Allegiant Closes $1.5 Billion Sun Country Deal as Fuel Costs Double Since February
Updated
Updated · CNBC · May 13
Allegiant Closes $1.5 Billion Sun Country Deal as Fuel Costs Double Since February
7 articles · Updated · CNBC · May 13
$1.5 billion in cash and stock, including debt, sealed Allegiant Travel's acquisition of Sun Country on Wednesday, creating a combined carrier serving about 175 cities across more than 650 routes.
Greg Anderson said the airlines will keep separate brands and booking portals for now while sticking to a margin-first model that trims flying on weak-demand days and adds seats only in peak periods.
That discipline comes as jet fuel has roughly doubled since U.S.-Israel attacks on Iran began in February, adding billions in industry costs and pushing airlines to raise fares.
Allegiant said demand from budget leisure travelers remains robust; its first-quarter profit rose 32% to $42.5 million, even as it plans to cut second-quarter capacity 6.5% and keep third-quarter capacity flat to slightly lower.
The deal closes weeks after Spirit Airlines shut down, underscoring how smaller low-cost carriers are trying to survive against four giants that control roughly 80% of the U.S. domestic market.
With Spirit gone and this merger approved, are budget travelers about to lose their low-fare options?
Is Allegiant’s 'surgical' flight model the key to surviving where other budget airlines have failed?
Can blending passenger travel with Amazon cargo flights create a truly crisis-proof airline?