Las Vegas-based Allegiant Air said Wednesday it has completed its purchase of Sun Country Airlines, closing a $1.5 billion deal that merges two low-cost carriers at a turbulent time for the budget airline industry. The transaction, first announced in January, received the necessary regulatory and shareholder approvals, according to Allegiant.
“Today marks a defining moment in Allegiant’s history as we officially join forces with Sun Country,” Allegiant CEO Gregory Anderson said in a statement, adding that the combined airline is positioned to offer broader access to affordable travel.
The merger comes as low-cost carriers grapple with a sharp rise in jet fuel costs driven by the war in the Middle East, a jump that is already showing up in higher fares across the industry. The pressure proved especially acute for Spirit Airlines, which shut down on May 2 after 34 years, its collapse accelerated by the fuel-cost surge following years of heavy debt and repeated restructuring efforts.
Allegiant and Sun Country say their tie-up gives them more ways to generate revenue. Along with passenger flights, Sun Country brings cargo flying for Amazon, as well as charter trips for sports teams, casinos, and the U.S. Department of Defense.
The expanded network is expected to give travelers more options, particularly in smaller and mid-sized markets, Allegiant said. The combined company will operate about 195 aircraft serving nearly 175 cities and more than 650 routes.
For now, travelers should not expect any changes. Both airlines will continue to operate separately, and customers can book, check in, and manage trips as they do today. Over the long term, the combined company is expected to operate under the Allegiant name and remain headquartered in Las Vegas, while Minneapolis–St. Paul, Sun Country’s base, will remain an important hub.