Allegiant-Sun Country merger set to grow cargo business

Allegiant and Sun Country Airlines have entered into a definitive merger agreement under which Allegiant will acquire Sun Country in a cash-and-stock transaction valuing Sun Country at an implied $18.89 per share. 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 held.

The offer represents a premium of 19.8% to Sun Country’s closing share price of $15.77 on January 9, 2026, and an 18.8% premium based on its 30-day volume-weighted average price. The transaction values Sun Country at approximately $1.5 billion, including about $0.4 billion in net debt.

Following the completion of the deal, Allegiant and Sun Country shareholders will own approximately 67% and 33%, respectively, of the combined company on a fully diluted basis.

The merger will further enhance operational diversification, with Sun Country continuing as a major U.S. narrowbody freighter operator under its multi-year agreement with Amazon Prime Air.

In 2024, Sun Country Airlines signed an Amended and Restated Air Transport Services Agreement with Amazon, extending the contract through 2030, with options to further extend through 2037. As part of the agreement, Sun Country added up to eight Boeing 737-800 cargo aircraft to its fleet, increasing its cargo operations from 12 to 20 freighters.

According to the latest data from Planespotters.net, Sun Country is currently operating 16 Boeing 737 freighters for Amazon, while four aircraft are listed as parked or undergoing maintenance.

In December last year, Sun Country Airlines announced that it will open a new operational base at Cincinnati/Northern Kentucky International Airport, Hebron, KY (CVG) in early 2026. This strategic expansion supports the company’s increased cargo operations and future plans for growth of its scheduled passenger service network. This operational base will serve as a primary location where cargo aircraft are stationed, and local crews begin and end flight assignments. The airline said it will continue to use shared CVG facilities and will officially open the base on January 31, 2026.

The combination of Allegiant and Sun Country will create a leading leisure-focused U.S. 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. The combination of two financially strong leisure carriers in the U.S. will create benefits for customers, communities, employees, and partners by enhancing stability, expanding opportunities, and enabling continued investment and innovation, according to the official release.

Following the close of the transaction, Allegiant will remain the publicly listed parent company, and the combined organisation will operate under the Allegiant name. Until a single operating certificate is issued by the US Federal Aviation Administration (FAA), both airlines will continue to operate separately, with their respective operations, procedures, and safety protocols maintained.

Upon closing, Allegiant CEO Gregory C. Anderson will serve as Chief Executive Officer of the combined company, and Robert Neal will serve as President and Chief Financial Officer. Sun Country President and CEO Jude Bricker will join the Board of Directors, alongside two additional Sun Country Board members, expanding the size of the Allegiant board to 11. Maury Gallagher, Chairman of the Board of Allegiant, will serve as Chairman of the Board of the combined company. Jude Bricker will serve as an advisor to Anderson to help ensure a smooth and successful integration.

The combined company will be headquartered in Las Vegas and will maintain a significant presence in Minneapolis-St. Paul, where Sun Country is based.

“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 optimises for year-round utilisation 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 travellers, partners, team members, shareholders, and the communities we serve,” says Gregory C. Anderson, CEO, Allegiant.

Jude Bricker, President & CEO, Sun Country, says, “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 organisations, 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.”

Together, the combined airline will offer a significantly expanded and complementary network of more than 650 routes, 551 from Allegiant and 105 from Sun Country, linking Allegiant’s small and mid-sized markets with Sun Country’s larger city network, including enhanced connectivity from Minneapolis–St. Paul and expanded nonstop services to popular leisure destinations, while continuing to serve underserved U.S. markets and opening new international opportunities. The merger also strengthens international reach, giving Allegiant customers access to Sun Country’s established network across Mexico, Central America, Canada, and the Caribbean, with service to 18 international destinations.

Fleet optimisation will also be strengthened through the operation of both Airbus and Boeing aircraft, allowing the combined airline to deploy capacity where it delivers the greatest operational and financial returns, while leveraging Allegiant’s 737 MAX fleet and order book to improve fuel efficiency and capacity. At closing, the combined airline is expected to operate approximately 195 aircraft, with 30 on order and an additional 80 purchase options.

The combination of Allegiant and Sun Country brings together two profitable airlines with strong balance sheets and is expected to deliver immediate and sustained value to shareholders through enhanced financial strength and long-term growth potential. Allegiant expects to realise approximately $140 million in annual synergies within three years of closing, driven primarily by expanded customer choice across the combined network, along with cost savings and revenue benefits from scale efficiencies, fleet optimisation, and procurement. The transaction is expected to be accretive to earnings per share one year after closing, while strengthening long-term financial performance. The combined company is expected to maintain a disciplined capital structure, with Net Adjusted Debt to EBITDAR of less than 3.0x at closing, preserving balance sheet flexibility post-transaction.

The transaction has been unanimously approved by the boards of directors of both companies and is expected to close in the second half of 2026, subject to receipt of U.S. federal antitrust clearance and other required regulatory approvals, the approval of both companies’ shareholders and other customary closing conditions.