Allegiant Air and Sun Country Airlines have announced plans to merge in a deal valued at approximately $1.5 billion in cash and stock. This merger aims to create a more competitive, leisure-focused airline in the United States. The agreement, disclosed on January 11, 2026, is pending approval from the United States Department of Justice (DOJ), which will assess the merger’s implications for market competition.
The proposed transaction involves Allegiant acquiring Sun Country at an implied value of $18.89 per share. Sun Country shareholders are set to receive 0.1557 shares of Allegiant stock and $4.10 in cash for each share they own. The total deal value includes approximately $0.4 billion of Sun Country’s net debt, bringing the overall valuation to about $1.5 billion.
Strategic Benefits of the Merger
The merger is designed to enhance the combined airline’s ability to serve leisure travelers, expanding its reach to 22 million passengers and over 650 routes across 195 cities, including popular destinations in Mexico, Central America, Canada, and the Caribbean. The merged entity would boast a fleet of nearly 200 aircraft, comprising both Airbus and Boeing models. This diverse fleet will enable the new airline to operate more efficiently and capitalize on stronger financial returns.
According to Gregory C. Anderson, CEO of Allegiant, the merger will allow the airlines to combine their strengths and create a more resilient and agile company. He emphasized the complementary nature of their networks, stating, “Together, our complementary networks will expand our reach to more vacation destinations including international locations.”
Both Allegiant and Sun Country primarily target cost-conscious leisure travelers. Sun Country also operates a significant charter business, which further distinguishes its offerings. Allegiant’s CEO highlighted that the two carriers’ business models are complementary rather than duplicative, increasing the likelihood of DOJ approval. This is particularly relevant given the competitive landscape, as Allegiant and Sun Country are mid-sized players compared to larger airlines like American Airlines and Delta Air Lines, which control about 70% of the US domestic market.
Financial Projections and Future Leadership
The merger is projected to generate approximately $140 million in annual synergies within three years of closing. These synergies are expected to arise from the ability to provide customers with more options across a unified network. Both airlines have solid balance sheets, suggesting that the merger will create immediate and long-term value for shareholders.
Pending regulatory approval, Gregory C. Anderson will continue as CEO of the combined airline, while Jude Bricker, Sun Country’s CEO and a former chief operating officer at Allegiant, will join Allegiant’s board. The boards of directors for both companies have unanimously approved the merger, which is expected to finalize in the second half of 2026 following the necessary federal antitrust reviews and regulatory approvals.
As the airline industry continues to consolidate, this merger exemplifies efforts by smaller carriers to strengthen their positions against larger competitors. With the landscape constantly evolving, Allegiant and Sun Country’s collaboration could redefine leisure travel offerings in the US market.
