earned during the period.

The timing of loyalty point redemptions can vary significantly, however most new points, that are not left to expire, are redeemed within two years. Given the inherent uncertainty of the current operating environment due to COVID-19, the Company will continue to monitor redemption patterns and will adjust estimates in the future, which could be material.

- Definition

The entire disclosure of revenue from contract with customer to transfer good or service and to transfer nonfinancial asset. Includes, but is not limited to, disaggregation of revenue, credit loss recognized from contract with customer, judgment and change in judgment related to contract with customer, and asset recognized from cost incurred to obtain or fulfill contract with customer. Excludes insurance and lease contracts.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 606
-URI http://asc.fasb.org/topic&trid=49130388

Reference 2: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 606
-SubTopic 10
-Section 50
-Paragraph 10
-URI http://asc.fasb.org/extlink&oid=121604090&loc=SL49130551-203045

Reference 3: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 606
-SubTopic 10
-Section 50
-Paragraph 13
-Subparagraph (b)(2)
-URI http://asc.fasb.org/extlink&oid=121604090&loc=SL49130556-203045

Reference 4: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 606
-SubTopic 10
-Section 50
-Paragraph 12
-Subparagraph (b)
-URI http://asc.fasb.org/extlink&oid=121604090&loc=SL49130554-203045

Reference 5: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 606
-SubTopic 10
-Section 50
-Paragraph 9
-URI http://asc.fasb.org/extlink&oid=121604090&loc=SL49130550-203045

Reference 6: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 606
-SubTopic 10
-Section 50
-Paragraph 12
-Subparagraph (e)
-URI http://asc.fasb.org/extlink&oid=121604090&loc=SL49130554-203045

Reference 7: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 606
-SubTopic 10
-Section 50
-Paragraph 12
-Subparagraph (a)
-URI http://asc.fasb.org/extlink&oid=121604090&loc=SL49130554-203045

Reference 8: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 606
-SubTopic 10
-Section 50
-Paragraph 12
-Subparagraph (d)
-URI http://asc.fasb.org/extlink&oid=121604090&loc=SL49130554-203045

Reference 9: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 606
-SubTopic 10
-Section 50
-Paragraph 15
-URI http://asc.fasb.org/extlink&oid=121604090&loc=SL49130558-203045

Reference 10: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 606
-SubTopic 10
-Section 50
-Paragraph 12
-Subparagraph (c)
-URI http://asc.fasb.org/extlink&oid=121604090&loc=SL49130554-203045

+ Details

EARNINGS PER SHARE

9 Months Ended

Sep. 30, 2021

EARNINGS PER SHARE

EARNINGS PER SHARE

5.	EARNINGS PER SHARE

Basic earnings per share, which excludes dilution, is computed by dividing Net Income available to common stockholders by the weighted average number of shares of common stock outstanding for the period.

Diluted earnings per share reflects the potential dilution that could occur if securities or other contracts to issue common stock were exercised or converted into common stock. The number of incremental shares from the assumed issuance of shares relating to share based awards is calculated by applying the treasury stock method.

The following table shows the computation of basic and diluted earnings per share:


	Three Months Ended September 30,				Nine Months Ended September 30,
	2021		2020		2021		2020
Numerator:
Net Income	$	13,903	$	2,927	$	78,072	$	4,138

Denominator:
Weighted Average Common Shares Outstanding - Basic		57,355,104		46,805,950		54,368,231		46,805,950
Dilutive effect of Stock Options, RSUs and Warrants ⁽¹⁾		4,357,274		1,544,993		4,331,760		1,544,993
Weighted Average Common Shares Outstanding - Diluted		61,712,378		48,350,943		58,699,991		48,350,943

Basic earnings per share	$	0.24	$	0.06	$	1.44	$	0.09
Diluted earnings per share	$	0.23	$	0.06	$	1.33	$	0.09

(1)

There were 3,626,851 and 3,815,215 performance-based stock options outstanding at September 30, 2021 and 2020, respectively. As a result of the Company’s initial public offering, 75% of these options are expected to meet the performance conditions and are included in dilutive options at September 30, 2021. At September 30, 2020, these options were excluded from the calculation of diluted EPS since the performance conditions were not considered likely to be met.

Prior to their exercise on January 31, 2020, all 40,005,885 warrants held by the Apollo Stockholder were included in basic and diluted weighted average shares outstanding as they were equity classified, had an exercise price of approximately $0.0005, and all necessary conditions for issuance were met.

Warrants held by Amazon are included in dilutive weighted average shares outstanding as of the date the warrants vest. The unvested warrants held by Amazon have not been included in dilutive shares as their performance condition had not been satisfied.

AIRCRAFT

9 Months Ended

Sep. 30, 2021

AIRCRAFT

AIRCRAFT

Aircraft Fleet

As of September 30, 2021, Sun Country operated a fleet of 47 Boeing 737-NG aircraft, consisting of 46 Boeing 737-800s and one Boeing 737-700.

The following tables summarize the Company’s aircraft fleet activity for the nine months ended September 30, 2021 and 2020, respectively:


	December 31, 2020	Additions	Removals	September 30, 2021
Passenger:
Owned	14	7	—	21
Finance leases	5	3	—	8
Operating leases	12	—	(6)	6
Sun Country Airlines’ Fleet	31	10	(6)	35
Cargo:
Aircraft Operated for Amazon	12	—	—	12
Total Aircraft Operated	43	10	(6)	47

Six of the aircraft purchased during the nine months ended September 30, 2021 were financed through the Delayed Draw Term Loan Facility (see Note 7). All six of these were previously under operating leases. The remaining purchased aircraft was new to the Company’s fleet. During June and July 2021, the Company obtained an additional three aircraft under finance leases.


	December 31, 2019	Additions	Removals	September 30, 2020
Passenger:
Owned	5	9	—	14
Finance leases	10	—	(5)	5
Operating leases	14	—	(2)	12
Seasonal leases	2	—	(2)	—
Sun Country Airlines’ Fleet	31	9	(9)	31
Cargo:
Aircraft Operated for Amazon	—	10	—	10
Total Aircraft Operated	31	19	(9)	41

The nine passenger aircraft purchased during the nine months ended September 30, 2020 were financed through equipment trust certificates (see Note 7). Two of these aircraft were previously under operating leases, five were previously under finance leases, and the other two aircraft were new to the Company’s fleet.

In addition to the nine purchases discussed above, the Company refinanced three previously owned aircraft in January 2020 utilizing equipment trust certificates (see Note 7).

The 10 cargo aircraft added through September 30, 2020 relate to the Amazon Agreement (see Note 1).

During the nine months ended September 30, 2021, the Company executed lease agreements to add three incremental aircraft to its passenger fleet. The lease expiration dates range from fiscal year 2026 to fiscal year 2029 and these leases have been classified as finance leases. During the first twelve to eighteen months of the lease term, monthly lease payments are determined based on aircraft utilization, subject to limits set forth in the lease agreements. Monthly lease payments during the remainder of the lease term consist of fixed and variable amounts as set forth in the lease agreements.

Depreciation, amortization, and rent expense on aircraft is as follows:


		Three Months Ended				Nine Months Ended
		September 30,				September 30,
Aircraft Status	Expense Type	2021		2020		2021		2020
Owned	Depreciation	$	8,603	$	7,835	$	25,085	$	17,469
Finance Leased	Amortization		2,977		2,478		7,846		10,917
Operating Leased	Aircraft Rent		3,925		6,410		13,339		23,376
		$	15,505	$	16,723	$	46,270	$	51,762

Depreciation expense on owned aircraft and amortization expense on finance leased aircraft are both classified in Depreciation and Amortization on the Condensed Consolidated Statements of Operations.

Aircraft Lease Payment Deferrals

During the year ended December 31, 2020 the Company negotiated rent payment deferrals with a majority of its aircraft lessors due to COVID-19 cash flow impacts. There were no amounts deferred as of September 30, 2021 since the final payments were made in the second quarter of 2021. The amount deferred as of December 31, 2020 was $7,569, consisting of $2,133 under finance leases and $5,436 under operating leases. These deferrals were classified within the current portion of the respective lease liabilities on the Condensed Consolidated Balance Sheet as of December 31, 2020.

Aircraft Maintenance Deposits Contra-Assets

On April 11, 2018, the Company established a deposit contra-asset to represent the Company’s obligation to perform planned maintenance events on leased aircraft held as of that date. As of September 30, 2021 and December 31, 2020, the remaining balance of the contra-asset was $22,348 and $36,729, respectively. Of the $14,381 reduction in the contra-asset during the nine months ended September 30, 2021, $12,749 related to the purchase of six aircraft previously leased, whereupon the contra-assets and related maintenance deposits were written-off concurrently to Aircraft lease buy-out expense in Special Items, net (see Note 11). For the three months ended September 30, 2021 and 2020, the Company recognized $444 and $864, respectively, of the contra-asset as a reduction to Maintenance expense on the accompanying Condensed Consolidated Statements of Operations. For the nine months ended September 30, 2021 and 2020, the Company recognized $1,295 and $1,192, respectively, of the contra-asset as a reduction to Maintenance expense.

Over-market Liabilities

At the Acquisition Date, the Company acquired liabilities related to its over-market lease rates and over-market maintenance reserve payments.

As of the Acquisition Date, the Company recognized a liability representing lease terms which are unfavorable compared with market terms of similar leases. Upon adopting ASU 2016-02, Leases (Topic 842) effective January 1, 2019, this liability was reclassified as an offset to the Operating Lease Right-of-use Assets. The remaining unamortized balance of this contra-asset as of September 30, 2021 and December 31, 2020 was $10,904 and $16,501, respectively and is recorded within Operating Lease Right-

of-Use Assets. During the nine months ended September 30, 2021, the Company purchased six aircraft which were previously under leases with unfavorable terms, contributing to $3,765 of the decrease.

As of the Acquisition Date, Sun Country’s existing leases included payments for maintenance reserves in addition to the stated aircraft lease payments. For a substantial portion of these maintenance reserve payments, the Company does not expect to be reimbursed by the lessor. Therefore, a liability was established representing over-market maintenance reserve lease terms compared to market terms of similar leases. The remaining balance of this liability at September 30, 2021 and December 31, 2020 was $15,815 and $37,409, respectively. Of the $21,594 reduction in the over-market maintenance reserve liabilities during the nine months ended September 30, 2021, $17,435 related to the purchase of six aircraft previously leased. The over-market liabilities for those aircraft are included in Aircraft lease buy-out expense in Special Items, net (see Note 11).

Aircraft Rent expense for the three months ended September 30, 2021 and 2020, includes credits of $1,618 and $3,140, respectively, for the amortization of over-market liabilities established at the Acquisition Date related to lease rates and maintenance reserves. The Aircraft Rent expense credits for the nine months ended September 30, 2021 and 2020 were $5,992 and $10,970, respectively.

DEBT

9 Months Ended

Sep. 30, 2021

DEBT

DEBT

Lines of Credit – On February 10, 2021, the Company executed a five-year credit agreement with a group of lenders that replaced the Company’s prior $25,000 asset-based revolving credit facility (the “ABL Facility”). The agreement provides for a $25,000 Revolving Credit Facility and a $90,000 Delayed Draw Term Loan Facility, which are collectively referred to as the “Credit Facilities.” The interest rate on borrowings is determined by various alternative base rates plus an applicable margin ranging from 4% to 5%. The interest rate currently in effect on the Delayed Draw Term Loan facility is 6%, which is the minimum interest rate allowed under the Credit Facilities agreement. Borrowings on the Delayed Draw Term Loan Facility are subject to possible interest rate adjustment in February 2022. In addition, there is a commitment fee on the unused Revolving Credit Facility of 0.5%. The proceeds from the Revolving Credit Facility can be used for general corporate purposes. The proceeds from the Delayed Draw Term Loan Facility are to be used solely to finance the acquisition of aircraft or engines to be registered in the U.S. During the six months ended June 30, 2021, the Company drew $80,500 on the Delayed Draw Term Loan Facility to purchase six aircraft, which were previously under operating leases. Principal payments of $1,006 are due on a quarterly basis. As of September 30, 2021 , the Credit Facilities had an outstanding principal balance of $78,488. The Credit Facilities have financial covenants that require a minimum trailing 12 month EBITDAR (ranging from $62,100 as of September 30, 2021, $78,100 as of December 31, 2021, and $87,700 as of March 31, 2022 and beyond) and a minimum liquidity of $30,000 at the close of any business day.

Long-term Debt – In December 2019, the Company arranged for the issuance of Class A, Class B and Class C pass-through trust certificates Series 2019-1 (the “2019-1 EETC”), in an aggregate face amount of $248,587 for the purpose of financing or refinancing 13 used aircraft, which was completed in 2020. The Company is required to make semi-annual principal and interest payments each June and December. The outstanding principal balance as of September 30, 2021 was $211,605. The 13 aircraft serve as security for the loan and the total appraised value of these aircraft as of December 2019 was approximately $292,450.

Under the CARES Act Loan Program, on October 26, 2020, the Company was awarded a $45,000 loan, which was secured by the Company’s loyalty program and certain cash deposit accounts. The loan bore interest at a rate per annum equal to the Adjusted LIBO Rate plus 6.50% and was due to be repaid on the earlier of (i) October 24, 2025 or (ii) six months prior to the expiration date of any material loyalty program securing the loan. On March 24, 2021, the CARES Act Loan was repaid in full, including outstanding principal and accrued interest for a total repayment amount of $46,260.

The Company was in compliance with all covenants in its debt agreements at September 30, 2021.

Long-term Debt includes the following:


	September 30, 2021		December 31, 2020
Notes payable under the Company's 2019-1 EETC agreement dated December 2019, with original loan amounts of $248,587 payable in bi-annual installments, in June and December, through December 2027. These notes bear interest at an annual rate of between 4.13% and 6.95% and the weighted average interest rate is 4.78%.	$	211,605	$	227,347

Delayed Draw Term Loan Facility (see terms and conditions above)		78,488		—

U. S. Department of the Treasury CARES Act Loan (see terms and conditions above)		—		45,419

Notes payable to Wilmington Trust Company. Notes bear interest at an annual rate of 8.45% and were scheduled to mature Nov. 2023 to Feb. 2024. In April 2021, these notes were repaid.		—		12,506

Other Notes payable. These notes bear interest at an annual rate of approximately 5.0% and mature March 2029.		479		529

Total Debt		290,572		285,801

Less: Unamortized debt issuance costs		(3,752)		(3,338)

Less: Current Maturities of Long-term Debt		(19,835)		(26,118)
Total Long-term Debt	$	266,985	$	256,345

Future maturities of the outstanding Debt are as follows:


	Debt Principal		Amortization of Debt
	Payments		Issuance Costs		Net Debt
Remainder of 2021	$	9,641	$	(248)	$	9,393
2022		30,367		(956)		29,411
2023		42,358		(881)		41,477
2024		44,000		(758)		43,242
2025		49,087		(643)		48,444
Thereafter		115,119		(266)		114,853
Total as of September 30, 2021	$	290,572	$	(3,752)	$	286,820

The table below presents the Company’s debt measured at fair value:


	September 30, 2021		December 31, 2020
Carrying Amount	$	290,572	$	285,801
Fair Value	$	283,641	$	279,119

The fair value of the Company’s debt was based on the discounted amount of future cash flows using the Company’s end-of-period incremental borrowing rate for similar obligations. The estimates were primarily based on Level 3 inputs.

FUEL DERIVATIVES AND RISK MANAGEMENT

9 Months Ended

Sep. 30, 2021

FUEL DERIVATIVES AND RISK MANAGEMENT

FUEL DERIVATIVES AND RISK MANAGEMENT

8.	FUEL DERIVATIVES AND RISK MANAGEMENT

The Company’s operations are inherently dependent upon the price of aircraft fuel. To manage economic risks associated with fluctuations in aircraft fuel prices, the Company periodically enters into fuel option and swap contracts. The Company does not apply hedge accounting to its fuel derivative contracts, nor does it hold or issue them for trading purposes.

Fuel derivative contracts are recognized at fair value on the Condensed Consolidated Balance Sheets as Derivative Assets, if the fair value is in an asset position, or as Derivative Liabilities, if the fair value is in a liability position. The Company did not have any collateral held by counterparties to these agreements as of September 30, 2021 and December 31, 2020. Derivatives where the payment due date is greater than one year from the balance sheet date are classified as long-term.

Changes in Derivative Assets (Liabilities) are as follows:


	Nine Months Ended September 30,
	2021		2020
Balance - January 1	$	(1,174)	$	2,233
Non-cash Gains (Losses)		3,527		(15,766)
Contract Settlements		(2,105)		7,531
Balance - September 30	$	248	$	(6,002)

Fuel Derivative Gains (Losses) consist of the following:


	Three Months Ended September 30,				Nine Months Ended September 30,
	2021		2020		2021		2020
Non-cash Gains (Losses)	$	(72)	$	290	$	3,527	$	(15,766)
Cash Premiums Paid		—		(53)		—		(1,954)
Total Fuel Derivative Gains (Losses)	$	(72)	$	237	$	3,527	$	(17,720)

Fuel derivative gains and losses are classified in Aircraft Fuel on the Condensed Consolidated Statements of Operations.

As of September 30, 2021, the Company had no outstanding fuel derivative contracts, but there were $248 of matured contracts that had not yet settled.

FAIR VALUE MEASUREMENTS

9 Months Ended

Sep. 30, 2021

FAIR VALUE MEASUREMENTS

FAIR VALUE MEASUREMENTS

9.	FAIR VALUE MEASUREMENTS

Accounting standards define fair value as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. The standards also establish a fair value hierarchy, which requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. Under GAAP, there are three levels of inputs that may be used to measure fair value:

Level 1 – Quoted prices for identical assets or liabilities in active markets.

Level 2 – Observable inputs other than Level 1 prices, such as quoted prices for similar assets or liabilities in active markets; quoted prices for identical or similar assets or liabilities in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities.

Level 3 – Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities.

The Company uses the following valuation methodologies for financial instruments measured at fair value on a recurring basis.

Derivative Instruments – Derivative instruments are accounted for as either assets or liabilities and are carried at fair value. The fair value for fuel derivative options and swaps is determined utilizing an option pricing model that uses inputs that are readily available in active markets or can be derived from information available in active markets and are classified within Level 2.

The following table summarizes the assets and liabilities measured at fair value on a recurring basis:


	September 30, 2021
	Level 1		Level 2		Level 3		Total
Assets
Fuel Derivative Contracts	$	—	$	248	$	—	$	248
Total Assets measured at fair value on a recurring basis	$	—	$	248	$	—	$	248


	December 31, 2020
	Level 1		Level 2		Level 3		Total
Liabilities
Fuel Derivative Contracts	$	—	$	1,174	$	—	$	1,174
Total Liabilities measured at fair value on a recurring basis	$	—	$	1,174	$	—	$	1,174

Certain assets are measured at fair value on a nonrecurring basis. The Company’s non-financial assets, which primarily consist of property and equipment, goodwill and other intangible assets are not required to be measured at fair value on a recurring basis and are reported at carrying value. However, on a periodic basis whenever events or changes in circumstances indicate that their carrying value may not be recoverable, non-financial assets are assessed for impairment and, if applicable, written down to fair value using significant unobservable inputs, classified as Level 3.

The Company’s debt portfolio consists of 2019-1 EETC certificates, borrowings under the Delayed Draw Term Loan Facility, and fixed-rate notes payable. See Note 7 for debt fair values.

- Definition

The entire disclosure for the fair value of financial instruments (as defined), including financial assets and financial liabilities (collectively, as defined), and the measurements of those instruments as well as disclosures related to the fair value of non-financial assets and liabilities. Such disclosures about the financial instruments, assets, and liabilities would include: (1) the fair value of the required items together with their carrying amounts (as appropriate); (2) for items for which it is not practicable to estimate fair value, disclosure would include: (a) information pertinent to estimating fair value (including, carrying amount, effective interest rate, and maturity, and (b) the reasons why it is not practicable to estimate fair value; (3) significant concentrations of credit risk including: (a) information about the activity, region, or economic characteristics identifying a concentration, (b) the maximum amount of loss the entity is exposed to based on the gross fair value of the related item, (c) policy for requiring collateral or other security and information as to accessing such collateral or security, and (d) the nature and brief description of such collateral or security; (4) quantitative information about market risks and how such risks are managed; (5) for items measured on both a recurring and nonrecurring basis information regarding the inputs used to develop the fair value measurement; and (6) for items presented in the financial statement for which fair value measurement is elected: (a) information necessary to understand the reasons for the election, (b) discussion of the effect of fair value changes on earnings, (c) a description of [similar groups] items for which the election is made and the relation thereof to the balance sheet, the aggregate carrying value of items included in the balance sheet that are not eligible for the election; (7) all other required (as defined) and desired information.

+ References + Details

INCOME TAXES

9 Months Ended

Sep. 30, 2021

INCOME TAXES

INCOME TAXES

10.	INCOME TAXES

The Company's effective tax rate for the three and nine months ended September 30, 2021 was 14.2% and 18.0%, respectively. The effective tax rate for the three and nine months ended September 30, 2020 was 24.0% and 26.2%, respectively. The effective tax rate represents a blend of federal and state taxes and includes the impact of certain nondeductible or nontaxable items. The decrease in the three-month rate is primarily due to a favorable permanent benefit related to stock compensation. The decrease in the nine-month rate is primarily due to favorable permanent differences related to the Tax Receivable Agreement and stock compensation deductions.

Tax Receivable Agreement

In connection with the Company’s IPO, the Company entered into an income Tax Receivable Agreement (the “Tax Receivable Agreement” or “TRA”) with our pre-IPO stockholders (the “TRA holders”). The Tax Receivable Agreement provides for the payment by the Company to the TRA holders of 85% of the amount of cash savings, if any, in U.S. federal, state, local, and foreign income tax that the Company actually realizes (or are deemed to realize in certain circumstances) as a result of certain tax attributes that existed at the time of the IPO (the “Pre-IPO Tax Attributes”). The Company will retain the benefit of the remaining 15% of these cash savings.

Payments under the Tax Receivable Agreement will not begin until at least 12 months after the closing of the Company’s IPO. In the event that the Company is prohibited from making payments under the Tax Receivable Agreement for tax benefits utilized during any periods pursuant to the CARES Act or other

governmental programs, the Company is not required to make payments under the Tax Receivable Agreement for Pre-IPO Tax Attributes utilized in such periods. Based on the Company's current participation in the CARES Act Program, the Company does not expect to make payments under the Tax Receivable Agreement until 2023, and thus is presented in "Long-term Liabilities" on the Condensed Consolidated Balance Sheet.

If the Company does not generate sufficient taxable income in the aggregate over the term of the Tax Receivable Agreement to utilize the tax benefits, then it would not be required to make the related TRA payments. Upon the closing of the IPO, the Company recognized a non-current liability of $115,200 which represented undiscounted aggregate payments that were expected to be paid to the TRA holders under the Tax Receivable Agreement, with an offset to Stockholders' Equity. Subsequent changes in the measurement of the liability are being adjusted through the Consolidated Statements of Operations. The Tax Receivable Agreement liability is an estimate and actual amounts payable under the Tax Receivable Agreement could differ from this estimate based on, among other things, (i) generation of future taxable income over the term of the Tax Receivable Agreement, (ii) the Company’s participation in future government programs, (iii) stock option activity during periods prior to the commencement of payments under the Tax Receivable Agreement and (iv) future changes in tax laws. These factors could result in an increase or decrease in the related liability which would be recognized in the Company’s earnings in the period of such change. In the second quarter of 2021, the Company reduced the TRA liability balance by $18,700, from $115,200 to $96,500. The offsetting credit was recorded in Other Non-operating Income. The decrease in the TRA liability was mainly due to the receipt of the PSP3 grant of $34,547, which extended the time period in which distributions made to shareholders are restricted from March 31, 2022 to September 30, 2022, and also resulted in an increase in forecasted 2021 pre-tax income.

An additional $1,100 reduction in the liability was made during the three months ended September 30, 2021, due to actual financial results exceeding forecasted results used in the valuation of the TRA. Since recording the initial estimate and through September 30, 2021, the Company has reduced the TRA liability balance by $19,800, from $115,200 to $95,400.

- Definition

The entire disclosure for income taxes. Disclosures may include net deferred tax liability or asset recognized in an enterprise's statement of financial position, net change during the year in the total valuation allowance, approximate tax effect of each type of temporary difference and carryforward that gives rise to a significant portion of deferred tax liabilities and deferred tax assets, utilization of a tax carryback, and tax uncertainties information.

+ References + Details

SPECIAL ITEMS, NET

9 Months Ended

Sep. 30, 2021

SPECIAL ITEMS, NET

SPECIAL ITEMS, NET

11.	SPECIAL ITEMS, NET

Special Items, net on the Condensed Consolidated Statements of Operations consist of the following:


	Three Months Ended September 30,				Nine Months Ended September 30,
	2021		2020		2021		2020
CARES Act grant recognition ⁽¹⁾	$	—	$	(30,796)	$	(71,587)	$	(62,312)
CARES Act employee retention credit ⁽²⁾		(68)		(2,069)		(848)		(2,069)
Aircraft lease buy-out expense ⁽³⁾		—		—		6,963		—
Other		3		13		16		48
Total Special Items, net	$	(65)	$	(32,852)	$	(65,456)	$	(64,333)

(1)

During the first half of 2021, the Treasury awarded the Company grants totaling $37,040 under PSP2. Further, during the first half of 2021, the Company received a grant of $34,547 under PSP3. The grant amount recognized under the CARES Act Payroll Support Program for the nine months ended September 30, 2020 was $62,312, of which $31,516 was recognized in the second quarter and $30,796 was recognized in the third quarter.

(2)

The CARES Act Employee Retention credit relates to a refundable tax credit against certain employment taxes. The $68 shown in the third quarter of fiscal year 2021 relates to a true-up of the second quarter 2021 credit.

(3)

Five aircraft were purchased in March 2021 that were previously under operating leases. One additional aircraft was purchased in April 2021 that was previously under an operating lease. Aircraft lease buy-out expense represents the net costs incurred to terminate the leases on those six aircraft. This includes the associated lease termination costs, write-off of previously capitalized maintenance deposits, and the write-off of over-market liabilities (see Note 6).

COMMITMENTS AND CONTINGENCIES

9 Months Ended

Sep. 30, 2021

COMMITMENTS AND CONTINGENCIES

COMMITMENTS AND CONTINGENCIES

12.	COMMITMENTS AND CONTINGENCIES

The Company has contractual obligations and commitments primarily with regard to lease arrangements, repayment of debt (see Note 7) and probable future purchases of aircraft.

Sun Country also has a contractual obligation to pay its pre-IPO stockholders under the terms of the income Tax Receivable Agreement (see Note 10).

The Company is subject to various legal proceedings in the normal course of business and expenses legal costs as incurred. Management does not believe these proceedings will have a materially adverse effect on the Company.

OPERATING SEGMENTS

9 Months Ended

Sep. 30, 2021

OPERATING SEGMENTS

OPERATING SEGMENTS

13.	OPERATING SEGMENTS

Operating segments are defined as components of an enterprise about which separate financial information is both available and evaluated regularly by the Chief Operating Decision Maker and is used in resource allocation and performance assessments. The Company’s Chief Operating Decision Maker is considered to be the Company’s Chief Executive Officer. The Company’s Chief Operating Decision Maker makes resource allocation decisions to maximize the Company’s consolidated financial results. Substantially all the Company’s tangible assets are located in the U.S. or relate to flight equipment, which is mobile across geographic markets. The Company has two operating segments: Passenger and Cargo.

The Company’s Passenger segment has two internal passenger groups (Scheduled and Charter), but since resources are shared and expenses are combined, they are considered one Passenger operating segment. The Company’s Passenger operations are highly concentrated in the U.S., but include service to many international locations, primarily based on scheduled service to Latin America during the winter season and on military charter services. All goodwill is related to the Passenger Operating Segment.

The Cargo segment began providing air cargo services under the ATSA in May 2020. Fuel consumed in Cargo operations is directly reimbursed by Amazon and therefore aircraft fuel revenue is presented net of such reimbursements on the Condensed Consolidated Statements of Operations. Fuel consumed in Cargo maintenance activities is included in the Cargo segment. Certain operating expenses are directly attributable to the Cargo operating segment.

Certain operating expenses are allocated between the operating segments. Non-Fuel operating expenses are allocated based on metrics such as block hours, fleet count and departures, which best align with the

nature of the respective expense. CARES Act credits, included in Special Items, net, are allocated based on the respective segment salaries, wages, and benefits.

The following tables present financial information for the Company’s two operating segments: Passenger and Cargo. Assets by segment are not reviewed by the Chief Operating Decision Maker and have not been presented herein.


	Three Months Ended September 30, 2021						Three Months Ended September 30, 2020
	Passenger		Cargo		Consolidated		Passenger		Cargo⁽¹⁾		Consolidated
Operating Revenues	$	149,263	$	24,400	$	173,663	$	63,701	$	14,272	$	77,973
Non-Fuel Operating Expenses		99,279		15,800		115,079		76,377		12,492		88,869
Aircraft Fuel		36,556		91		36,647		13,139		—		13,139
Special Items, net		(65)		—		(65)		(25,534)		(7,318)		(32,852)
Total Operating Expenses		135,770		15,891		151,661		63,982		5,174		69,156
Operating Income (Loss)	$	13,493	$	8,509		22,002	$	(281)	$	9,098		8,817
Interest Income						28						26
Interest Expense						(6,286)						(5,157)
Other, net						456						164
Income before Income Tax					$	16,200					$	3,850


	Nine Months Ended September 30, 2021						Nine Months Ended September 30, 2020
	Passenger		Cargo		Consolidated		Passenger		Cargo⁽¹⁾		Consolidated
Operating Revenues	$	382,380	$	68,084	$	450,464	$	276,188	$	17,491	$	293,679
Non-Fuel Operating Expenses		278,843		50,272		329,115		249,423		17,398		266,821
Aircraft Fuel		90,468		163		90,631		69,377		—		69,377
Special Items, net		(47,055)		(18,401)		(65,456)		(53,646)		(10,687)		(64,333)
Total Operating Expenses		322,256		32,034		354,290		265,154		6,711		271,865
Operating Income	$	60,124	$	36,050		96,174	$	11,034	$	10,780		21,814
Interest Income						52						340
Interest Expense						(19,487)						(16,215)
Other, net						18,505						(331)
Income before Income Tax					$	95,244					$	5,608

(1)

As air cargo operations commenced in May 2020, there are limited Cargo amounts included in the three and nine month periods ended September 30, 2020.

- Definition

The entire disclosure for reporting segments including data and tables. Reportable segments include those that meet any of the following quantitative thresholds a) it's reported revenue, including sales to external customers and intersegment sales or transfers is 10 percent or more of the combined revenue, internal and external, of all operating segments b) the absolute amount of its reported profit or loss is 10 percent or more of the greater, in absolute amount of 1) the combined reported profit of all operating segments that did not report a loss or 2) the combined reported loss of all operating segments that did report a loss c) its assets are 10 percent or more of the combined assets of all operating segments.

+ References

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+ Details

SUBSEQUENT EVENTS

9 Months Ended

Sep. 30, 2021

SUBSEQUENT EVENTS

SUBSEQUENT EVENTS

14.	SUBSEQUENT EVENTS

The Company evaluated subsequent events for the period from the Balance Sheet date through November 1, 2021, the date that the Condensed Consolidated Financial Statements were available to be issued.

* * * * * *

BASIS OF PRESENTATION (Policies)

9 Months Ended

Sep. 30, 2021

BASIS OF PRESENTATION

Recently Adopted Accounting Standards

Recently Adopted Accounting Standards

REVENUE (Tables)

9 Months Ended

Sep. 30, 2021

REVENUE

Schedule of significant categories comprising operating revenues


	Three Months Ended September 30,				Nine Months Ended September 30,
	2021		2020		2021		2020
Scheduled service	$	80,212	$	26,954	$	201,905	$	159,063
Charter service		33,809		23,264		88,511		60,983
Ancillary		33,697		12,254		86,626		52,253
Passenger		147,718		62,472		377,042		272,299
Cargo		24,400		14,272		68,084		17,491
Other		1,545		1,229		5,338		3,889
Total Operating Revenue	$	173,663	$	77,973	$	450,464	$	293,679

Schedule of operating revenues by geographic region


	Three Months Ended September 30,				Nine Months Ended September 30,
	2021		2020		2021		2020
Domestic	$	167,660	$	75,289	$	429,508	$	270,062
Latin America		5,447		2,500		19,870		23,289
Other		556		184		1,086		328
Total Operating Revenue	$	173,663	$	77,973	$	450,464	$	293,679

Summary of contract assets and liabilities


	September 30, 2021		December 31, 2020
Contract Assets
Costs to fulfill contract with Amazon	$	2,995	$	3,614
Air Traffic Liabilities	$	105,048	$	101,075
Loyalty Program Liabilities		20,311		22,069
Amazon Deferred Up-front Payment		4,462		5,240
Total Contract Liabilities	$	129,821	$	128,384

Schedule of change in contract with customer, liability


	2021		2020
Balance – January 1	$	22,069	$	22,892
Loyalty Points Earned		3,058		3,124
Loyalty Points Redeemed⁽¹⁾		(4,816)		(3,892)
Balance – September 30	$	20,311	$	22,124

(1)

EARNINGS PER SHARE (Tables)

9 Months Ended

Sep. 30, 2021

EARNINGS PER SHARE

Summary of computation of basic and diluted earnings per share


	Three Months Ended September 30,				Nine Months Ended September 30,
	2021		2020		2021		2020
Numerator:
Net Income	$	13,903	$	2,927	$	78,072	$	4,138

Denominator:
Weighted Average Common Shares Outstanding - Basic		57,355,104		46,805,950		54,368,231		46,805,950
Dilutive effect of Stock Options, RSUs and Warrants ⁽¹⁾		4,357,274		1,544,993		4,331,760		1,544,993
Weighted Average Common Shares Outstanding - Diluted		61,712,378		48,350,943		58,699,991		48,350,943

Basic earnings per share	$	0.24	$	0.06	$	1.44	$	0.09
Diluted earnings per share	$	0.23	$	0.06	$	1.33	$	0.09

(1)

AIRCRAFT (Tables)

9 Months Ended

Sep. 30, 2021

AIRCRAFT

Summary of aircraft fleet activity


	December 31, 2020	Additions	Removals	September 30, 2021
Passenger:
Owned	14	7	—	21
Finance leases	5	3	—	8
Operating leases	12	—	(6)	6
Sun Country Airlines’ Fleet	31	10	(6)	35
Cargo:
Aircraft Operated for Amazon	12	—	—	12
Total Aircraft Operated	43	10	(6)	47


	December 31, 2019	Additions	Removals	September 30, 2020
Passenger:
Owned	5	9	—	14
Finance leases	10	—	(5)	5
Operating leases	14	—	(2)	12
Seasonal leases	2	—	(2)	—
Sun Country Airlines’ Fleet	31	9	(9)	31
Cargo:
Aircraft Operated for Amazon	—	10	—	10
Total Aircraft Operated	31	19	(9)	41

Schedule of depreciation, amortization, and rent expense on aircraft


		Three Months Ended				Nine Months Ended
		September 30,				September 30,
Aircraft Status	Expense Type	2021		2020		2021		2020
Owned	Depreciation	$	8,603	$	7,835	$	25,085	$	17,469
Finance Leased	Amortization		2,977		2,478		7,846		10,917
Operating Leased	Aircraft Rent		3,925		6,410		13,339		23,376
		$	15,505	$	16,723	$	46,270	$	51,762

DEBT (Tables)

9 Months Ended

Sep. 30, 2021

DEBT

Summary of long term debt


	September 30, 2021		December 31, 2020
Notes payable under the Company's 2019-1 EETC agreement dated December 2019, with original loan amounts of $248,587 payable in bi-annual installments, in June and December, through December 2027. These notes bear interest at an annual rate of between 4.13% and 6.95% and the weighted average interest rate is 4.78%.	$	211,605	$	227,347

Delayed Draw Term Loan Facility (see terms and conditions above)		78,488		—

U. S. Department of the Treasury CARES Act Loan (see terms and conditions above)		—		45,419

Notes payable to Wilmington Trust Company. Notes bear interest at an annual rate of 8.45% and were scheduled to mature Nov. 2023 to Feb. 2024. In April 2021, these notes were repaid.		—		12,506

Other Notes payable. These notes bear interest at an annual rate of approximately 5.0% and mature March 2029.		479		529

Total Debt		290,572		285,801

Less: Unamortized debt issuance costs		(3,752)		(3,338)

Less: Current Maturities of Long-term Debt		(19,835)		(26,118)
Total Long-term Debt	$	266,985	$	256,345

Schedule of future maturities of the outstanding debt


	Debt Principal		Amortization of Debt
	Payments		Issuance Costs		Net Debt
Remainder of 2021	$	9,641	$	(248)	$	9,393
2022		30,367		(956)		29,411
2023		42,358		(881)		41,477
2024		44,000		(758)		43,242
2025		49,087		(643)		48,444
Thereafter		115,119		(266)		114,853
Total as of September 30, 2021	$	290,572	$	(3,752)	$	286,820

Schedule of debt measured at fair value


	September 30, 2021		December 31, 2020
Carrying Amount	$	290,572	$	285,801
Fair Value	$	283,641	$	279,119

- Definition

Tabular disclosure of long-debt instruments or arrangements, including identification, terms, features, collateral requirements and other information necessary to a fair presentation. These are debt arrangements that originally required repayment more than twelve months after issuance or greater than the normal operating cycle of the entity, if longer.

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+ Details

FUEL DERIVATIVES AND RISK MANAGEMENT (Tables)

9 Months Ended

Sep. 30, 2021

FUEL DERIVATIVES AND RISK MANAGEMENT

Schedule of changes in derivative assets (liabilities)


	Nine Months Ended September 30,
	2021		2020
Balance - January 1	$	(1,174)	$	2,233
Non-cash Gains (Losses)		3,527		(15,766)
Contract Settlements		(2,105)		7,531
Balance - September 30	$	248	$	(6,002)

Schedule of fuel derivative gains (losses)


	Three Months Ended September 30,				Nine Months Ended September 30,
	2021		2020		2021		2020
Non-cash Gains (Losses)	$	(72)	$	290	$	3,527	$	(15,766)
Cash Premiums Paid		—		(53)		—		(1,954)
Total Fuel Derivative Gains (Losses)	$	(72)	$	237	$	3,527	$	(17,720)

FAIR VALUE MEASUREMENTS (Tables)

9 Months Ended

Sep. 30, 2021

FAIR VALUE MEASUREMENTS

Summary of assets and liabilities measured at fair value on a recurring basis


	September 30, 2021
	Level 1		Level 2		Level 3		Total
Assets
Fuel Derivative Contracts	$	—	$	248	$	—	$	248
Total Assets measured at fair value on a recurring basis	$	—	$	248	$	—	$	248


	December 31, 2020
	Level 1		Level 2		Level 3		Total
Liabilities
Fuel Derivative Contracts	$	—	$	1,174	$	—	$	1,174
Total Liabilities measured at fair value on a recurring basis	$	—	$	1,174	$	—	$	1,174

- Definition

Tabular disclosure of financial instruments measured at fair value, including those classified in shareholders' equity measured on a recurring or nonrecurring basis. Disclosures include, but are not limited to, fair value measurements recorded and the reasons for the measurements, level within the fair value hierarchy in which the fair value measurements are categorized and transfers between levels 1 and 2. Nonrecurring fair value measurements are those that are required or permitted in the statement of financial position in particular circumstances.

+ References + Details

SPECIAL ITEMS, NET (Tables)

9 Months Ended

Sep. 30, 2021

SPECIAL ITEMS, NET

Schedule of special items, net


	Three Months Ended September 30,				Nine Months Ended September 30,
	2021		2020		2021		2020
CARES Act grant recognition ⁽¹⁾	$	—	$	(30,796)	$	(71,587)	$	(62,312)
CARES Act employee retention credit ⁽²⁾		(68)		(2,069)		(848)		(2,069)
Aircraft lease buy-out expense ⁽³⁾		—		—		6,963		—
Other		3		13		16		48
Total Special Items, net	$	(65)	$	(32,852)	$	(65,456)	$	(64,333)

(1)

(2)

(3)

OPERATING SEGMENTS (Tables)

9 Months Ended

Sep. 30, 2021

OPERATING SEGMENTS

Summary of financial information for the operating segments


	Three Months Ended September 30, 2021						Three Months Ended September 30, 2020
	Passenger		Cargo		Consolidated		Passenger		Cargo⁽¹⁾		Consolidated
Operating Revenues	$	149,263	$	24,400	$	173,663	$	63,701	$	14,272	$	77,973
Non-Fuel Operating Expenses		99,279		15,800		115,079		76,377		12,492		88,869
Aircraft Fuel		36,556		91		36,647		13,139		—		13,139
Special Items, net		(65)		—		(65)		(25,534)		(7,318)		(32,852)
Total Operating Expenses		135,770		15,891		151,661		63,982		5,174		69,156
Operating Income (Loss)	$	13,493	$	8,509		22,002	$	(281)	$	9,098		8,817
Interest Income						28						26
Interest Expense						(6,286)						(5,157)
Other, net						456						164
Income before Income Tax					$	16,200					$	3,850


	Nine Months Ended September 30, 2021						Nine Months Ended September 30, 2020
	Passenger		Cargo		Consolidated		Passenger		Cargo⁽¹⁾		Consolidated
Operating Revenues	$	382,380	$	68,084	$	450,464	$	276,188	$	17,491	$	293,679
Non-Fuel Operating Expenses		278,843		50,272		329,115		249,423		17,398		266,821
Aircraft Fuel		90,468		163		90,631		69,377		—		69,377
Special Items, net		(47,055)		(18,401)		(65,456)		(53,646)		(10,687)		(64,333)
Total Operating Expenses		322,256		32,034		354,290		265,154		6,711		271,865
Operating Income	$	60,124	$	36,050		96,174	$	11,034	$	10,780		21,814
Interest Income						52						340
Interest Expense						(19,487)						(16,215)
Other, net						18,505						(331)
Income before Income Tax					$	95,244					$	5,608

(1)

As air cargo operations commenced in May 2020, there are limited Cargo amounts included in the three and nine month periods ended September 30, 2020.

COMPANY BACKGROUND- Stock split (Details)	1 Months Ended
COMPANY BACKGROUND- Stock split (Details)	Mar. 31, 2021 shares
COMPANY BACKGROUND
Stock split ratio	18.8886
Share issued as a result of stock split	44,226,587

COMPANY BACKGROUND - Initial Public Offering (Details) - USD ($) $ / shares in Units, $ in Thousands				1 Months Ended		9 Months Ended
	Mar. 19, 2021	Mar. 17, 2021	Mar. 16, 2021	Oct. 31, 2021	May 31, 2021	Sep. 30, 2021
Offering expenses						$ 8,706
Apollo Stockholder
Shares issued					7,250,000
Share price					$ 34.50
Apollo Stockholder \| Jude Bricker, the Chief Executive Officer
Shares issued				8,500,000
Share price				$ 32.50
IPO
Shares issued	10,454,545		9,090,909		8,337,500
Share price			$ 24.00			$ 24.00
Offering expenses				$ 641	$ 640
Proceeds from issuance of common stock	$ 225,006
Underwriters option
Shares issued		1,363,636		1,275,000	1,087,500
Private placement \| Apollo Stockholder \| P A R Investment Partners, L.P
Shares issued						2,216,312
Aggregate purchase price						$ 50,000
Share price percentage of I P O share price						94.00%
Private placement \| Apollo Stockholder \| Certain funds or accounts managed by an investment adviser subsidiary of Blackrock, Inc
Shares issued						2,216,308
Aggregate purchase price						$ 50,000
Share price percentage of I P O share price						94.00%

COMPANY BACKGROUND (Details) $ / shares in Units, $ in Thousands				1 Months Ended	3 Months Ended		9 Months Ended
	Jun. 27, 2020 aircraft	Jun. 26, 2020 aircraft	Dec. 13, 2019 USD ($) item $ / shares shares	Mar. 31, 2021 shares	Sep. 30, 2021 shares	Sep. 30, 2020 shares	Sep. 30, 2021 shares	Sep. 30, 2020 shares	Jan. 30, 2020 $ / shares
Exercise price \| $ / shares									$ 0.0005
Amazon Agreement
Term of each renewal option			6 years
Number of extension option \| item			2
Term of agreement			2 years
Threshold term of agreement			10 years
Number of aircrafts operated \| aircraft	12	10
Warrants issued			9,482,606
Exercise price \| $ / shares			$ 15.17
Warrants vested			632,183		189,652	126,435	568,956	126,435
Number of warrants that vest on achievement of each milestone			63,217
Milestone achievement for warrants to vest \| $			$ 8,000
Cumulative warrants vested					1,454,008		1,454,008
2021 Omnibus Incentive Plan \| Maximum
Common stock-shares authorized				3,600,000
2018 Equity Incentive Plan
Number of share grants				0

BASIS OF PRESENTATION (Details) - USD ($) $ / shares in Units, $ in Thousands					3 Months Ended
	Dec. 31, 2020	Jun. 30, 2020	Mar. 31, 2020	Dec. 31, 2019	Sep. 30, 2020	Sep. 30, 2021
BASIS OF PRESENTATION
Common stock-par value (in dollars per share)	$ 0.01					$ 0.01
Reclassification in common stock value	$ 238,694	$ 238,694	$ 238,694	$ 239,073	$ 238,694

IMPACT OF THE COVID19 PANDEMIC (Details) - USD ($) $ in Thousands		3 Months Ended				6 Months Ended	9 Months Ended		12 Months Ended
	Oct. 26, 2020	Sep. 30, 2021	Jun. 30, 2021	Sep. 30, 2020	Jun. 30, 2020	Jun. 30, 2021	Sep. 30, 2021	Sep. 30, 2020	Dec. 31, 2020
IMPACT OF THE COVID19 PANDEMIC
Grants recognized		$ 68		$ 30,796	$ 31,516		$ 71,587	$ 62,312
CARES Act employee retention credit		68		$ 2,069			848	$ 2,069	$ 2,328
U. S. Department of the Treasury CARES Act Loan
IMPACT OF THE COVID19 PANDEMIC
Loan received	$ 45,000
PSP2
IMPACT OF THE COVID19 PANDEMIC
Grants recognized						$ 37,040			$ 62,312
Grants awarded						37,040
PSP3
IMPACT OF THE COVID19 PANDEMIC
Grants awarded		$ 0	$ 34,547			$ 34,547	$ 71,587

REVENUE - Disaggregation of Operating Revenue (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2021	Sep. 30, 2020	Sep. 30, 2021	Sep. 30, 2020
REVENUE
Operating Revenues	$ 173,663	$ 77,973	$ 450,464	$ 293,679
Domestic
REVENUE
Operating Revenues	167,660	75,289	429,508	270,062
Latin America
REVENUE
Operating Revenues	5,447	2,500	19,870	23,289
Other
REVENUE
Operating Revenues	556	184	1,086	328
Passenger
REVENUE
Operating Revenues	147,718	62,472	377,042	272,299
Scheduled service
REVENUE
Operating Revenues	80,212	26,954	201,905	159,063
Charter service
REVENUE
Operating Revenues	33,809	23,264	88,511	60,983
Ancillary
REVENUE
Operating Revenues	33,697	12,254	86,626	52,253
Cargo
REVENUE
Operating Revenues	24,400	14,272	68,084	17,491
Other
REVENUE
Operating Revenues	$ 1,545	$ 1,229	$ 5,338	$ 3,889

REVENUE - Contract Balances (Details) $ in Thousands	3 Months Ended		9 Months Ended
REVENUE - Contract Balances (Details) $ in Thousands	Sep. 30, 2021 USD ($)	Sep. 30, 2020 USD ($)	Sep. 30, 2021 USD ($) aircraft	Sep. 30, 2020 USD ($)	Dec. 31, 2020 USD ($)	Dec. 31, 2019 USD ($)
REVENUE
Maintenance expense	$ 9,660	$ 6,338	$ 30,170	$ 15,242
Total Contract Liabilities	129,821		129,821		$ 128,384
Air Traffic Liabilities
REVENUE
Total Contract Liabilities	105,048		$ 105,048		101,075
Threshold period in which tickets can be booked in advance			12 months
Loyalty Program Liabilities
REVENUE
Total Contract Liabilities	20,311	22,124	$ 20,311	22,124	22,069	$ 22,892
Revenue recognized			4,816	3,892
Amazon Deferred Up-front Payment
REVENUE
Total Contract Liabilities	4,462		$ 4,462		5,240
Costs to fulfill contract with Amazon
REVENUE
Number of cargo aircraft \| aircraft			12
Maintenance expense	208	$ 101	$ 515	$ 101
Contract Assets	$ 2,995		2,995		$ 3,614
Passenger \| Air Traffic Liabilities
REVENUE
Revenue recognized			$ 89,044

REVENUE (Details) - Amazon Deferred Up-front Payment - USD ($) $ in Thousands		1 Months Ended	3 Months Ended		9 Months Ended
	Dec. 13, 2019	Dec. 31, 2019	Sep. 30, 2021	Sep. 30, 2020	Sep. 30, 2021	Sep. 30, 2020
REVENUE
Proceeds from startup costs		$ 10,300
Warrants vested	632,183
Fair value of warrants vested		$ 4,667
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2019-12-01
REVENUE
Amortization period		6 years
Other Liabilities
REVENUE
Remaining start up costs		$ 5,633
Cargo
REVENUE
Revenue recognized			$ 310	$ 146	$ 779	$ 184

Revenue - Loyalty Program (Details) - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2021	Sep. 30, 2020
Changes in the Loyalty Program Liabilities
Balance - January 1	$ 128,384
Balance - September 30	129,821
Loyalty Program Liabilities
Changes in the Loyalty Program Liabilities
Balance - January 1	22,069	$ 22,892
Loyalty Points Earned	3,058	3,124
Loyalty Points Redeemed	(4,816)	(3,892)
Balance - September 30	$ 20,311	$ 22,124
Loyalty points redemption period	2 years

EARNINGS PER SHARE - Computation of basic and diluted earnings (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended						9 Months Ended
	Sep. 30, 2021	Jun. 30, 2021	Mar. 31, 2021	Sep. 30, 2020	Jun. 30, 2020	Mar. 31, 2020	Sep. 30, 2021	Sep. 30, 2020
Numerator:
Net Income	$ 13,903	$ 51,753	$ 12,416	$ 2,927	$ (6,040)	$ 7,251	$ 78,072	$ 4,138
Denominator:
Weighted Average Common Shares Outstanding - Basic	57,355,104			46,805,950			54,368,231	46,805,950
Dilutive effect of Stock Options, RSUs and Warrants	4,357,274			1,544,993			4,331,760	1,544,993
Weighted Average Common Shares Outstanding - Diluted	61,712,378			48,350,943			58,699,991	48,350,943
Basic earnings per share	$ 0.24			$ 0.06			$ 1.44	$ 0.09
Diluted earnings per share	$ 0.23			$ 0.06			$ 1.33	$ 0.09

- Definition

The amount of net income (loss) for the period per each share of common stock or unit outstanding during the reporting period.

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+ Details

EARNINGS PER SHARE (Details) - $ / shares		9 Months Ended
EARNINGS PER SHARE (Details) - $ / shares	Jan. 30, 2020	Sep. 30, 2021	Sep. 30, 2020
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Warrants held	40,005,885
Exercise price	$ 0.0005
Performance-based stock options
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Outstanding shares		3,626,851	3,815,215
Percentage Of Stock Options Expected To Meet Performance Conditions		75.00%

AIRCRAFT - Aircraft fleet (Details) $ in Thousands	1 Months Ended					3 Months Ended		6 Months Ended	9 Months Ended
AIRCRAFT - Aircraft fleet (Details) $ in Thousands	Jul. 31, 2021 aircraft	Jun. 30, 2021 aircraft	Apr. 30, 2021 aircraft	Mar. 31, 2021 aircraft	Jan. 31, 2020 aircraft	Sep. 30, 2021 USD ($) aircraft	Sep. 30, 2020 USD ($) aircraft	Jun. 30, 2021 aircraft	Sep. 30, 2021 USD ($) aircraft	Sep. 30, 2020 USD ($) aircraft
AIRCRAFT - Owned and Leased
Balance at beginning of period					31			43	43	31
Additions									10	19
Removals									(6)	(9)
Balance at end of period						47	41		47	41
Number of aircrafts previously under operating leases			1	5					6
Owned
AIRCRAFT - Owned and Leased
Depreciation expense \| $						$ 8,603	$ 7,835		$ 25,085	$ 17,469
Finance leases
AIRCRAFT - Owned and Leased
Amortization expense \| $						$ 2,977	$ 2,478		$ 7,846	$ 10,917
Passenger
AIRCRAFT - Owned and Leased
Balance at beginning of period					31			31	31	31
Additions									10	9
Removals									(6)	(9)
Balance at end of period						35	31		35	31
Number of new aircrafts purchased										2
Number of aircrafts refinanced					3
Passenger \| Owned
AIRCRAFT - Owned and Leased
Balance at beginning of period					5			14	14	5
Additions									7	9
Balance at end of period						21	14		21	14
Number of aircrafts previously under operating leases									6	2
Number of aircrafts previously under finance leases	3	3								5
Passenger \| Finance leases
AIRCRAFT - Owned and Leased
Balance at beginning of period					10			5	5	10
Additions									3
Removals										(5)
Balance at end of period						8	5		8	5
Number of aircrafts under finance leases									3
Passenger \| Finance leases \| Minimum
AIRCRAFT - Owned and Leased
Lease term									12 months
Passenger \| Finance leases \| Maximum
AIRCRAFT - Owned and Leased
Lease term									18 months
Passenger \| Operating leases
AIRCRAFT - Owned and Leased
Balance at beginning of period					14			12	12	14
Removals									(6)	(2)
Balance at end of period						6	12		6	12
Passenger \| Seasonal leases
AIRCRAFT - Owned and Leased
Balance at beginning of period					2					2
Removals										(2)
Cargo \| Aircraft Operated for Amazon
AIRCRAFT - Owned and Leased
Balance at beginning of period								12	12
Additions										10
Balance at end of period						12	10		12	10
Boeing 737-800
AIRCRAFT - Owned and Leased
Balance at end of period						46			46
Boeing 737-700
AIRCRAFT - Owned and Leased
Balance at end of period						1			1
Delayed Draw Term Loan Facility
AIRCRAFT - Owned and Leased
Number of aircrafts previously under operating leases								6
Delayed Draw Term Loan Facility \| Passenger \| Owned
AIRCRAFT - Owned and Leased
Additions									6

AIRCRAFT - Depreciation, Amortization, and Rent Expense on Aircraft (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2021	Sep. 30, 2020	Sep. 30, 2021	Sep. 30, 2020
Property, Plant and Equipment [Line Items]
Aircraft Rent	$ 3,925	$ 6,410	$ 13,339	$ 23,376
Depreciation amortization and aircraft rent	15,505	16,723	46,270	51,762
Owned
Property, Plant and Equipment [Line Items]
Depreciation	8,603	7,835	25,085	17,469
Finance leases
Property, Plant and Equipment [Line Items]
Amortization	2,977	2,478	7,846	10,917
Operating leases
Property, Plant and Equipment [Line Items]
Aircraft Rent	$ 3,925	$ 6,410	$ 13,339	$ 23,376

AIRCRAFT - Aircraft Lease Payment Deferrals (Details) - USD ($) $ in Thousands	Sep. 30, 2021	Dec. 31, 2020
AIRCRAFT - Owned and Leased
Aircraft Lease Payment Deferrals	$ 0	$ 7,569
Finance leases
AIRCRAFT - Owned and Leased
Aircraft Lease Payment Deferrals		2,133
Operating leases
AIRCRAFT - Owned and Leased
Aircraft Lease Payment Deferrals		$ 5,436

AIRCRAFT - Aircraft Maintenance Deposits Contra-Assets (Details) $ in Thousands	1 Months Ended		3 Months Ended		9 Months Ended
	Apr. 30, 2021 aircraft	Mar. 31, 2021 aircraft	Sep. 30, 2021 USD ($)	Sep. 30, 2020 USD ($)	Sep. 30, 2021 USD ($) aircraft	Sep. 30, 2020 USD ($)	Dec. 31, 2020 USD ($)
AIRCRAFT - Owned and Leased
Number of aircrafts previously under operating leases \| aircraft	1	5			6
Aircraft maintenance deposits contra assets
AIRCRAFT - Owned and Leased
Remaining unamortized balance contra assets			$ 22,348		$ 22,348		$ 36,729
Reduction in contra assets					$ (14,381)
Number of aircrafts previously under operating leases \| aircraft					6
Contra assets as a reduction to maintenance expense			444	$ 864	$ 1,295	$ 1,192
Aircraft maintenance deposits contra assets \| Owned
AIRCRAFT - Owned and Leased
Reduction in contra assets					12,749
Over-market lease rates
AIRCRAFT - Owned and Leased
Remaining unamortized balance contra assets			10,904		10,904		16,501
Decrease in purchase of aircrafts previously leased					$ 3,765
Number of aircrafts previously under operating leases \| aircraft					6
Over market liabilities			15,815		$ 15,815		$ 37,409
Reduction in over-market maintenance reserve liabilities					(21,594)
Amortization of Over-market Liabilities			$ 1,618	$ 3,140	5,992	$ 10,970
Over-market lease rates \| Owned
AIRCRAFT - Owned and Leased
Reduction in over-market maintenance reserve liabilities					$ 17,435

DEBT - Lines of Credit (Details) $ in Thousands		1 Months Ended		3 Months Ended	6 Months Ended	9 Months Ended	12 Months Ended
DEBT - Lines of Credit (Details) $ in Thousands	Feb. 10, 2021 USD ($)	Apr. 30, 2021 aircraft	Mar. 31, 2021 aircraft	Mar. 31, 2022 USD ($)	Jun. 30, 2021 USD ($) aircraft	Sep. 30, 2021 USD ($) aircraft	Dec. 31, 2021 USD ($)
DEBT
Number of aircrafts previously under operating leases \| aircraft		1	5			6
Prior revolving credit agreement
DEBT
Maximum borrowing capacity	$ 25,000
Credit Facilities
DEBT
Term of debt	5 years
Minimum liquidity required to be maintained						$ 30,000
Credit Facilities \| Minimum
DEBT
Minimum EBITDAR required to be maintained						62,100
Credit Facilities \| Subsequent Event \| Minimum
DEBT
Minimum EBITDAR required to be maintained				$ 87,700			$ 78,100
Credit Facilities \| Base rate \| Minimum
DEBT
Margin (as a percent)	4.00%
Credit Facilities \| Base rate \| Maximum
DEBT
Margin (as a percent)	5.00%
Revolving Credit Facility
DEBT
Maximum borrowing capacity	$ 25,000
Commitment fee on unused facility (as a percent)	0.50%
Delayed Draw Term Loan Facility
DEBT
Maximum borrowing capacity	$ 90,000
Amount of draw					$ 80,500
Number of aircrafts previously under operating leases \| aircraft					6
Principal payment on debt					$ 1,006
Balance amount of payment						$ 78,488
Debt instrument fixed interest rate	6.00%

DEBT - Long-term Debt (Details) $ in Thousands			12 Months Ended
DEBT - Long-term Debt (Details) $ in Thousands	Mar. 24, 2021 USD ($)	Oct. 26, 2020 USD ($)	Dec. 31, 2020 USD ($) aircraft	Dec. 31, 2019 USD ($) aircraft	Sep. 30, 2021 USD ($)
DEBT
Carrying Amount					$ 286,820
Notes payable under the Company's 2019-1 EETC agreement
DEBT
Face amount			$ 248,587		248,587
Number of used aircrafts purchased or refinanced \| aircraft			13
Carrying Amount					$ 211,605
Number of aircraft serve as security for loan \| aircraft				13
Appraised value of aircraft purchased				$ 292,450
U. S. Department of the Treasury CARES Act Loan
DEBT
Face amount		$ 45,000
Repayment period prior to expiration date of loyalty program		6 months
Repayment of debt	$ 46,260
U. S. Department of the Treasury CARES Act Loan \| Adjusted LIBOR Rate
DEBT
Margin (as a percent)		6.50%

DEBT - Long-term Debt schedule (Details) - USD ($) $ in Thousands	Sep. 30, 2021	Dec. 31, 2020	Oct. 26, 2020
DEBT
Total Debt	$ 290,572	$ 285,801
Less: Unamortized debt issuance costs	(3,752)	(3,338)
Less: Current Maturities of Long-term Debt	(19,835)	(26,118)
Total Long-term Debt	266,985	256,345
Notes payable under the Company's 2019-1 EETC agreement
DEBT
Total Debt	211,605	227,347
Face amount	$ 248,587	$ 248,587
Weighted average interest rate	4.78%	4.78%
Notes payable under the Company's 2019-1 EETC agreement \| Minimum
DEBT
Interest Rate	4.13%	4.13%
Notes payable under the Company's 2019-1 EETC agreement \| Maximum
DEBT
Interest Rate	6.95%	6.95%
Delayed Draw Term Loan Facility
DEBT
Total Debt	$ 78,488
U. S. Department of the Treasury CARES Act Loan
DEBT
Total Debt		$ 45,419
Face amount			$ 45,000
Notes payable to Wilmington Trust Company
DEBT
Total Debt		$ 12,506
Interest Rate	8.45%	8.45%
Other Notes payable
DEBT
Total Debt	$ 479	$ 529
Interest Rate	5.00%	5.00%

DEBT - Future maturities of the outstanding Debt (Details) - USD ($) $ in Thousands	Sep. 30, 2021	Dec. 31, 2020
Debt Principal Payments
Remaining 2021	$ 9,641
2022	30,367
2023	42,358
2024	44,000
2025	49,087
Thereafter	115,119
Total	290,572	$ 285,801
Amortization of Debt Issuance Costs
Remaining 2021	(248)
2022	(956)
2023	(881)
2024	(758)
2025	(643)
Thereafter	(266)
Total	(3,752)	$ (3,338)
Debt, net
Remaining 2021	9,393
2022	29,411
2023	41,477
2024	43,242
2025	48,444
Thereafter	114,853
Net Debt	$ 286,820

DEBT - Measured at fair value (Details) - USD ($) $ in Thousands	Sep. 30, 2021	Dec. 31, 2020
DEBT
Carrying Amount	$ 290,572	$ 285,801
Fair Value	$ 283,641	$ 279,119

FUEL DERIVATIVES AND RISK MANAGEMENT (Details) - Fuel Derivative Contracts - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2021	Sep. 30, 2020	Sep. 30, 2021	Sep. 30, 2020
Changes in Derivative Assets (Liabilities)
Balance - January 1			$ (1,174)	$ 2,233
Non-cash Gains (Losses)			3,527	(15,766)
Contract Settlements			(2,105)	7,531
Balance - September 30	$ 248	$ (6,002)	248	(6,002)
Fuel Derivative Gains (Losses)
Non-cash Gains (Losses)	(72)	290	3,527	(15,766)
Cash Premiums Paid		(53)		(1,954)
Total Fuel Derivative Gains (Losses)	(72)	$ 237	3,527	$ (17,720)
Outstanding derivative contracts	0		0
Matured contracts not yet settled	$ 248		$ 248

FAIR VALUE MEASUREMENTS (Details) - Recurring - USD ($) $ in Thousands	Sep. 30, 2021	Dec. 31, 2020
FAIR VALUE MEASUREMENTS
Total Assets measured at fair value on a recurring basis	$ 248
Total Liabilities measured at fair value on a recurring basis		$ 1,174
Fuel Derivative Contracts
FAIR VALUE MEASUREMENTS
Total Assets measured at fair value on a recurring basis	248
Total Liabilities measured at fair value on a recurring basis		1,174
Level 2
FAIR VALUE MEASUREMENTS
Total Assets measured at fair value on a recurring basis	248
Total Liabilities measured at fair value on a recurring basis		1,174
Level 2 \| Fuel Derivative Contracts
FAIR VALUE MEASUREMENTS
Total Assets measured at fair value on a recurring basis	$ 248
Total Liabilities measured at fair value on a recurring basis		$ 1,174

INCOME TAXES (Details) - USD ($) $ in Thousands	3 Months Ended			6 Months Ended	9 Months Ended
INCOME TAXES (Details) - USD ($) $ in Thousands	Sep. 30, 2021	Jun. 30, 2021	Sep. 30, 2020	Jun. 30, 2021	Sep. 30, 2021	Sep. 30, 2020
Income Taxes
Effective tax rate	14.20%		24.00%		18.00%	26.20%
Percentage of cash savings					85.00%
Percentage of cash savings retained					15.00%
Non-current liability recognized	$ 115,200	$ 115,200		$ 115,200	$ 115,200
Decrease to the tax receivable agreement liability	(19,800)	(18,700)		(18,700)	(19,800)
Income tax receivable agreement liability	95,400	96,500		96,500	95,400
Reduction in liability	(1,100)
PSP3
Income Taxes
Grants awarded	$ 0	$ 34,547		$ 34,547	$ 71,587

SPECIAL ITEMS, NET - Schedule of special items, net (Details) - USD ($) $ in Thousands	3 Months Ended			9 Months Ended		12 Months Ended
	Sep. 30, 2021	Sep. 30, 2020	Jun. 30, 2020	Sep. 30, 2021	Sep. 30, 2020	Dec. 31, 2020
SPECIAL ITEMS, NET
CARES Act grant recognition	$ (68)	$ (30,796)	$ (31,516)	$ (71,587)	$ (62,312)
CARES Act employee retention credit	(68)	(2,069)		(848)	(2,069)	$ (2,328)
Aircraft lease buy-out expense				6,963
Other	3	13		16	48
Total Special Items, net	$ (65)	$ (32,852)		$ (65,456)	$ (64,333)

SPECIAL ITEMS, NET (Details) $ in Thousands	1 Months Ended		3 Months Ended				6 Months Ended	9 Months Ended		12 Months Ended
SPECIAL ITEMS, NET (Details) $ in Thousands	Apr. 30, 2021 aircraft	Mar. 31, 2021 aircraft	Sep. 30, 2021 USD ($)	Jun. 30, 2021 USD ($)	Sep. 30, 2020 USD ($)	Jun. 30, 2020 USD ($)	Jun. 30, 2021 USD ($)	Sep. 30, 2021 USD ($) aircraft	Sep. 30, 2020 USD ($)	Dec. 31, 2020 USD ($)
Unusual or Infrequent Item, or Both [Line Items]
Number of aircrafts previously under operating leases \| aircraft	1	5						6
Grants recognized			$ 68		$ 30,796	$ 31,516		$ 71,587	$ 62,312
PSP2
Unusual or Infrequent Item, or Both [Line Items]
Grants awarded							$ 37,040
Grants recognized							37,040			$ 62,312
PSP3
Unusual or Infrequent Item, or Both [Line Items]
Grants awarded			$ 0	$ 34,547			$ 34,547	$ 71,587

OPERATING SEGMENTS (Details) $ in Thousands	3 Months Ended		9 Months Ended
OPERATING SEGMENTS (Details) $ in Thousands	Sep. 30, 2021 USD ($)	Sep. 30, 2020 USD ($)	Sep. 30, 2021 USD ($) item segment	Sep. 30, 2020 USD ($)
OPERATING SEGMENTS
Number of operating segments \| segment			2
Number of internal passenger groups \| item			2
Operating Revenues	$ 173,663	$ 77,973	$ 450,464	$ 293,679
Non-Fuel Operating Expenses	115,079	88,869	329,115	266,821
Aircraft Fuel	36,647	13,139	90,631	69,377
Special Items, net	(65)	(32,852)	(65,456)	(64,333)
Total Operating Expenses	151,661	69,156	354,290	271,865
Operating Income (Loss)	22,002	8,817	96,174	21,814
Interest Income	28	26	52	340
Interest Expense	(6,286)	(5,157)	(19,487)	(16,215)
Other, net	456	164	18,505	(331)
Income before Income Tax	16,200	3,850	95,244	5,608
Passenger
OPERATING SEGMENTS
Operating Revenues	149,263	63,701	382,380	276,188
Non-Fuel Operating Expenses	99,279	76,377	278,843	249,423
Aircraft Fuel	36,556	13,139	90,468	69,377
Special Items, net	(65)	(25,534)	(47,055)	(53,646)
Total Operating Expenses	135,770	63,982	322,256	265,154
Operating Income (Loss)	13,493	(281)	60,124	11,034
Cargo
OPERATING SEGMENTS
Operating Revenues	24,400	14,272	68,084	17,491
Non-Fuel Operating Expenses	15,800	12,492	50,272	17,398
Aircraft Fuel	91		163
Special Items, net		(7,318)	(18,401)	(10,687)
Total Operating Expenses	15,891	5,174	32,034	6,711
Operating Income (Loss)	$ 8,509	$ 9,098	$ 36,050	$ 10,780