In mid-January, Allegiant and Sun Country Airlines announced a definitive merger agreement under which Las Vegas-based Allegiant will acquire Minneapolis-based Sun Country in a cash-and-stock transaction at an implied value of $18.89 per Sun Country share. The transaction values Sun Country Airlines at approximately $1.5 billion, inclusive of $0.4 billion of Sun Country’s net debt.
The combination will create a leading leisure-focused U.S. airline, expanding service from Minneapolis-St. Paul International Airport and many other airports to more popular destinations across the U.S., as well as international destinations, and providing more people with access to affordable, convenient air travel. Merging two financially strong 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.
Gregory C. Anderson, Allegiant CEO, says in a prepared statement, “This combination is an exciting next chapter in Allegiant and Sun Country Airlines’ shared mission in providing affordable, reliable, and convenient service from underserved communities to premier leisure destinations. We have long admired Sun Country Airlines for their well-run, flexible, and diversified business model that optimizes for year-round utilization and strong margins. Together, our complementary networks will expand our reach to more destinations, including international locations.”
Jude Bricker, Sun Country Airlines president and CEO, says, “Over Sun Country Airlines’ 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. This merger 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 organizations deeply committed to delivering affordable travel experiences without compromising on quality.”
The transaction was unanimously approved by the boards of directors of both companies and is expected to close in the second half of this year, 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.
Both Allegiant and Sun Country Airlines built their businesses with a focus on connecting travelers to the places they love, with a commitment to value, convenience, and customer choice. The combined airline will offer:
- A complementary footprint, providing more destinations, more often: The combination brings together complementary route networks across Allegiant’s small- and medium-size localities and Sun Country Airlines’ larger cities and will provide more than 650 routes, including 551 Allegiant routes and 105 Sun Country Airlines routes. This combination will connect Minneapolis-St. Paul International Airport to Allegiant’s small- and medium-size markets and expand nonstop service to popular vacation spots, with a continued focus on underserved markets across the U.S. while expanding opportunities into international locations.
- Expanded international service: With access to Sun Country Airlines’ vast international network across Mexico, Central America, Canada, and the Caribbean, the combined airline will offer Allegiant customers access to expanded service from its small- and medium-size cities to 18 international destinations.
- Greater scheduling agility, improved reliability, and dynamic route planning: Integrated scheduling and fleet management will enhance on-time performance. The combined airline’s flexible capacity will match demand during peak leisure travel seasons and days of the week, while leveraging year-round charter and cargo operations to maximize profitability. By rapidly adjusting and expanding passenger and charter routes to support emerging vacation trends and expertly matching demand trends, the combined company will better service underserved markets and meet charter and cargo customer demands.
- An enhanced loyalty rewards program: Expanded frequent flyer and membership benefits, combining the best of both airlines’ programs. Adding Sun Country Airlines’ more than 2 million members to Allegiant’s 21 million members further enhances the relevance of the combined program, driving greater customer rewards.
Allegiant and Sun Country Airlines will work closely with employees and their unions—including pilots, flight attendants, mechanics, ground staff, and dispatchers—to ensure a smooth and transparent integration process. Existing collective bargaining agreements will remain in effect.
Following close, Allegiant will continue to be the publicly held parent company, and the combined company will continue under the Allegiant name. However, each airline will operate separately until the airline operations obtain a single operating certificate from the Federal Aviation Administration, issued after the integration of the airlines’ operations, procedures, and safety protocols into one framework. There will be no immediate impact to ticketing, flight schedules, and travel experience, or the Sun Country Airlines brand, and customers can continue to book and fly with Allegiant and with Sun Country Airlines as they do today.
Upon closing, Anderson, Allegiant’s CEO, will serve as CEO of the combined company, and Robert Neal will serve as president and CFO. Bricker, Sun Country Airlines president and CEO, will join the board of directors, alongside two additional Sun Country Airlines board members, expanding the size of the Allegiant board to 11. Maury Gallagher, chair of the board of Allegiant, will serve as chair of the board of the combined company. 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, where Sun Country Airlines is currently based.
