An Allegiant Airlines jet flies out of Las Vegas Airport.
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Allegiant Travel said Sunday it is acquiring fellow leisure carrier Sun Country in a $1.5 billion cash and stock deal, including debt, a plan that comes as budget airlines in the U.S. have faced a surge in costs following the pandemic and an increase in domestic capacity.
“Our two complementary airlines will create the leading, more competitive, leisure-focused airline in the U.S.,” Allegiant CEO Greg Anderson said in an interview.
Smaller budget and leisure-focused airlines are dwarfed by larger competitors Delta Air Lines, American Airlines, United Airlines and Southwest Airlines, which together had a roughly 70% domestic market share in the U.S. in the 12 months ended Oct. 31, according to federal data.
Allegiant Travel Co, Sun Country Airlines and the NYSE Arca Airline index
Both Las Vegas-based Allegiant and Minneapolis-based Sun Country focus on cost-conscious budget travelers, while Sun Country also flies charters, as well as packages for Amazon, a business Anderson said was crucial to the deal. The airlines’ CEOs discussed their proposed combination with Amazon beforehand, he said.
The deal has an implied value of $18.89 for each Sun Country share, a premium of almost 20% over Sun Country’s closing stock price of $15.77 on Friday, Allegiant said.
Allegiant shareholders would own about 67% of the combined company and Sun Country’s shareholders would own around 33%, the airlines said. The deal includes $400 million of Sun Country’s net debt.
Sun Country and Allegiant each focus on vacationers, particularly to sun-and-beach and other leisure destinations.
The deal will test the Trump administration’s appetite for an airline merger.
Allegiant’s Anderson expressed confidence that the agreement would be approved, noting that the two carriers have little network overlap. The airlines expect the deal to close in the second half of this year.
Allegiant approached Sun Country in late fall, Anderson said. If the deal is approved by regulators, Anderson would become CEO of the combined airline. Sun Country CEO Jude Bricker, Allegiant’s former chief operating officer, would join Allegiant’s board.
The Biden administration challenged JetBlue Airways’ acquisition of Spirit Airlines, which is now in its second bankruptcy in less than a year and is fighting for survival. A federal judge sided with the Biden Justice Department and blocked the JetBlue-Spirit on antitrust grounds deal two years ago. The JetBlue deal had upended an earlier 2022 merger deal between Spirit and Frontier Airlines.
Spirit and Frontier leaders have engaged in repeated discussions over the following years, and airline analysts still point to their combination as a possibility.
The Biden administration, however, did clear Alaska Air’s nearly $2 billion acquisition of Hawaiian Airlines in 2024.
Allegiant and Sun Country executives will hold a special conference call on Monday at 8:30 a.m. ET to discuss their deal.
Source: https://www.cnbc.com/2026/01/11/allegiant-sun-country-deal.html
