Two U.S. Airlines Set to Merge in Major Air Travel Shakeup

Travelers looking for low-cost airfare options are set to see a big change this year thanks to the merger of two budget airlines. Las Vegas-based Allegiant Airlines announced on Sunday that it plans to acquire the Minnesota-based carrier Sun Country Airlines in a $1.5 billion deal. As The New York Times reports, Allegiant plans to pay for the deal with stock and cash.

“This combination is an exciting next chapter in Allegiant and Sun Country’s shared mission in providing affordable, reliable, and convenient service from underserved communities to premier leisure destinations,” said Allegiant Chief Executive Gregory C. Anderson in a press statement.

New Airline Will Be a Player Across the Country

Sun Country Airlines operates primarily out of Minneapolis-St. Paul International Airport, while Allegiant's major hubs include Las Vegas, Nevada; Myrtle Beach, South Carolina, and multiple cities in Florida. Together, the merger will create a much larger carrier, serving nearly 175 cities across the United States and adjacent countries. The majority of the routes Allegiant flies have no competition from another airline.

Low-Cost Airlines Are Struggling

The move comes as various budget airlines are facing financial issues. Spirit Airlines is teetering on the edge of bankruptcy after a proposed merger with JetBlue was blocked by regulators. These smaller carriers have faced increased competition from major airlines, which have introduced more restrictive Basic Economy tickets in a bid to claim more market share. Budget airlines largely cater to leisure travel, where customers are most price sensitive.

The deal is still subject to regulatory approval, a potential hurdle that has proven to be a tricky task to manage in the industry. The transaction is expected to be completed in the second quarter of 2026.