Allegiant to Acquire Sun Country Airlines in $1.5 Billion Deal

NEW YORK — Allegiant Air said Sunday it has agreed to acquire Sun Country Airlines for about $1.5 billion, a deal that would merge two low-cost carriers focused on leisure travel into a larger competitor to the nation’s biggest airlines.

Under the terms announced by the companies, Sun Country shareholders will receive the equivalent of $18.89 per share, a premium of about 20% over the stock’s closing price on Friday. After the transaction closes, Allegiant shareholders will own about 67% of the combined company and Sun Country shareholders about 33%.

Complementary Networks

The two airlines operate distinct business models that executives say fit together. Las Vegas-based Allegiant has built its network around nonstop flights from small and midsize cities to vacation destinations, often serving communities with limited air service. Sun Country, based in Minneapolis, operates from larger hubs and also runs charter and cargo flying, including freighter service for Amazon.

Combined, the carriers would serve about 22 million passengers a year across roughly 175 cities, with more than 650 routes and a fleet of about 195 aircraft, according to the announcement.

Taking On the Big Four

The four largest U.S. airlines, Delta, American, United and Southwest, together control roughly 70% of the domestic market, leaving smaller carriers to compete for the remaining share. Low-cost airlines have faced significant financial pressure in recent years from rising labor costs, aircraft delivery delays and engine problems that grounded portions of some fleets.

The deal is expected to close in the second half of 2026, subject to regulatory approval and shareholder votes.

Regulatory Hurdles

Airline consolidation has drawn heightened antitrust scrutiny in recent years. Federal regulators successfully challenged JetBlue Airways’ planned acquisition of Spirit Airlines in 2024, and a court separately ended a partnership between JetBlue and American Airlines in the Northeast. Analysts have noted that the limited overlap between Allegiant’s and Sun Country’s route maps could ease concerns about reduced competition.

The announcement comes as the broader budget segment continues to reshape itself. Several carriers have pursued mergers, restructurings or partnerships to gain scale, while major airlines have expanded their own basic-economy offerings to compete for price-sensitive travelers.

For consumers, the companies said a combined airline would offer more connections and destinations. Industry observers will be watching whether the merged carrier maintains the low fares that have defined both brands, and how it integrates two distinct fleets: Allegiant has historically flown Airbus jets and is adding Boeing 737 MAX aircraft, while Sun Country operates Boeing 737s.