Allegiant Air and Sun Country Airlines have announced a merger agreement valued at approximately $1.5 billion, aiming to enhance competition in the leisure travel sector of the United States. The deal, comprising both cash and stock, is still pending approval from U.S. antitrust authorities, making it one of several recent merger attempts within the airline industry.
On January 11, 2026, Allegiant revealed its plans to acquire Sun Country in a transaction that will provide Sun Country shareholders with 0.1557 shares of Allegiant stock and $4.10 in cash for each share they own. This brings the total valuation of Sun Country to approximately $1.5 billion, factoring in $0.4 billion of net debt.
The merged entity is projected to serve 22 million passengers and operate over 650 routes across 195 cities, including destinations in Mexico, Central America, Canada, and the Caribbean. The combined fleet would consist of nearly 200 aircraft, including models from both Airbus and Boeing. This diverse fleet will allow the new airline to optimize operational efficiency and financial returns.
Gregory C. Anderson, CEO of Allegiant, expressed optimism about the merger’s potential benefits, stating, “Together, our complementary networks will expand our reach to more vacation destinations including international locations.” He emphasized the strengths of both airlines, highlighting their operational excellence and strong balance sheets.
Regulatory Scrutiny and Market Position
Both Allegiant, based in Las Vegas, and Sun Country, headquartered in Minneapolis, cater primarily to cost-conscious leisure travelers. The two companies claim that their business models are complementary, with limited route overlap, which may enhance the likelihood of receiving approval from the U.S. Department of Justice (DOJ).
The merger comes in a competitive landscape dominated by major airlines such as American Airlines, United Airlines, Delta Air Lines, and Southwest Airlines, which collectively account for about 70% of the U.S. domestic market. Allegiant and Sun Country focus on leisure travel rather than major hub dominance, positioning them favorably for regulatory scrutiny compared to larger, more dominant competitors.
In a statement, Allegiant noted that the merger will create significant benefits for customers by combining two financially strong leisure carriers. The projected synergies are anticipated to generate around $140 million annually within three years of closing the deal, largely from an expanded network offering.
Leadership and Future Outlook
If the merger receives the green light from regulators, Gregory C. Anderson will continue as CEO of the newly formed airline, while Sun Country’s CEO, Jude Bricker, will join Allegiant’s board. Both boards have unanimously approved the transaction, which is expected to close in the second half of 2026, pending federal antitrust review and other necessary regulatory approvals.
This potential merger reflects a broader trend in the airline industry as companies seek to enhance their competitive positions in an increasingly challenging market. The combination of Allegiant and Sun Country is poised to transform the U.S. leisure travel sector, offering a wider range of destinations and services for travelers while striving to maintain operational efficiency and profitability.
