Las Vegas-based Allegiant Travel Co. (NASDAQ:ALFT) and Minneapolis-based Sun Country Airlines Holdings (NASDAQ:SNCY) announced Sunday that Allegiant has agreed to acquire Sun Country in an all-cash-and-stock transaction valued at approximately $1.5 billion, marking the latest move in a wave of consolidation among smaller U.S. carriers.
Under the terms, Sun Country shareholders will receive 0.1557 shares of Allegiant common stock and $4.10 in cash for each Sun Country share, representing a premium of about 20% to Sun Country’s closing price on Friday.
In premarket trading Monday, Sun Country shares surged as much as 18% to $18.54, while Allegiant stock traded little changed.
The combined airline will operate more than 650 routes, including 18 international destinations across Mexico, Canada, the Caribbean, and Central America.
The networks are described as highly complementary, with Allegiant’s focus on small- and mid-sized U.S. markets pairing well with Sun Country’s presence in larger cities and minimal route overlap.
Allegiant Chief Executive Officer Gregory C. Anderson, who will lead the enlarged company, stated that the combination will expand access to vacation destinations, including additional international options, while strengthening the carriers’ low-cost model targeting price-sensitive leisure travelers.
The deal reflects intensifying competitive pressures on second-tier U.S. carriers, as major airlines—American, Delta, Southwest, and United, which now control about 80% of the domestic market—continue to gain share through basic economy fares and fuller-service offerings.
The transaction follows Alaska Air Group’s September 2024 combination with Hawaiian Airlines and comes amid renewed merger talks between Frontier Group and financially troubled Spirit Airlines, which recently filed for its second bankruptcy in less than a year.
Sun Country, founded in 1982, primarily serves lower- and middle-income families with a mix of scheduled passenger, cargo, and charter operations.
Its brand will be phased out following the deal’s expected close in the second half of 2026, pending regulatory approval and other customary conditions.
The combined entity will operate a fleet of approximately 195 narrowbody Boeing and Airbus aircraft, with dozens more on order or option, providing enhanced scale and operational flexibility in the leisure travel segment.