Low-cost carriers Allegiant Air and Sun Country Airlines have reached an agreement to merge, forming a new leisure-focused airline poised to enhance competition within the US market. The proposed merger, valued at approximately $1.5 billion, will combine the two companies’ strengths and expand their service offerings, although it remains subject to approval from US antitrust regulators.
January 11, 2026, marked the announcement of the cash and stock deal, where Allegiant will acquire Sun Country at an implied share price of $18.89. Each Sun Country shareholder is set to receive 0.1557 shares of Allegiant stock along with $4.10 in cash for each share owned. This transaction includes around $0.4 billion of Sun Country’s net debt, bringing the total value of the merger to $1.5 billion.
Expanding Reach and Operations
The merger aims to serve an estimated 22 million passengers and provide access to more domestic and international destinations, operating more than 650 routes across 195 cities. This includes expansion into regions such as Mexico, Central America, Canada, and the Caribbean. Together, the new entity would boast a fleet of nearly 200 aircraft, incorporating both Airbus and Boeing models. This diverse fleet will allow for optimized operational performance and financial returns.
According to data from ch-aviation, Allegiant currently operates 84 Airbus A320-200s, 31 Airbus A319s, and 16 Boeing 737 MAX jets, with an average fleet age of 12.3 years. Sun Country adds 65 Boeing 737-800s and three Boeing 737-900ERs, averaging 16.9 years, to the combined fleet. Allegiant also has plans to incorporate an additional 34 737 MAX aircraft, with options for 80 more.
Gregory C. Anderson, CEO of Allegiant, expressed optimism about the merger, stating, “Together, our complementary networks will expand our reach to more vacation destinations including international locations. With our combined strengths—operational excellence, consistent profitability, and strong balance sheets—we will create an even more resilient airline that delivers greater value to travelers.”
Regulatory Scrutiny and Future Prospects
Both Allegiant and Sun Country cater to cost-conscious leisure travelers, with the latter having a significant charter operation. Anderson highlighted the compatibility of their business models, emphasizing minimal route overlap, which could favorably influence the merger’s approval by the US Department of Justice (DOJ). The mid-sized nature of both airlines, in contrast to larger competitors like Spirit and JetBlue, further mitigates potential competitive concerns.
The merger aligns with broader trends in the airline industry as companies seek to consolidate and strengthen their positions against dominant players such as American Airlines, United Airlines, Delta Air Lines, and Southwest Airlines, which collectively control around 70% of the US domestic market. Allegiant anticipates generating approximately $140 million in annual synergies within three years post-merger, primarily through expanded offerings across a unified network.
Pending regulatory approval, Gregory C. Anderson is expected to lead the combined entity as CEO, while Sun Country CEO Jude Bricker, who previously served as Allegiant’s chief operating officer, will join Allegiant’s board. The boards of directors from both companies have unanimously endorsed the transaction, which is anticipated to close in the second half of 2026, pending a thorough review by the DOJ and other regulatory bodies.
