Allegiant to buy rival budget airline Sun Country for around $1.5 billion

By Mike Murphy

Allegiant largely connects small- to medium-sized cities to vacation destinations.

Budget air carriers Allegiant and Sun Country Airlines will merge, the companies said Sunday, the latest move toward consolidation in a heavily competitive industry.

Las Vegas-based Allegiant (ALGT) will acquire Sun Country (SNCY) in a roughly $1.5 billion deal, including debt, the airlines said in a joint statement. The $18.89 implied value per share of Sun Country is a nearly 20% premium over Friday's closing stock price of $15.77.

The airlines carry a combined 22 million passengers annually, and the companies said the deal will allow for more agility with scheduling, improved reliability and better on-time performance.

"The combination will create a leading leisure-focused U.S. airline, expanding service to more popular vacation destinations across the United States, as well as international destinations, and providing more people with access to affordable, convenient air travel," the companies said.

Customers should see no immediate changes, and each airline will continue to operate separately until the deal is closed. Allegiant CEO Gregory Anderson will lead the combined company. The deal is expected to close in the second half of 2026, and is subject to antitrust and regulatory approvals.

In recent years, Minneapolis-based Sun Country has boosted its bottom line by also operating cargo flights for Amazon.com (AMZN).

Airline stocks were volatile in 2025, hit by everything from President Donald Trump's tariffs to cash-strapped customers to the federal shutdown in the fall.

Airlines have faced rising expenses since the pandemic and have been focused on cutting costs, and some have looked to consolidate. Alaska Air Group (ALK) acquired Hawaiian Airlines for about $1 billion in 2024, but JetBlue's (JBLU) $3.8 billion purchase of Spirit Airlines was blocked in 2024 by federal regulators over concerns it would reduce competition. Frontier Airlines (ULCC) has also been rebuffed in its attempts over the years to buy Spirit, which has twice filed for bankruptcy protection.

Allegiant Travel Co. shares are up 11% year to date, but are down around 6% over the past 12 months. Shares of Sun Country Airlines Holdings Inc. are up nearly 10% this year, but are down fractionally over the past year.

-Mike Murphy

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01-11-26 1719ET