In a major move poised to reshape the U.S. aviation industry, Allegiant Travel Company has announced its intent to acquire fellow low-cost carrier Sun Country Airlines in a cash-and-stock transaction valued at approximately $1.5 billion, including around $400 million in net debt. The deal marks one of the largest airline mergers in recent years and signals a strategic effort by both companies to expand their footprint in the highly competitive leisure travel sector.
The boards of directors of both Allegiant and Sun Country have approved the agreement, which is now pending review by federal regulators and the shareholders of Sun Country Airlines. The companies anticipate the transaction will close in the second half of 2026, assuming no regulatory hurdles stall the process. If completed, the deal would create a sizable carrier catering primarily to leisure travelers, with a combined passenger base expected to reach 22 million annually and a network encompassing more than 650 routes.
Under the terms of the agreement, shareholders of Sun Country will receive a mix of $4.10 in cash and a fraction of Allegiant common stock for each of their existing shares, which together represent a nearly 20 percent premium over Sun Country’s recent share price. Once finalized, current Allegiant shareholders will own roughly 67 percent of the combined entity, while Sun Country shareholders will hold about 33 percent, based on the fully diluted share count.
The merged company will retain the Allegiant name and remain headquartered in Las Vegas, Nevada. However, executives from both companies stressed their intent to preserve significant parts of Sun Country’s operational identity. That includes maintaining its long-established hub in Minneapolis–Saint Paul, where Sun Country has deep roots and a strong customer base. Furthermore, Sun Country’s diverse business model—which includes scheduled passenger service, charter operations, and cargo services—will remain a core part of the new company’s operations.
Allegiant’s CEO, Gregory C. Anderson, will take the helm of the combined airline, bringing continuity and a clear vision for how the merger fits into the broader trends in the travel industry. In a joint statement announcing the merger, Anderson emphasized the complementary strengths of both carriers and underscored the strategic value of their union. He described the deal as a “natural evolution” in the airlines’ shared mission to make travel affordable and accessible for Americans in underserved markets. Sun Country CEO Jude Bricker will join the board of directors of the merged company, contributing his experience in guiding the airline through periods of rapid growth and innovation.
Both Allegiant and Sun Country have built reputations as value-focused carriers, primarily targeting leisure travelers rather than business flyers. Allegiant has specialized in connecting small and mid-sized U.S. cities with popular domestic vacation destinations, often flying routes that are overlooked by the major network carriers. Its business model revolves around low base fares, unbundled services, and high aircraft utilization. Sun Country, on the other hand, operates a hybrid model that includes scheduled service, charter flights for clients like professional sports teams and casinos, and a growing cargo division anchored by a long-term agreement with Amazon.
Together, the airlines will boast a fleet of 180 to 195 aircraft, depending on future orders and retirements, and will serve nearly 175 cities. Their combined network is expected to offer travelers an expanded array of nonstop flight options, many of which will connect smaller U.S. markets with leisure destinations both domestic and international. Sun Country’s existing service to locations in Mexico, Central America, and the Caribbean will add an important international dimension to Allegiant’s traditionally domestic-focused route map.
From a financial perspective, the merger is designed to create economies of scale that allow the airlines to operate more efficiently and better withstand rising costs. The airline industry has faced increased pressure in recent years due to fuel price volatility, labor shortages, and shifting consumer expectations in the post-pandemic travel landscape. Analysts believe that combining operational infrastructures, fleets, and route networks could help the two carriers weather these challenges while enhancing service offerings and keeping fares competitive.
Still, the proposed merger will face scrutiny from the U.S. Department of Justice and Department of Transportation, especially in an environment where regulators have shown increased vigilance over airline consolidation. While Allegiant and Sun Country operate largely non-overlapping networks and cater to leisure markets, federal regulators will examine the deal’s potential effects on fare competition, consumer choice, and service to smaller airports. Public interest groups and some lawmakers may also voice concerns over whether further consolidation in the airline industry could limit options for passengers in the long term.
At the same time, the merger is occurring during a broader industry trend in which low-cost and ultra-low-cost carriers seek to solidify their market positions amid intensifying competition from larger legacy airlines. Other airlines in the budget segment have explored mergers or alliances in recent years, though not all have cleared regulatory hurdles. The failed attempt by JetBlue to acquire Spirit Airlines in 2023 remains a cautionary tale of how difficult it can be to secure government approval for airline consolidation, even when overlapping markets are minimal.
Nevertheless, Allegiant and Sun Country executives appear confident that the unique structure and focus of their merger—along with the lack of substantial route overlap—will increase the likelihood of regulatory approval. Both airlines emphasize that they will continue to operate independently in the near term. Customers can expect no immediate changes to their existing bookings, loyalty programs, or flight schedules until the deal officially closes and integration begins.
Once merged, the companies hope to become a dominant player in the U.S. leisure travel space, offering low fares and expanded route options to cost-conscious vacationers. If successful, this merger could set the stage for a new model of scaled-up, low-cost airline operations designed to thrive in a dynamic travel market.
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