U.S. low-cost carriers Allegiant and Sun Country Airlines have announced a definitive merger agreement under which Allegiant will acquire Sun Country in a cash-and-stock transaction. The deal will create one of the leading leisure-focused airlines in the United States, serving around 22 million passengers annually, with a network spanning nearly 175 cities, more than 650 routes, and a combined fleet of approximately 195 aircraft.
Under the agreed terms, Sun Country shareholders will receive 0.1557 shares of Allegiant common stock and USD 4.10 in cash for each Sun Country share, implying a value of USD 18.89 per share. This represents a premium of nearly 20% compared with Sun Country’s closing share price prior to the announcement. The transaction values Sun Country at roughly USD 1.5 billion, including about USD 400 million of net debt. Upon completion, Allegiant shareholders will own approximately 67% of the combined company, with Sun Country shareholders holding the remaining 33%.
The merger brings together two airlines with highly similar, flexible business models focused on leisure travel. Management expects the combination to significantly expand customer choice and connectivity, particularly to popular vacation destinations across the United States, as well as to international markets. Allegiant will gain access to Sun Country’s international network serving Mexico, Central America, Canada, and the Caribbean, while Sun Country will benefit from stronger links to smaller and mid-sized U.S. markets where Allegiant has traditionally been strong.
The combined company also anticipates substantial operational and financial benefits. Annual synergies are expected to reach around USD 140 million within three years of closing, while the transaction is forecast to be accretive to earnings per share in the first full year following completion. Executives highlight strong margins, solid balance sheets, and a diversified revenue base as key pillars supporting long-term growth.
A central element of that diversification is Sun Country’s cargo operation, supported by a multi-year agreement with Amazon Prime Air, alongside charter flying for sports teams, casinos, and the U.S. Department of Defense. Together with Allegiant’s existing charter business, the enlarged group is expected to benefit from improved year-round aircraft and crew utilization, reducing exposure to seasonal demand swings.
Following completion, Allegiant will remain the publicly listed parent company, and the combined group will operate under the Allegiant name. Corporate headquarters will stay in Las Vegas, while Minneapolis–St. Paul will continue to play a major role as a key operational base. Both airlines will continue to operate separately until a single operating certificate is issued by the U.S. Federal Aviation Administration (FAA). In the meantime, customers should see no immediate changes to ticketing, schedules, or the Sun Country brand.
The transaction is expected to close in the second half of 2026, subject to regulatory and antitrust approvals and shareholder consent. Both companies’ leadership teams underline that the merger is intended to create a more agile, financially resilient airline group, strengthening competition in the U.S. leisure travel market while expanding opportunities for passengers, employees, and partners alike.
