Allegiant Travel Company has entered into a definitive agreement to acquire rival budget airline Sun Country Airlines in a $1.5 billion all-stock transaction, marking a pivotal shift in the competitive landscape of low-cost U.S. air travel. The deal underscores ongoing consolidation within the consumer discretionary sector.
- Allegiant (ALGT) to acquire Sun Country (SNCY) in a $1.5 billion all-stock deal.
- Post-merger network to include over 100 destinations and 400 daily flights.
- Expected annual cost savings of $70 million within three years.
- Sun Country shareholders receive 0.85 ALGT shares per SNCY share.
- Deal subject to regulatory review by DOT and FAA.
- Potential for reduced competition on shared routes affecting pricing.
Allegiant Travel Company (ALGT) announced on January 11, 2026, that it has signed a definitive agreement to acquire Sun Country Airlines (SNCY) in an all-stock merger valued at approximately $1.5 billion. The transaction, subject to regulatory approval and customary closing conditions, reflects a strategic move by Allegiant to expand its network reach and strengthen its position in the domestic leisure travel market. The combined airline is expected to operate over 400 flights daily across more than 100 destinations, with a fleet comprising roughly 130 aircraft. Sun Country’s extensive route footprint—including key markets in the Midwest, West Coast, and international destinations such as Cancún and Punta Cana—complements Allegiant’s existing focus on nonstop service from secondary airports to popular vacation hubs. The acquisition is projected to generate significant cost synergies, including backend operational efficiencies and optimized fleet utilization, with management projecting annual savings of $70 million within three years post-closing. Shareholders of Sun Country will receive 0.85 shares of Allegiant common stock for each SNCY share held, representing a premium of approximately 22% based on pre-announcement trading levels. The merger could lead to reduced competition on overlapping routes, potentially affecting pricing dynamics and capacity allocation across regional markets. Investors, airlines, and travel industry stakeholders are closely monitoring how regulators, particularly the Department of Transportation and the Federal Aviation Administration, will assess the impact on market concentration and consumer choice.