LAS VEGAS (AP) — Allegiant Airways said Wednesday it has completed its acquisition of Sun Country Airlines, finalizing a deal to merge the two low-cost carriers at a turbulent time for the budget airline industry after the recent closure of rival Spirit Airlines.
Las Vegas-based Allegiant said the deal closed after receiving required regulatory and shareholder approvals. When the deal was first announced in January, Allegiant said it valued the deal at about $1.5 billion, including debt.
“Today is 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 newly combined airline aims to offer a broader range of affordable travel services.
The deal comes as airlines and travelers grapple with sharp increases in jet fuel costs caused by war in the Middle East, a rise that has been reflected in higher fares and fees across the industry. This growth has hit low-cost airlines particularly hard as they have less room to absorb rising costs.
For Spirit Airlines, the pressure is particularly acute. The ultra-low-cost carrier collapsed on May 2 after 34 years in business, accelerated by years of financial strain including heavy debt, repeated restructuring efforts and ongoing cash flow problems that led to sharply rising fuel costs.
Against this backdrop, Allegiant and Sun Country say their partnership provides them with additional ways to generate revenue. In addition to passenger flights, Sun Country provides cargo services to Amazon and charter flights to sports teams, casinos and the U.S. Department of Defense.
Allegiant said the expanded network is also expected to provide travelers with more choice, particularly in small and medium-sized markets, with approximately 195 aircraft serving nearly 175 cities and more than 650 routes.
At this time, travelers should not expect any changes. Both airlines will continue to operate independently and customers can continue to book, check-in and manage travel as they do now.
Allegiant said the merger of the two airlines will take time. In 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 within the broader network.
Minneapolis-St. Paul, where Sun Country is headquartered, will remain an important hub for the airline.