Allegiant Air has announced the completion of its acquisition of Sun Country Airlines, merging two low-cost carriers to form a larger budget airline. The deal, valued at approximately $1.5 billion including debt, was finalized after securing necessary regulatory and shareholder approvals.
A Defining Moment for Allegiant
Gregory Anderson, CEO of Allegiant, described the merger as a defining moment in the company's history. In a statement, he said that the combined airline is well-positioned to offer broader access to affordable travel. The merger comes at a turbulent time for the budget airline industry, following the recent shutdown of rival Spirit Airlines on May 2 after 34 years of operation.
Impact of Rising Fuel Costs
The industry is grappling with a sharp increase in jet fuel costs, driven by the war in the Middle East. This has led to higher fares and fees, particularly affecting low-cost airlines with limited capacity to absorb rising expenses. Spirit Airlines' collapse was accelerated by these fuel cost pressures, along with heavy debt and ongoing financial strain.
Benefits of the Merger
Allegiant and Sun Country believe their tie-up will create new revenue opportunities. Sun Country brings cargo operations for Amazon, as well as charter services for sports teams, casinos, and the U.S. Department of Defense. The expanded network will include approximately 195 aircraft serving nearly 175 cities and over 650 routes, offering travelers more options, especially in smaller and mid-sized markets.
For now, both airlines will continue to operate separately. Customers can still book, check in, and manage trips as usual. Over the long term, the combined company is expected to operate under the Allegiant name, headquartered in Las Vegas, while maintaining Minneapolis–St. Paul as a key hub for Sun Country operations.
