Allegiant Travel (NASDAQ:ALGT) executives and Sun Country leadership outlined plans for a definitive merger agreement under which Allegiant will acquire Sun Country in a cash-and-stock transaction, describing the deal as a combination of two “flexible capacity” airlines with complementary networks and revenue streams.
Allegiant CEO Greg Anderson said the implied value is $18.89 per Sun Country share, representing a 19.8% premium to Sun Country’s closing price of $15.77 on January 9. Anderson said the agreement values Sun Country at approximately $1.5 billion inclusive of $400 million of net debt. Allegiant President and CFO Robert Neal (referred to as “BJ” on the call) added that the transaction reflects a fully diluted equity value of $1.1 billion and is expected to close in the second half of 2026, subject to customary regulatory and shareholder approvals.
Strategic rationale: combining flexible leisure models
Sun Country President and CEO Jude Bricker—who began his career at Allegiant—said the transaction aligns with his view that Sun Country should pursue opportunities to become a stronger competitor and provide more customer choice. Bricker emphasized Sun Country’s multi-line business model spanning scheduled service, charter, and cargo, describing it as consistently profitable, high margin, and free-cash-flow generating. He noted Sun Country’s 13th consecutive profitable quarter in the most recent quarter discussed and said the carrier’s cargo partnership with Amazon has become an “increasingly important contributor” to revenue.
Deal terms, governance, and headquarters
Under the agreement, Sun Country shareholders will receive 0.1557 shares of Allegiant stock plus $4.10 in cash per share, based on the implied $18.89 total consideration as of January 9, 2026, executives said. Neal said Allegiant shareholders are expected to own about 67% of the combined company, with Sun Country shareholders owning approximately 33%.
The combined company will operate under the Allegiant name and remain headquartered in Las Vegas, while management committed to maintaining a significant presence in Minnesota and said Minneapolis–St. Paul (MSP) would be an important base of operations. Leadership plans include Greg Anderson continuing as CEO and Robert Neal continuing as president and CFO. Bricker is expected to join the combined company’s board and serve as an advisor to Anderson during the transition. Maury Gallagher is slated to serve as chairman. Neal said two additional members will be added to Allegiant’s board at closing, bringing the total to 11.
Synergies, growth plans, and financial expectations
Management said the combination is expected to generate $140 million in annual synergies on a run-rate basis, net of disynergies, approximately three years after closing. Neal said the largest driver is expected to be network and scheduling optimization, with additional drivers including expanded Midwest relevance, loyalty program benefits, and charter efficiencies. The company also cited potential upside beyond the $140 million estimate, including fleet and asset management flexibility, ancillary optimization, cargo efficiencies, international scale, and balance sheet benefits.
Neal said the deal is expected to be EPS accretive in the first full year post-closing, with accretion increasing as synergies are realized. He added that the company expects to maintain “strong liquidity and financial flexibility” through integration, with pro forma adjusted net debt to EBITDA of less than three times. When asked about disynergies embedded in the synergy estimate, Neal said they are “nearly all” labor-related and assumed to occur in the latter part of the three-year period, but he did not quantify them.
On fleet and growth, executives repeatedly highlighted Allegiant’s Boeing 737 MAX order book and Sun Country’s mid-life 737 fleet with no future fleet commitments. Drew Wells, Allegiant’s chief commercial officer, said a “prudent” growth rate for the combined company is likely in the 6%–8% range, compared with Allegiant’s historical 10% rate. Neal said 2026 is expected to be the peak year of capital expenditures related to Allegiant’s firm Boeing order, and he does not expect “meaningful changes” to the combined company’s pro forma CapEx profile based on current expectations.
Integration plans, labor, cargo, and MSP strategy
Anderson said the companies expect a post-close integration process of roughly 14 months on average for airlines, including efforts to reach a single operating certificate. He added that management expects some synergies to begin post-close even before a single certificate is achieved. On regulatory process milestones, Neal said the companies had not yet submitted a Hart-Scott-Rodino filing at the time of the call.
On labor, Anderson said Allegiant remains in mediation with its pilots, with timing dictated by the National Mediation Board. On integration risk, Anderson said the companies are establishing an integration office, naming Allegiant SVP Michael Broderick as chief integration officer and engaging BCG to help support planning. Management also noted both airlines use Navitaire as their passenger service system, which they said should ease some technology-integration risk.
Executives also highlighted the importance of Sun Country’s cargo operations in the combined business. Anderson said Allegiant and Sun Country leadership met with Amazon in Seattle and that Amazon had committed to add two more aircraft in 2026. Wells said those additions would take Sun Country’s cargo fleet to 22 aircraft “in the knowledge that this transaction is happening,” and he stated there were no other “material change of control considerations” beyond the Amazon agreement. Bricker also said Sun Country expects MSP to be a major strategic hub for the combined company, with additional flights connecting MSP to Allegiant’s mid-size markets.
Bricker and Wells separately described MSP as a key synergy opportunity, pointing to gate availability during periods when Sun Country’s operations leave the terminal underutilized. Wells said Allegiant’s broader basing strategy could help fill those midday lulls by turning aircraft into MSP at times when gates are available, which management framed as both a revenue and utilization benefit.
About Allegiant Travel (NASDAQ:ALGT)
Allegiant Travel Company is a holding company that operates Allegiant Air, a low‐cost leisure airline offering scheduled and charter air service. The company focuses on connecting underserved secondary markets with popular vacation destinations across the United States. By targeting price‐sensitive leisure travelers, Allegiant Air operates a point‐to‐point network that avoids the traditional hub‐and‐spoke model, providing non‐stop flights from smaller cities to resort and entertainment hubs.
In addition to its core flight operations, Allegiant Travel Company offers packaged travel services that include hotel accommodations, rental cars and attraction tickets through its online portal.
