Allegiant to Acquire Sun Country in $1.5 Billion Deal, Reshaping U.S. Budget Airline Market

Allegiant Travel Company has announced a definitive agreement to acquire Sun Country Airlines in a cash-and-stock transaction valued at approximately $1.5 billion, including net debt. The deal marks one of the most significant consolidation moves in the U.S. low-cost airline sector in recent years and signals a strategic push to strengthen scale and competitiveness in leisure-focused air travel.

Under the agreement, Sun Country Airlines shareholders will receive a combination of cash and Allegiant shares for each share they own, representing a notable premium over Sun Country’s recent trading price. Once the transaction is completed, Allegiant shareholders are expected to hold a majority stake in the combined company, while Sun Country shareholders will own the remaining portion. The merger is targeted to close in the second half of 2026, subject to regulatory approvals and shareholder consent from both companies.

Executives from both airlines emphasized that the deal is designed to create long-term value rather than short-term cost-cutting. The combined company will continue to focus on affordable leisure travel while expanding its reach and operational flexibility.

Expanded Network and Operational Synergies

Following the merger, the combined airline is expected to operate nearly 200 aircraft and serve hundreds of routes across the United States, as well as popular vacation destinations in Mexico, Central America, Canada, and the Caribbean. The expanded network is aimed at improving connectivity between underserved cities and high-demand leisure markets, a core strength of both carriers.

Allegiant’s leadership highlighted that Sun Country Airlines‘ diversified business model, including scheduled passenger service, charter operations, and cargo flying, adds complementary capabilities to Allegiant’s point-to-point leisure strategy. Sun Country’s Minneapolis–St. Paul Hub will remain a key operational center, while Allegiant will continue to be headquartered in Las Vegas.

The companies estimate the merger will generate approximately $140 million in annual run-rate synergies within three years of closing. These efficiencies are expected to come from coordinated scheduling, fleet optimization, shared technology platforms, and stronger purchasing power. Importantly, the companies project that the transaction will be accretive to earnings per share within the first year after closing.

Regulatory Review and Industry Implications

The deal comes at a time when airline consolidation faces heightened regulatory scrutiny in the United States, following several high-profile merger challenges in the industry. Allegiant and Sun Country Airlines have stated that they plan to work closely with regulators to demonstrate that the combination will enhance competition, particularly by strengthening a leisure-focused alternative to larger network carriers.

Until a single operating certificate is approved by aviation regulators, both airlines will continue to operate independently under their existing brands. Leadership of the combined company will include executives from both organizations, with Allegiant’s current chief executive set to lead the merged airline and Sun Country Airlines’ top executive joining the board.

If approved, the merger could significantly alter the competitive dynamics of the U.S. budget airline market. By combining complementary networks and business models, Allegiant and Sun Country Airlines aim to create a more resilient carrier capable of weathering economic volatility while offering travelers more affordable options and expanded destination choices.

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