Sun Country Airlines on Friday announced a substantial reduction in scheduled passenger operations for 2025. The airline has seen the environment for passenger flights worsen since winter’s end—the result of capacity growth of both Sun Country and its competitors, and a dialing back of travel demand from its value-driven customer. This comes after the record highs of the post-pandemic period.

“Our planes are full, but fares are down,” noted COO Dave Davis, in an investor call. The airline’s passenger capacity will grow by 10% in 2024.

Sun Country’s unique business model is predicated on “cross utilization,” shifting resources between scheduled service, charter flights, and dedicated flying for retail giant Amazon. The plans the airline announced Friday are predicated on a 60% increase in the number of 737 aircraft dedicated to Amazon next year (from 12 to 20), allowing a 62% increase in cargo flying next year. These dedicated freighter aircraft will be provided by Amazon but flown by Sun Country’s pilots at the expense of scheduled passenger flights.

The airline expects to decrease passenger flying by 10%–12% in next year’s second, third, and fourth quarters to accommodate the additional Amazon aircraft, which begin arriving in 2Q25. Cargo flying was far less profitable for the airline in FY23 than passenger, generating a negative 0.5% return versus 14%. But Davis said he expects cargo margins to be at least as strong as passenger business in the coming quarters. Davis did say the airline expects to offer a similar number of seats for sale as in 2024 in the airline’s peak Q1.

Sun Country, though with a different business model than so-called Ultra Low Cost Carriers (ULCCs) Allegiant, Frontier, and Spirit, nonetheless shares a customer demographic with them. The ULCC universe has been disrupted by the failed merger of JetBlue and Spirit, and a general unwillingness of those carriers to draw down capacity as demand levels off. Sun Country has thus seen the profitability of its passenger business decline and has chosen to reallocate resources to flying with better margins. (This flexibility is unique in the domestic airline industry.)

Sun Country has also extended its contract with Amazon through 2030 as part of the deal, which has been in the works for several months, said Davis. The airline did say it expects to resume passenger growth in 2026 (6%–8%), while also continuing to increase cargo flying by low double-digits.

The company first unveiled plans to carry cargo for Amazon back in 2019.