There’s more consolidation coming to the US airline industry, and I can’t say this merger is particularly surprising.
In this post:
Allegiant acquiring Sun Country in $1.1 billion deal
Allegiant Air and Sun Country Airlines have announced a definitive merger agreement, under which Allegiant will acquire Sun Country for $1.5 billion, including taking over $400 million of Sun Country’s net debt (so it’s a roughly $1.1 billion deal). Upon closing (which is expected in the second half of 2026), Allegiant and Sun Country shareholders will own approximately 67% and 33% of the new combined company, respectively.
This is a cash and stock transaction at an implied value of $18.89 per Sun Country share. Sun Country shareholders will receive 0.1557 shares of Allegiant common stock and $4.10 in cash for each Sun Country share owned, representing a premium of 19.8% over Sun Country’s closing share price of $15.77 on January 9, 2026, and 18.8% based on the 30-day volume-weighted average price.
The combination is described as creating a leisure focused airline, expanding service to more popular vacation destinations across the United States, as well as international destinations, and providing more people with access to affordable, convenient air travel.
For the time being, the two companies will continue to operate independently as before, until they’re on a single operating certificate. However, in the long run, the plan is for the Allegiant brand to survive, and the Sun Country brand to go away.
For those not familiar with the two carriers:
- Allegiant has a fleet of roughly 130 aircraft, including Airbus A320 and Boeing 737 family aircraft; the airline operates point-to-point leisure routes, primarily out of secondary airports
- Sun Country has a fleet of roughly 65 Boeing 737 aircraft (20 of which are cargo planes operated for Amazon Air), and the carrier’s passenger network is heavily centered around leisure routes from Minneapolis (MSP)
Here’s how Allegiant CEO Gregory Anderson describes this:
“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. We have long admired Sun Country for their well-run, flexible, and diversified business model that optimizes for year-round utilization and strong margins. Together, our complementary networks will expand our reach to more vacation destinations including international locations. With our combined strengths– including operational excellence, consistent profitability, strong balance sheets, and fleet ownership, we will create an even more resilient and agile airline that delivers greater value to travelers, partners, Team Members, shareholders, and the communities we serve.”
Meanwhile here’s how Sun Country CEO Jude Bricker describes this:
“Over Sun Country’s 43-year history, we have grown to become one of the nation’s most respected low-cost, leisure airlines with a unique business model for serving scheduled service and charter passengers as well as delivering cargo, with a strong brand and deep roots in Minnesota. Today marks an exciting next step in our history as we join Allegiant to create one of the leading leisure travel companies in the U.S. We are two customer-centric organizations, deeply committed to delivering affordable travel experiences without compromising on quality. Importantly, we believe this transaction delivers significant value to Sun Country shareholders and an opportunity to continue to benefit from our growth plans as a combined company.”
This seems like sensible airline consolidation
The US airline industry has of course seen a lot of consolidation over the years, and pickings are getting slim. Of the remaining airlines, I’d say a merger between Allegiant and Sun Country is about as logical and non-objectionable as any combination you could find, and it’s one that has been rumored for a very long time.
Even as the primarily domestic leisure airlines in the United States have mostly struggled, Allegiant and Sun Country have been the two exceptions, as they’ve been performing relatively well. That’s because they’ve both carved out niches, unlike carriers like Frontier, Spirit, etc., which simply try to poach passengers from the legacies, without sufficient competitive advantages.
There’s a lot of upside with this combination:
- Both companies are super innovative with their route networks, with Allegiant largely flying in markets where there’s no competition, and Sun Country being so heavily focused on Minneapolis
- There are of course synergies in combining two companies, and also more upside in terms of loyalty
- Given the heavy seasonality of Sun Country’s network, there’s value in better being able to allocate resources
- I don’t think the diversified fleet is much of an issue, given that Allegiant is currently transitioning from Airbus to Boeing aircraft anyway
I can’t imagine there will be any significant regulatory issues with this deal, since both carriers are ultra low cost and haven’t really competed. The only thing I’ll say is that a premium of under 20% isn’t exactly that much upside for Sun Country shareholders, compared to some past deals.
Admittedly it was an extreme example, but Alaska acquired Hawaiian for $18 per share, while Hawaiian’s stock was trading for under $5. I guess the idea is that the deal partly includes Allegiant stock, and if you assume Sun Country will perform well in the long run, then maybe Allegiant will as well.
As I see it, the only real potential downside is that labor costs could go up a bit, since combining workgroups almost always leads to more lucrative contracts, given the leverage that the unions have.
Bottom line
Allegiant will be acquiring Sun Country, as two of the country’s most successful leisure airlines seek synergies. This is a logical combination, especially since the airlines have virtually no overlapping routes. Allegiant is heavily focused on smaller airports without much other service, while Sun Country is heavily focused on Minneapolis, and other seasonal leisure routes, though largely to and from major airports.
What do you make of this merger between Allegiant and Sun Country?
Perhaps you should define what a leisure airline is and the type of hard and soft product they tend to feature
My partner and I flew Sun Country over the holidays Tampa to MSP RT and where impressed. For one thing Delta wanted 4 X the price... and we were going on the cheap for a change. The crews were excellent and in both MSP and returning to TPA our bags were on the belt before we got there ! WOW ! interesting because Allegiant is a (THE) big player at St. Petersburg / Clearwater Airport...
My partner and I flew Sun Country over the holidays Tampa to MSP RT and where impressed. For one thing Delta wanted 4 X the price... and we were going on the cheap for a change. The crews were excellent and in both MSP and returning to TPA our bags were on the belt before we got there ! WOW ! interesting because Allegiant is a (THE) big player at St. Petersburg / Clearwater Airport on this side of the Bay, and Sun Country serves TPA. I imagine the will stay at PIE, hopefully
As a complete outsider, it would appear that the U.S. airline industry’s market-driven philosophy has a marked indifference to consumer rights.
Any reduction in competition from smaller airlines can only reduce customer choice, allowing more dominant carriers to operate as they wish, to the long term detriment of the customer.
The so called “Big 3”, might well dominate in the U.S. however, they hardly compete on the world stage.
Aero, I realize you're in the UK, and more conservative than I, likely because of age, but, you probably already know that it's not just the airlines in the US... Our unlimited spending on lobbying and corporate propaganda encourages us and our elected representatives to repeatedly vote against self-interest, reject consumer and worker protections, and promote excessive profits for the already super-rich and wealthiest corporations.
They'll say things like 'let the free market decide'...
Aero, I realize you're in the UK, and more conservative than I, likely because of age, but, you probably already know that it's not just the airlines in the US... Our unlimited spending on lobbying and corporate propaganda encourages us and our elected representatives to repeatedly vote against self-interest, reject consumer and worker protections, and promote excessive profits for the already super-rich and wealthiest corporations.
They'll say things like 'let the free market decide' (while removing guardrails that prevent abuse), or 'lift yourself up by your bootstraps' (a meaningless phrase that describes how ridiculous 'rugged individualism' is in a modern society that needs a social safety net, universal healthcare, affordable housing, education, jobs.) Anyway, yeah, less competition is usually bad, and mergers like this only benefit entrenched players in the market (Delta will likely 'win' big in MSP because of Allegiant's intended retreat from there).
Finally, as always, I'll repeat that we really should have an UK/EU261 equivalent in the US by now. Anyhoo... enjoy your afternoon tea over there.
Oligopoly is a sign of a matured, independent and deregulated industry. As long as the US Airline Industry can keep around 3-4 big players, and 3-4 medium sized players, along with what ever niche players can prosper i feel the US Airline Industry will be just fine.
Additionally, AeroB13a think of this, a combined Allegiant and Sun Country have two ready and available training departments up and ready to go, so this conglomeration can react...
Oligopoly is a sign of a matured, independent and deregulated industry. As long as the US Airline Industry can keep around 3-4 big players, and 3-4 medium sized players, along with what ever niche players can prosper i feel the US Airline Industry will be just fine.
Additionally, AeroB13a think of this, a combined Allegiant and Sun Country have two ready and available training departments up and ready to go, so this conglomeration can react quickly and swiftly to market conditions should another big named carriers circumstances deteriorate further. Lean and nimble is the the golden ticket for the smaller carriers.
Makes sense but is kinda a shame. Suncountry was the last airline I can think of that operated with just one base being its home. The cool thing about the US airline market is it used to have a bunch of little airlines along with the big dogs
Interesting take on this merger. The point about minimal route overlap really stands out Allegiant’s secondary airports and Sun Country’s MSP focus make this consolidation feel practical rather than disruptive for travelers.
Most don't think much about either of these airlines, in-part because they're no frills, but also because they don't really do the status or credit card stuff. For the various blogs, there's limited or no 'commissions' (like, for credit card referrals), and it's not flashy like Etihad 'The Residence'. However, for budget travelers, or for odd routes, where these guys are the only nonstop, there's still an angle. That said, I can't find any flight...
Most don't think much about either of these airlines, in-part because they're no frills, but also because they don't really do the status or credit card stuff. For the various blogs, there's limited or no 'commissions' (like, for credit card referrals), and it's not flashy like Etihad 'The Residence'. However, for budget travelers, or for odd routes, where these guys are the only nonstop, there's still an angle. That said, I can't find any flight 'review' by Ben of either airline. Matt at LALF did one on Sun Country like a decade ago. Sheesh.
Now folks in Minnesota will have to pay exuberant amount to Delta to fly out of MSP. Already lost Spirit, Jut Blue. Sun Country was good a alternate to Delta at MSP.
Why are we assuming that MSP is instantly going to take a hit?
Yawn
*burp*
This merger makes sense for all the reasons Ben noted. Not sure why Allegiant needs to draw down MSP though. Sun Country has had the LCC/ULCC market to itself there forever and it works for them. I doubt Southwest or Frontier is suddenly going to come into the market in their current states.
I also think the big winner is Delta. Sun Country kept Delta fares in check and that’s likely going away as Allegiwnt inevitably redeploys/draws down MSP.
Win for the employees of Sun Country as it seems Minnesota is going to be dealing with an economy no longer federally subsidized to the level that maintains the status quo government in place there once all is said and done, and accountability and prosecutions are brought forward. This is a risk for SY which has just now been mitigated.
Now downsizing could still happen in MSP as Allegiant turns MSP into a Spoke...
Win for the employees of Sun Country as it seems Minnesota is going to be dealing with an economy no longer federally subsidized to the level that maintains the status quo government in place there once all is said and done, and accountability and prosecutions are brought forward. This is a risk for SY which has just now been mitigated.
Now downsizing could still happen in MSP as Allegiant turns MSP into a Spoke and remnant focus city, but there should at least be plenty of growth opportunities elsewhere as MN and the MN people are forced to recon with its immigrant fraud and governors budgetary hangovers until the train gets back on track.
Apparently timing was right to make the leap and go forward with this plan. Now it just awaits to see what direction Allegiant goes next from here.
It’s just an airline merger. Turn down the volume on your Fox ‘News’…
Even though we disagree politically, it is tiring when the original poster has to see everything through a partisan lens.
Your short sharp ‘sucker punch’ missed the mark with some readers 1990. You will need to elaborate to remain credible old bean.
Aero, happy to 'explain the joke' for you. See, in the States, we have this right-wing propaganda network, called Fox News (there are others, like Newsmax, OAN, etc.) Ironically, it's started and run by an Australian, Rupert Murdoch, you may recall, and he and his family own other media networks and newspapers, including some in the UK. I believe you have Sky (similarly sensationalist), or more recently GB New, over there (huge promoters of pro-Putin,...
Aero, happy to 'explain the joke' for you. See, in the States, we have this right-wing propaganda network, called Fox News (there are others, like Newsmax, OAN, etc.) Ironically, it's started and run by an Australian, Rupert Murdoch, you may recall, and he and his family own other media networks and newspapers, including some in the UK. I believe you have Sky (similarly sensationalist), or more recently GB New, over there (huge promoters of pro-Putin, anti-Europe propaganda, as well, it seems).
Anyway, it's a bit of meme (but also, very much, a real thing), that as when folks age, they raise the volume on their TVs (because, you know, hearing-loss). Anyway, the trope here is that aging bigots have Fox on 24/7 in the background on full-volume at nursing homes and this leads to a hate-filled cycle. Sort of like what OP KlimaBXsst was doing... tying this merger into whatever they heard recently on the TV, when, in reality, they are separate topics. Hope this helps. If not, please, enjoy your afternoon tea, regardless.
Jude Bricker, the CEO of Sun Country, used to be President of Allegiant. A merger of the only two profitable carriers in the ULCC space in the US.
Barry got Biffle'd outta Frontier... meanwhile, Bricker's buildin' a brick house (mighty-mighty, just lettin' it all hang out...)
Now we just need:
United to takeover jetBlue
Spirit and Frontier to merge
American to takeover Southwest
Hawaiian and Alaska already merged
Delta to elect Tim Dunn as CEO
and the US aviation space will reach a state of euphoria
your last line should read "Delta to take over Southwest"
and I am far too busy w/ non-commercial aviation to have time to run an airline.
When I grow up, I want to be a loser like Tim Dunn.
all you have to do is grow up.
You are already a loser.
Perfect way to put an ignoramus back in its box Tim. Thank you for today’s lesson.
American takes over SWA. Lol. Southwest still has an investment grade credit rating.
AA-WN is a non-starter without massive divestitures in places like Chicago and Dallas. Also, with AA the current largest carrier, they'd be hard-pressed to get past anti-trust (one would think).
As @Tim Dunn suggests, DL-WN makes more sense. There's much less overlap, with the expiation of ATL and LAX. As DL has proven before, they can pummel the snot out of anyone who tries to cut in too much (AirTran, WN, Frontier). They'll cede WN's...
AA-WN is a non-starter without massive divestitures in places like Chicago and Dallas. Also, with AA the current largest carrier, they'd be hard-pressed to get past anti-trust (one would think).
As @Tim Dunn suggests, DL-WN makes more sense. There's much less overlap, with the expiation of ATL and LAX. As DL has proven before, they can pummel the snot out of anyone who tries to cut in too much (AirTran, WN, Frontier). They'll cede WN's gates and just claw them back through market share shift over time. As for LAX, it'll never be a full-fledged hub like the east cost hubs so it's not that big of a deal to cede gates there.
Thoughts about the over/under on Breeze?
I suspect they will draw down MSP and use the equipment for added point to point leisure routes. DL will be a winner if so.
It's a shame Sun Country eliminated their First Class around 2018.
Why, 1990? Your short, sharp post lack substance and therefore credibility, yes?
Aero, I prefer 2-2 seat configurations as opposed to 3-3, but you do you. And, more airlines offering different classes of service means more competition. If Sun Country has a First Class, it competes with Delta's First Class, meaning, Delta may regulate its fares, etc. I'm looking to maximize both comfort and convenience at the best price, as one should.