Discontinuing Coverage

Research evidence excerpt

Discontinuing Coverage

TD Cowen Sun Country Airlines Holdings

Global Research May 14, 2026

VALUATION METHODOLOGY AND RISKS

Valuation Methodology

Airlines:

We generally use a combination of Enterprise Value to EBITDAR and P/Es to value the group.

We make investment recommendations on certain early stage, pre-revenue companies based

upon an assessment of their business model, technology, probability of market success,

and the potential market opportunity, balanced by an assessment of applicable risks. Such

companies may not be assigned a price target.

Investment Risks

Primary Airline Investment Risks:

■ Economic and Geopolitical Risk. Airlines are affected by worldwide economies, especially if

they have international operations.

■ Fuel Risk. Fuel represents ~30% of expenses and the companies have limited visibility into

price changes.

■ Liquidity. Airlines are capital intensive and there are times when the markets are capital

constrained, which affects their ability to finance aircraft purchases.

■ Credit card processing fees. Credit card companies often require airlines to maintain capital

reserves related to future air travel.

■ Seasonality. The airlines generally use cash in 1Q and 4Q and generate cash in 2Q and 3Q.

■ Fare Risk. Fares may not rise as fast as expenses putting pressure on margins.

■ Government Regulation. The industry is highly regulated and taxed.

■ Terrorist Attacks and the outbreak of diseases. The unpredictability of terrorist attacks and

disease outbreaks gives the airlines little margin of error.

■ Labor Risk Some airlines are having issues attracting qualified pilots and mechanics which

could limit their growth.

■ Insurance Costs. Hull insurance varies from year to year, but is generally affected by the

number of accidents in the previous year.