LAS VEGAS - Allegiant Air announced Wednesday that it has finalized its acquisition of Sun Country Airlines, merging two leading low-cost carriers during a volatile period for budget airlines. This comes shortly after rival Spirit Airlines ceased operations.

The Las Vegas-headquartered Allegiant confirmed the deal closed following necessary regulatory clearances and shareholder approvals. Initially revealed in January, the transaction was valued at approximately $1.5 billion, including assumed debt.

"This day represents a pivotal chapter in Allegiant's journey as we unite with Sun Country," stated Allegiant CEO Gregory Anderson. He emphasized that the combined entity is well-equipped to deliver expanded affordable travel opportunities to more passengers.

The merger unfolds against rising jet fuel prices fueled by the Middle East conflict, which are driving up fares and fees industry-wide. Budget carriers face particular strain, with slimmer margins to offset these escalating expenses.

Spirit Airlines felt this pressure intensely, shutting down on May 2 after 34 years. Its downfall was hastened by soaring fuel costs atop chronic issues like substantial debt, multiple restructurings, and persistent cash shortages.

In this environment, Allegiant and Sun Country highlight enhanced revenue streams from the partnership. Sun Country contributes cargo operations for Amazon, plus charter services for sports teams, casinos, and the U.S. Department of Defense.

The broadened network promises greater choices for passengers, particularly in smaller and mid-sized communities, backed by around 195 aircraft connecting nearly 175 cities via over 650 routes.

Travelers will see no immediate disruptions. Both airlines will run independently, allowing seamless booking, check-in, and trip management as usual.

Full integration will require time. Ultimately, the unified operation will carry the Allegiant brand, maintain its Las Vegas base, and introduce fresh routes and links across the enlarged system.

Sun Country's home base of Minneapolis-St. Paul will continue serving as a key hub for the airline.