Huge Merger in US Aviation: New Company Will Focus on the Leisure Flight Market

Massive aviation move in the United States. American airlines Allegiant and Sun Country Airlines announced the signing of a binding merger agreement, under which Allegiant will acquire Sun Country in a cash and stock transaction at an estimated value of $1.5 billion. The amount includes a net debt of approximately $400 million.

Under the merger, Sun Country shareholders will receive 0.1557 shares of Allegiant and $4.10 in cash for each share, a premium of approximately 19.8% over the closing price of the stock on the day of the announcement. Upon completion, Allegiant shareholders will own approximately 67% of the combined company, and Sun Country shareholders will own approximately 33%.

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The joint venture will operate as an airline focused on leisure flights, serving approximately 22 million passengers annually, with operations in approximately 175 cities, more than 650 routes, and a fleet of approximately 195 aircraft, along with future orders and options for fleet expansion.

The combined network is expected to offer broader connections between small and medium-sized cities in the US and major vacation destinations, as well as expanded international operations to destinations in Mexico, Central America, Canada, and the Caribbean.

The merger is also expected to strengthen the charter and cargo operations, including long-term contracts with commercial customers and institutional entities, including Sun Country's cargo operations for Amazon Prime Air. The companies estimate that within three years of the transaction's completion, they will create annual synergies of approximately $140 million, and that the transaction will be accretive to earnings per share in the first year after closing.

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The companies also say they do not expect any immediate change in terms of passenger experience, schedules, or brands, and that they will continue to operate separately until they receive a unified operating certificate from the US Federal Aviation Administration. The combined company will remain headquartered in Las Vegas, while pledging to maintain a significant presence in the Minneapolis-St. Paul area, which serves as Sun Country's main base.

The transaction has been approved by the boards of directors of both companies and is expected to close in the second half of 2026, subject to regulatory and shareholder approvals.