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Allegiant Air announced plans to acquire Sun Country Airlines in a cash-and-stock deal valued at approximately $1.5 billion, including debt, aiming to create a larger, more competitive leisure-focused airline.

The merger combines two low-cost US carriers that serve vacation destinations and smaller cities, offering more affordable travel options.

The combined airline will operate under the Allegiant name, with headquarters in Las Vegas, while maintaining a strong presence in Minneapolis–St. Paul, Sun Country's base.

According to AP News, the merged network is expected to cover about 175 cities with more than 650 routes and a fleet of roughly 195 aircraft.

"Allegiant and Sun Country have both shown that our leisure-focused, flexible capacity models are strong, thriving and consistently profitable, which gives me great confidence in the potential benefits of combining our organizations," Allegiant CEO Gregory Anderson said.

Sun Country CEO Jude Bricker, who previously served as Allegiant's chief operating officer, will join Allegiant's board of directors.

"I've had the privilege of working at both companies and can say that based on those experiences, this is a tremendous fit across the board," Bricker added.

Allegiant-Sun Country Merger Set to Expand

Travelers will not see immediate changes, as ticketing, flight schedules, and the Sun Country brand will remain the same for now.

Sun Country's charter and cargo operations will continue alongside Allegiant's leisure routes, and both airlines emphasized that the merger would expand options rather than disrupt service.

Allegiant approached Sun Country in late fall, and the deal still requires approval from regulators and Sun Country shareholders.

Analysts noted that the two carriers have almost no overlapping routes, which increases the likelihood of regulatory approval. The merger is expected to close in the second half of 2026.

The acquisition gives Allegiant a stronger foothold in the leisure travel market, which has faced rising costs and increased competition following the pandemic.

Deutsche Bank analysts projected operating margins of 9.3% for Allegiant and 11.7% for Sun Country this year, comparable to major airlines like Delta and United, CNBC reported.

Under the agreement, Allegiant shareholders would hold roughly 67% of the combined company, while Sun Country shareholders would own 33%.

Allegiant's offer includes a nearly 20% premium on Sun Country's closing stock price, valuing each share at $18.89.