Allegiant Air has announced a definitive agreement to acquire Sun Country Airlines in a transaction valued at approximately $1.5 billion, including debt, marking one of the most significant consolidations in the U.S. low-cost airline sector in recent years.
The deal, structured as a mix of cash and stock, reflects growing confidence in leisure travel demand and signals a strategic push to build scale in a competitive market.
Under the terms of the agreement, Sun Country shareholders will receive 0.1557 shares of Allegiant stock and $4.10 in cash for each Sun Country share. This values Sun Country stock at $18.89 per share, representing a premium of nearly 20 percent compared to its prior closing price. Once the transaction is completed, Allegiant shareholders will own approximately 67 percent of the combined company, with Sun Country shareholders holding the remaining 33 percent.
The combined airline will be headquartered in Las Vegas and operate a fleet of roughly 195 aircraft, with additional orders and options already in place. Together, the carriers are expected to serve around 22 million passengers annually across nearly 175 cities, significantly expanding access to leisure destinations throughout the United States and select international markets. Both airlines are known for serving underserved or secondary airports, a strategy that executives say will remain central to the merged company’s growth.
Allegiant leadership described the acquisition as a natural fit, highlighting Sun Country’s diversified business model and strong operational performance. Sun Country brings a mix of scheduled passenger service, charter flying, and cargo operations, including a growing presence in Amazon air cargo, which complements Allegiant’s ultra-low-cost, leisure-focused network.
Financially, the companies expect the merger to generate approximately $140 million in annual synergies by the third year after closing. These efficiencies are expected to come from network optimization, fleet utilization, combined loyalty programs, and cost savings across operations. The deal is projected to be accretive to earnings per share in the first year following completion.
Both companies’ boards have unanimously approved the transaction, which remains subject to regulatory review and customary closing conditions. The airlines expect the deal to close in the second half of 2026.
If approved, the merger would create one of the largest leisure-focused airlines in the U.S., positioning the combined carrier to compete more aggressively on price, destination breadth, and operational efficiency at a time when travelers continue to prioritize affordable vacation travel.
