Wedoany.com Report on Feb 5th, Allegiant Air announced on Sunday that it will acquire Sun Country Airlines in a cash-and-stock deal valued at approximately $1.5 billion, including $400 million in debt, aiming to create North America's largest leisure-focused airline. The management of both companies stated that after learning of the merger discussions, Amazon committed to outsourcing an additional two cargo aircraft to Sun Country this year, indicating its intention to maintain the air logistics partnership.
According to the announcement, the combined company will meet peak travel season demand by increasing capacity while utilizing year-round charter and cargo operations to provide stable revenue. Sun Country currently operates 20 converted Boeing 737-800 freighters within Amazon's air logistics network, having started outsourced air cargo services in 2020 and receiving eight leased freighters transferred from Amazon last year.
Allegiant Air CEO Greg Anderson stated on an analyst conference call: "Cargo is crucial to Sun Country's business and is expected to continue growing post-merger. We have held multiple discussions with Amazon and are confident in the continuity of the partnership." Sun Country CEO Jude Bricker added that Amazon's commitment to adding two 737-800 freighters will expand the cargo fleet to 22 aircraft, with delivery expected in spring and entry into service in summer.
Transaction details reveal that Allegiant Air's offer represents a 19.8% premium to Sun Country's closing price on January 9. Shareholders of the two companies will hold approximately 67% and 33% of the combined entity, respectively. The company expects to achieve $140 million in annual cost savings through scale efficiencies. Post-merger, it is projected to serve about 22 million passengers annually, cover nearly 175 cities, operate over 650 routes, and maintain a fleet of approximately 195 aircraft.
Sun Country has been profitable for 13 consecutive quarters thanks to its diversified business model. For the quarter ended September 30, revenue reached $846 million with a net profit of $44.7 million. Cargo revenue grew 36% to $107 million in 2025, and management forecasts cargo revenue to exceed $215 million this fiscal year. Analysts believe the merger is strategically significant due to the companies' similar business models and complementary route networks.
Allegiant Air expects the transaction to close in the second half of 2026. If the deal fails to close by January 11, 2027, due to Allegiant Air's reasons, a $52 million termination fee is payable; Sun Country's termination fee is $33 million. This marks the second time in two years that Amazon has faced a partner airline being acquired, following Alaska Air's acquisition of Hawaiian Airlines in October 2024, which operated freighters on behalf of Amazon.
