Allegiant agrees $1.5bn Sun Country deal

March 2026 | DEALFRONT | MERGERS & ACQUISITIONS

Financier Worldwide Magazine

March 2026 Issue

Allegiant Air has entered into an agreement to acquire fellow low cost carrier Sun Country Airlines in a transaction valued at approximately $1.5bn in cash and stock. The deal, announced on 11 January 2026, marks one of the most significant developments in the US leisure aviation sector in recent years and reflects the shifting competitive landscape as budget airlines respond to rising costs and evolving market conditions.

Under the terms of the agreement, Sun Country shareholders will receive 0.1557 Allegiant shares and $4.10 in cash for each share they hold. This values Sun Country stock at $18.89, which represents a premium of about 19.8 percent over its closing price of $15.77 on 9 January, the final trading day before the announcement. Once the transaction is completed, Allegiant shareholders will own around 67 percent of the combined business, with Sun Country shareholders owning roughly 33 percent.

Gregory Anderson, chief executive of Allegiant, will lead the merged airline, while Robert Neal will become president and chief financial officer. Jude Bricker, chief executive of Sun Country, will join the board of directors of the combined company. These leadership arrangements were confirmed by both airlines in their public statements.

“This combination is an exciting next chapter in Allegiant and Sun Country’s shared mission in providing affordable, reliable, and convenient service from underserved communities to premier leisure destinations,” said Mr Anderson. He added that the combined organisation would benefit from complementary networks, strong balance sheets and operational strengths. “We will create an even more resilient and agile airline that delivers greater value to travellers, partners, Team Members, shareholders, and the communities we serve.” Mr Bricker echoed these sentiments, describing the merger as a natural step in Sun Country’s development and emphasising the benefits for shareholders and customers.

The two airlines have stated that the merged carrier will serve approximately 22 million passengers per year and operate more than 650 routes across about 195 cities in the United States, Mexico, Central America, Canada and the Caribbean. Allegiant’s fleet currently consists largely of Airbus A319 and A320 aircraft, alongside Boeing 737 MAX jets, while Sun Country operates a fleet centred on Boeing 737 800 and 737 900ER aircraft. The combination is expected to allow both airlines to allocate aircraft more efficiently throughout the year, improving performance and supporting long-term growth.

Although the scale of the deal is considerable, the proposed merger faces mandatory regulatory scrutiny. The US Department of Justice has taken a more assertive stance toward airline consolidation, having blocked the proposed JetBlue-Spirit merger while approving the Alaska-Hawaiian transaction. However, analysts note that Allegiant and Sun Country have very limited overlap in their networks. Recent schedules show only one year-round overlapping route, between Appleton in Wisconsin and Fort Myers in Florida. This limited duplication may strengthen the airlines’ argument that the merger will not materially reduce competition.

Both carriers also focus on leisure travel, rely on point to point flying rather than hub-centred networks, and have mid-sized market positions compared with the largest US carriers. These factors are seen as potentially favourable during regulatory review. Industry observers have also noted that the merger has particular strategic significance during a period of financial strain for some budget airlines, heightening the importance of scale and operational resilience.

If approved, the transaction is expected to close in the second half of 2026. The combined company will be headquartered in Las Vegas, although Sun Country’s presence in Minneapolis will be maintained. The airlines project that the merger will generate substantial operational synergies within three years of completion.

Richard Summerfield