Two of America’s ultra-low-cost carriers are merging, but it’s not the two that have been in the news repeatedly. Instead, it’s Las Vegas-based Allegiant acquiring Minneapolis-based Sun Country.
The combined carriers, with almost 200 planes and 650 routes would make the merged operation, which will keep the Allegiant name, a little bigger than either Frontier or Spirit, the two that have been dancing around a merger for several years.
Sun Country, whose name describes its business plan, has a number of routes to Mexico and the Caribbean, a market that’s been an objective for years for Allegiant. Both carriers specialize in connecting mid-size markets in the U.S. with warm-weather leisure destinations.
The deal, reportedly worth about $1.5 billion, will put about 2/3 of the shares in the hands of current Allegiant stockholders with Sun Country stockholders getting the other third. Allegiant management will run the airline, with Sun Country’s CEO joining the board.
Federal approval of the deal is required, but is not expected to be a significant hurdle, as the two companies’ networks are complementary more than competitive and neither holds a significant share of U.S. airline business, with the top five airlines holding about 80% among them.
