Allegiant wants to buy another budget carrier, Sun Country, for $1.5 billion

Two of the country’s ultra-low-cost airlines are planning to merge. Allegiant has offered to buy Sun Country for about $1.5 billion. In contrast with other budget domestic airlines, which have been struggling recently, both airlines are small and both are profitable.

These two airlines are made for each other. At least, if you ask Charles Duncan at private equity investment firm AltitudeX Aviation Group.

“They're both very nimble, very flexible, very focused on low cost, and leisure-oriented,” he said.

And unlike other budget airlines — namely Frontier and Spirit — they’re both doing well financially.

One reason for that?

“Particularly in Allegiant’s case, they like to fly in markets where they have no non-stop competition,” Duncan said.

Frontier and Spirit, meanwhile, fly more heavily-trafficked routes. Meghna Maharishi, airline reporter at the travel news website Skift, said they’ve been facing greater competition on those routes.

“We have seen airlines expand their Basic Economy offerings in recent years, and Basic Economy has proven to be pretty profitable as well for the Uniteds, Americans and Deltas,” she said.

Plus, she said, what travelers want has shifted in the last few years, in a way that also benefits legacy airlines.

“More and more consumers are opting for more premium products. They want to fly business class, or they want to fly first class,” Maharishi said.

Delta recently reported strong revenue for Q4 and all of 2025, much of it from premium offerings.

But Henry Harteveldt, airline industry analyst at Atmosphere Research Group, said plenty of people are still looking for cheap tickets. 

“One thing about Sun Country and Allegiant combining is that, because these two airlines do not compete directly on almost all of their routes, this could actually be a great way to expand the reach of much needed low-fare competition,” he said.

If the two merge and grow, he said it could give travelers more options.