Leisure Airline Consolidation: Allegiant to Buy Sun Country for $1.5B

Allegiant Travel Co. has entered into a definitive agreement to acquire Sun Country Airlines Holdings Inc. in a cash-and-stock transaction valued at about $1.5 billion, including $400 million in net debt.

The companies expect the transaction to close in the second half of 2026, subject to shareholder approval and regulatory and antitrust reviews.

Transaction structure and ownership

The offer values Sun Country at $18.89 per share, representing a 19.8 percent premium to the airline’s January 9 closing price.

Sun Country shareholders will receive $4.10 in cash and 0.1557 shares of Allegiant stock for each Sun Country share they own.

Following the merger, Allegiant shareholders will hold about 67 percent of the combined company. The new airline group will be headquartered in Las Vegas and led by Allegiant CEO Gregory Anderson.

Expanded leisure network

The combination creates a larger leisure-focused airline with more than 650 routes and service to 18 international destinations across Mexico and the Caribbean.

Sun Country’s Minneapolis Saint Paul base will be retained, preserving its role as a key hub for both passenger and cargo operations.

Amazon Air cargo operations

A critical element of the deal is the retention of Sun Country’s Amazon Air cargo contract. The agreement, first launched in 2019 and extended through 2030 with options through 2037 under a June 2024 amendment, covers the operation of up to 20 Amazon-owned Boeing 737-800BCF freighters under the Prime Air brand. Sun Country provides pilots, maintenance, insurance, and ground handling services.

The Amazon cargo business delivers a stable revenue stream that helped Sun Country survive the sharp drop in passenger demand during COVID by diversifying beyond leisure travel.

Keeping this contract after the acquisition gives Allegiant added revenue stability, potential fleet commonality benefits, and exposure to the fast-growing eCommerce logistics market.

In July 2025, Allegiant sold Sunseeker Resort Charlotte Harbor to Blackstone Real Estate for $200 million. CEO Gregory Anderson said they "plan to use the proceeds from the sale to repay debt and strengthen the balance sheet."

Photo by Steve Fisher on Unsplash