By Alison Sider and Dean Seal

Allegiant Travel reached a roughly $1 billion deal to buy Sun Country Airlines as budget-focused U.S. airlines struggle with stiff competition from larger rivals.

The proposed deal would bring together two carriers that have primarily served price-sensitive domestic vacationers at a time when that business model has come under strain. Larger carriers such as United Airlines and Delta Air Lines have deployed their own barebones fares to lure bargain hunters while catering to faster-growing demand from well-heeled travelers willing to pay up for extras.

Allegiant and Sun Country have been able to steer clear of some of the turbulence that has plagued the low-cost end of the airline industry.

Minneapolis-based Sun Country has been bolstered by its charter business and cargo-shipping demand in its work flying for Amazon.com. And Allegiant has been adept at avoiding head-to-head competition with larger competitors by steering clear of crowded routes.

Write to Alison Sider at alison.sider@wsj.com and Dean Seal at dean.seal@wsj.com

(END) Dow Jones Newswires

January 11, 2026 16:27 ET (21:27 GMT)

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