Key Points

• Allegiant Air is acquiring Sun Country Airlines in a $1.5 billion cash and stock deal, creating America's fifth-largest low-cost carrier.
• The merger combines Allegiant's leisure-focused network with Sun Country's charter operations and Minneapolis hub, potentially expanding route options for budget travelers.
• Travelers should expect minimal immediate changes, but long-term impacts could include new routes, altered loyalty programs, and different pricing strategies across the combined network.

Introduction

The budget airline landscape just got a major shakeup. Allegiant Air announced plans to acquire rival Sun Country Airlines in a deal valued at $1.5 billion, combining two distinct players in the low-cost carrier space. For travelers who've built strategies around these airlines' unique route networks and pricing, this merger raises important questions about what comes next. Here's what you need to know about how this consolidation could affect your travel plans and points strategies.

What's Happening: The Deal Breakdown

Allegiant Air is purchasing Sun Country Airlines for approximately $1.5 billion in a combination of cash and stock. The transaction, which requires regulatory approval, would create the fifth-largest low-cost carrier in the United States by combining Allegiant's 129-aircraft fleet with Sun Country's 50 planes.

The deal brings together two airlines with notably different business models. Allegiant has built its reputation on connecting secondary airports to leisure destinations like Las Vegas, Florida, and Phoenix, typically flying just a few times per week on each route. Sun Country, based in Minneapolis, operates a more diverse business model that includes scheduled service, charter flights for sports teams and organizations, and cargo operations.

For passengers holding existing tickets on either airline, the transaction shouldn't affect your immediate travel plans. Both carriers will continue operating independently until the deal closes, which is expected to take 12-18 months pending regulatory review.

Why This Merger Matters for Travelers

Route Network Implications

The combination creates interesting possibilities for expanded service. Allegiant's strength lies in its point-to-point leisure routes from smaller cities, while Sun Country operates a more traditional hub-and-spoke model from Minneapolis-St. Paul. The merged entity could theoretically offer more connection options, though whether they'll maintain both business models remains unclear.

Current Allegiant flyers from cities like Punta Gorda, Florida or Sanford, California might eventually see access to Sun Country's Minneapolis hub and its connecting routes. Similarly, Sun Country's Minneapolis base could gain access to Allegiant's extensive network of secondary markets and vacation destinations.

Pricing and Competition Concerns

Airline consolidation typically reduces competition, which can lead to higher fares over time. This merger removes one competitor from markets where both airlines currently operate. Cities served by both carriers might see reduced frequency or higher prices as the competitive pressure eases.

However, both airlines compete primarily on leisure routes where ultra-low-cost carriers like Spirit and Frontier also operate. The continued presence of these competitors, along with Southwest's extensive domestic network, should maintain some downward pressure on prices in most markets.

What Happens to Loyalty Programs

Both airlines currently operate modest loyalty programs with different structures. Allegiant's myAllegiant Rewards offers points on flights and purchases through its hotel and car rental partners. Sun Country's Ufly Rewards program uses a revenue-based model where you earn points based on dollars spent.

The fate of these programs remains one of the biggest question marks in the merger. Historical airline mergers suggest several possible outcomes:

Immediate Impact: Both programs will likely continue operating separately until the merger closes. Keep earning and redeeming points as normal through at least the next 12-18 months.

Integration Options: The combined airline could merge both programs into a single loyalty structure, potentially offering status matches or points transfers between the two. Alternatively, they might maintain separate programs for different market segments.

Strategic Considerations: If you've been accumulating points in either program, consider booking any aspirational redemptions sooner rather than later. Program devaluations often accompany major airline mergers as the new entity optimizes its loyalty economics.

For travelers focused on maximizing airline miles and points, neither Allegiant nor Sun Country currently partners with major transferable points programs like Chase Ultimate Rewards or American Express Membership Rewards. This merger doesn't significantly impact those strategies, though it's worth monitoring whether the larger combined airline eventually pursues such partnerships.

Credit Card Implications

Neither Allegiant nor Sun Country currently offers co-branded credit cards with major issuers. This stands in contrast to larger carriers like American, Delta, United, and Southwest, which all maintain extensive credit card portfolios.

The merged airline's increased size could make it a more attractive partner for card issuers. A combined entity with nearly 180 aircraft and significant market presence might eventually launch a co-branded card program. However, such developments typically take years to materialize even after mergers close.

For now, travelers looking to maximize rewards on budget airline purchases should focus on cards offering strong everyday spending rewards or category bonuses on travel purchases. Cards like the Chase Sapphire Preferred or Capital One Venture X earn 2-3x points on all travel purchases, including budget airlines.

Practical Steps for Travelers

If You Have Upcoming Travel Booked

Your existing reservations remain valid regardless of when the merger closes. Both airlines will honor all tickets purchased before the transaction completes. Keep your confirmation numbers and check in as normal.

If you're concerned about schedule changes, consider booking refundable fares or purchasing travel insurance through your travel credit card benefits or a third-party provider.

If You're Planning Future Travel

Short Term (Next 12 Months): Continue booking with either airline based on price and schedule. The merger won't affect operations during the regulatory review period.

Medium Term (12-24 Months): Monitor for schedule changes and route adjustments as integration planning begins. Sign up for fare alerts on your most-traveled routes to catch any pricing fluctuations.

Long Term (24+ Months): Watch for potential new routes combining both networks. The merged entity might add service to destinations neither airline currently reaches.

If You Hold Loyalty Status or Points

Continue using both programs normally for now. Consider:

• Redeeming significant point balances for travel within the next year
• Achieving or maintaining elite status if you're close to thresholds
• Documenting your account history, including status and points balances

What Regulatory Approval Means

The U.S. Department of Transportation and Department of Justice will review this merger under antitrust laws. Recent regulatory scrutiny of airline consolidation has increased, as evidenced by the blocked JetBlue-Spirit merger attempt.

However, this deal faces different competitive dynamics. Allegiant and Sun Country operate in somewhat different market segments with limited route overlap. The combined entity would still be significantly smaller than the Big Four carriers (American, Delta, United, and Southwest).

The regulatory review typically takes 12-18 months, during which both airlines continue operating independently. Approval isn't guaranteed, though the deal structure and market positioning suggest reasonable odds of clearing regulatory hurdles.

Industry Context: Budget Airline Consolidation

This merger continues a long-term trend of airline consolidation in the U.S. market. Over the past two decades, dozens of carriers have merged or ceased operations, leaving the industry increasingly concentrated among a few large players.

For budget carriers specifically, the landscape has grown more competitive as legacy airlines have introduced basic economy fares to compete on price. Ultra-low-cost carriers like Spirit, Frontier, and Allegiant have responded by focusing on operational efficiency and ancillary revenue from baggage fees, seat selection, and other add-ons.

The Allegiant-Sun Country combination could provide more resources to compete with larger carriers while potentially offering expanded networks that budget travelers value.

FAQ

Will my Sun Country or Allegiant flight be cancelled because of this merger?

No. Both airlines will continue operating all scheduled flights during the regulatory review period, which typically lasts 12-18 months. Your existing bookings remain valid.

Can I transfer points between Allegiant and Sun Country loyalty programs now?

Not currently. The programs remain separate until the merger closes and the airlines complete any loyalty program integration, which could take 2-3 years after the deal is approved.

Should I book travel now or wait until after the merger?

For travel in the next 12-18 months, book based on current schedules and prices. Both airlines will honor bookings made before the merger closes. For longer-term planning, monitor for potential route additions after integration.

Will this merger create a new airline credit card?

Possibly, but not immediately. Neither airline currently offers co-branded cards. If the combined carrier launches a credit card program, it would likely happen 2-3 years after the merger closes.

Conclusion

The Allegiant-Sun Country merger represents a significant development in the budget airline space, potentially creating new travel opportunities while raising questions about competition and pricing. For travelers, the immediate impact is minimal—both airlines continue operating normally during the lengthy regulatory review process.

The smarter play for now is to monitor route networks for potential expansions, use existing loyalty programs strategically while they remain separate, and focus on travel credit cards that maximize rewards across all airlines. As this merger progresses through regulatory approval and eventual integration, staying informed about schedule changes and program updates will help you adapt your travel strategy to the new landscape.

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