Two low-cost airlines are merging in $1.5 billion deal

In a first of such deals since the start of the year, Las Vegas-based Allegiant Air announced plans to purchase rival Sun Country Airlines for $1.5 billion and form a single low-cost airline.

The deal is made up of both cash an d stock and takes on approximately $400 million of the Minneapolis-based Sun Country's debt. As part of the deal approved by the boards of both airlines, Sun Country shareholders will Sun Country's shareholders will receive $18.89 of each share that will in turn be made up of $4.10 in cash and a 0.1557 share in Allegiant stock.

Provided the transaction is approved by regulators, the merger will be completed by the end of 2026 and create a combined airline in which Sun Country shareholders hold 33% and Allegiant Travel shareholders have a 67% stake.

"We have long admired Sun Country": Allegiant CEO

Launched in 1997 as an early example of the low-cost model, Allegiant Air built out a market of serving cities with traffic too low for mainstream airlines. While its website states that it currently serves 117 destinations across the U.S., Allegiant recently pulled out of LAX airport last fall after cutting its last flights into the city from Cincinnati and Bellingham over what it classified as "long-term strategic goals" and "flexible business value."

Sun Country launched out of MSP in 1982 and ran a similar model of flying from smaller markets to various destinations in Florida, Mexico and the Caribbean as well as various routes between secondary cities on the U.S. mainland.

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"We have long admired Sun Country for their well-run, flexible, and diversified business model that optimizes for year-round utilization and strong margins," Allegiant CEO Gregory C. Anderson said in a statement. "Together, our complementary networks will expand our reach to more vacation destinations including international locations."

What else to know about the deal between Allegiant and Sun Country Airlines

While the deal comes as all low-cost airlines struggle with a market of high costs and competition for the same routes, Sun Country has been doing relatively well — in October 2025, it reported its third profitable quarter with revenue of $255.5 million.

Stocks of both airlines rose in pre-market trading upon the news of the merger on Sunday evening.

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Under the merger, Anderson will remain in his role as chief executive of the combined airline while Sun Country CEO Jude Bricker will join the board alongside two other members. The headquarters will also be moved to Las Vegas while maintaining Sun Country's presence and network out of the Twin Cities with a combined fleet of 195 airplanes.

"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," Bricker said in a statement. "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."

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