LAS VEGAS (AP) — Allegiant Air said Wednesday it has completed its purchase of Sun Country Airlines, finalizing a deal that combines two low-cost carriers at a turbulent time for the budget airline industry following the recent shutdown of rival Spirit Airlines.
Las Vegas-based Allegiant said the transaction closed after receiving required regulatory and shareholder approvals. When the deal was first announced in January, Allegiant said it was valued at about $1.5 billion, including debt.
“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 new combined airline is positioned to offer broader access to affordable travel.
The deal comes as both airlines and travelers are grappling with a sharp run-up in jet fuel costs driven by the war in the Middle East, a jump that is already showing up in higher fares and fees across the industry. That increase is hitting low-cost airlines especially hard, since they have less room to absorb rising costs.
The pressure was especially acute for Spirit Airlines. The ultra low-cost carrier shut down after 34 years May 2, its collapse accelerated by the sharp rise in fuel costs following years of financial strain, including heavy debt, repeated restructuring efforts and ongoing cash-flow problems.
Against that backdrop, Allegiant and Sun Country say their tie-up gives them more ways to generate revenue. Along with passenger flights, Sun Country brings into the fold cargo flying for Amazon, as well as charter trips for sports teams, casinos and the U.S. Department of Defense,.
Allegiant says the expanded network is also expected to give travelers more options, especially in smaller and mid-sized markets, with about 195 aircraft serving nearly 175 cities and more than 650 routes.
For now, travelers shouldn’t expect any changes. Both airlines will continue to operate separately, and customers can keep booking, checking in and managing trips just as they do today.
Allegiant said it will take time to bring the two airlines together. Over the long term, the combined company is expected to operate under the Allegiant name and remain headquartered in Las Vegas, while adding new options and connections across its broader network.
Minneapolis–St. Paul, where Sun Country is based, will remain an important hub for the airline.
