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Las
Vegas-based Allegiant said the transaction closed after
receiving required regulatory and shareholder approvals. When
the deal was first announced in January, Allegiant said it was
valued at about $1.5 billion, including debt.
“Today marks a defining moment in Allegiant’s history as we
officially join forces with Sun Country,” Allegiant CEO Gregory
Anderson said in a statement, adding that the new combined
airline is positioned to offer broader access to affordable
travel.
The deal comes as both airlines and travelers are grappling with
a sharp run-up in jet fuel costs driven by the war in the Middle
East, a jump that is already showing up in higher fares and fees
across the industry. That increase is hitting low-cost airlines
especially hard, since they have less room to absorb rising
costs.
The pressure was especially acute for Spirit Airlines. The ultra
low-cost carrier shut down after 34 years May 2, its collapse
accelerated by the sharp rise in fuel costs following years of
financial strain, including heavy debt, repeated restructuring
efforts and ongoing cash-flow problems.
Against that backdrop, Allegiant and Sun Country say their
tie-up gives them more ways to generate revenue. Along with
passenger flights, Sun Country brings into the fold cargo flying
for Amazon, as well as charter trips for sports teams, casinos
and the U.S. Department of Defense,.
Allegiant says the expanded network is also expected to give
travelers more options, especially in smaller and mid-sized
markets, with about 195 aircraft serving nearly 175 cities and
more than 650 routes.
For now, travelers shouldn’t expect any changes. Both airlines
will continue to operate separately, and customers can keep
booking, checking in and managing trips just as they do today.
Allegiant said it will take time to bring the two airlines
together. Over the long term, the combined company is expected
to operate under the Allegiant name and remain headquartered in
Las Vegas, while adding new options and connections across its
broader network.
Minneapolis–St. Paul, where Sun Country is based, will remain an
important hub for the airline.
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