Allegiant Set to Acquire Sun Country in a $1.5 Billion Agreement

Allegiant to Acquire Sun Country Airlines in $1.5 Billion Deal

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Allegiant Travel Company has announced plans to purchase Sun Country Airlines Holdings Inc. in a transaction valued at $1.5 billion, combining cash and stock. This move marks another step toward greater consolidation within the US airline sector as competition intensifies.

Under the agreement, Sun Country shareholders will receive 0.1557 Allegiant shares and $4.10 in cash for each Sun Country share they own. This offer represents a premium of approximately 20% over Sun Country’s closing price last Friday.

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The merged airline will operate over 650 routes, including service to 18 international destinations across Mexico, Canada, the Caribbean, and Central America. Allegiant’s strength in smaller and mid-sized markets will be combined with Sun Country’s focus on larger cities, with minimal route overlap.

This merger unites two budget airlines that primarily cater to cost-conscious US travelers seeking nonstop flights. As major carriers like United and Delta dominate the market, smaller airlines are joining forces to remain competitive.

Gregory C. Anderson, Allegiant’s CEO and the future head of the combined company, stated, “By joining our networks, we’ll be able to offer travelers more vacation options, including international destinations.”

Both Allegiant and Sun Country operate on a low-cost model, but they face mounting pressure as larger airlines attract customers with basic economy fares and more travelers opt for enhanced service experiences.

This transaction, which brings together the nation’s ninth and twelfth largest airlines, follows Alaska Air Group’s merger with Hawaiian Airlines in September 2024.

Further consolidation may be on the horizon. Frontier Group Holdings has renewed its efforts to acquire Spirit Aviation Holdings after Spirit filed for bankruptcy for the second time in a year. Spirit’s financial troubles followed a failed merger attempt with JetBlue Airways in 2024.

Currently, about 80% of the US airline market—excluding foreign carriers—is controlled by American Airlines, Delta, Southwest, and United.

Sun Country, established in 1982 and based in Minneapolis, primarily serves lower- and middle-income families and operates passenger, cargo, and charter flights. Once the deal is finalized in the second half of the year, pending regulatory approval, the Sun Country brand will be retired.

Allegiant’s Strategic Shift and Combined Fleet

Allegiant, headquartered in Las Vegas, has recently restructured to focus on its airline operations. In September, the company completed the sale of its troubled Sunseeker Resort in Florida, ending its attempt to branch into the hospitality sector.

Together, Allegiant and Sun Country will operate a fleet of approximately 195 Boeing and Airbus narrowbody aircraft, with additional planes on order or option.

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