Two budget airlines have joined forces in a major shake-up of America's low-cost travel market, just days after rival Spirit Airlines dramatically went bust. Allegiant Air revealed on Wednesday it has completed its takeover of Sun Country Airlines, creating a far larger discount carrier aimed at bargain-hunting holidaymakers and travelers in smaller US cities.
Timing of the Deal
The blockbuster deal comes at a grim time for the budget airline industry after Spirit Airlines collapsed on May 2 following years of mounting financial problems and soaring jet fuel prices. Spirit's downfall sparked chaos for millions of passengers, leaving travelers scrambling for refunds, replacement flights and affordable ways to travel around the country.
Strategic Move
Now Las Vegas-based Allegiant is betting that swallowing up Sun Country will help it weather the storm as rising fuel costs and inflation squeeze no-frills airlines across America. When the merger was first unveiled in January, Allegiant valued the deal at roughly $1.5 billion, including debt.
'Today marks a defining moment in Allegiant's history as we officially join forces with Sun Country,' Allegiant CEO Gregory Anderson declared. He said the expanded airline would give customers greater access to low-cost flights across the US.
Expanded Operations
The newly combined company will operate around 195 aircraft, serving nearly 175 cities and more than 650 routes nationwide, according to Allegiant. The merger also dramatically expands the airline's reach in smaller and mid-sized markets, areas where both carriers already have a strong presence. Sun Country also brings several lucrative side businesses into the deal, including cargo flights for Amazon, charter services for sports teams and casinos, and contracts with the US Department of Defense.
Passenger Impact
Passengers are not expected to notice immediate changes. Allegiant said both airlines will continue operating separately for now, meaning customers can still book flights, check in and manage trips as usual. But over time, the enlarged carrier is expected to operate under the Allegiant brand while keeping its headquarters in Las Vegas. Meanwhile, Minneapolis-St. Paul, Sun Country's longtime home base, will remain a major hub for the airline moving forward.
Spirit's Collapse
Spirit Airlines had long been one of America's best-known ultra-low-cost carriers, famous for its rock-bottom fares and controversial extra fees for everything from carry-on bags to seat selection. Discussions had taken place with the Trump administration over a potential bailout package for the ailing airline. But the carrier had been struggling financially for years as higher fuel prices, rising labor costs and increased competition battered the budget travel sector. The carrier's problems worsened after a federal judge blocked its proposed merger with JetBlue in early 2024 over antitrust concerns, dealing a major blow to Spirit's survival plans. In the months leading up to its collapse, Spirit slashed routes, grounded aircraft and warned investors it could run out of cash. When the airline finally shut down on May 2, thousands of employees were left facing uncertainty while stranded passengers rushed to secure last-minute replacement flights.
