Discount airlines have struggled recently amid rising competition and higher costs.
- Allegiant is buying Sun Country in a cash-and-stock deal.
- After the merger, which would close in the second half of the year, they would serve 650 routes collectively with about 195 aircraft.
- Allegiant shareholders would own two-thirds of the combined company.
Allegiant Travel Co. is buying Sun Country Airlines Holdings, Inc. in a cash-and-stock deal valued at $1.5 billion, the companies announced on Sunday, a major consolidation of two low-cost airlines to better compete with larger carriers.
ALGT and SNCY tickers trended on Stocktwits and are expected to see sharp moves as trading kicks off in the new week.
According to the terms, Allegiant is acquiring Sun Country, including its debt of about $400 million, for $18.89 per share – a 20% premium over Sun Country’s Friday closing price. The offer comprises 0.1557 shares of Allegiant common stock and $4.10 in cash for each Sun Country share owned.
“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,” Allegiant CEO Gregory Anderson said in a statement.
What Does This Mean For Airlines Sector?
The merger comes as discount airlines have struggled amid rising competition, higher costs, and an increasing willingness among consumers to spend for more expensive seats and better services.
Spirit Airlines filed for bankruptcy last year, its second time, hit by an oversupply of flights on important routes and an engine problem that affected its jets. It earlier tried to sell itself to JetBlue Airways, but that plan was challenged by the Justice Department and blocked by a federal judge in 2024.
Meanwhile, the airline sector is only beginning to emerge from a brutal year, which saw widespread travel disruption due to aggressive U.S. trade policies, Federal budget cuts, and a government shutdown in the latter part of 2025.
Deal Details
Allegiant and Sun Country would together serve more than 650 routes collectively, with about 195 aircraft. Allegiant shareholders are expected to own about two-thirds of the combined company, with the remaining third owned by Sun Country shareholders.
The merged entity will be based in Las Vegas, home to Allegiant, while maintaining a “significant presence” in Minneapolis–St. Paul, where Sun Country is headquartered, the companies said in a joint statement. The airlines anticipate closing the deal in the second half of the year.
Past Performance
Allegiant took a big $240-million loss in 2024, but reported profits in the previous three years. Sun Country, a smaller carrier, has reported profits in each of the past few years. In 2025, ALGT declined 9.4%, while SNCY declined 1.3%.
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