Key Takeaways:
Sun Country Airlines (NASDAQ: SNCY) stockholders gave preliminary approval for a $1.5 billion merger with Allegiant Travel Company, a critical step toward combining the two ultra-low-cost carriers.
The preliminary results from a special virtual meeting held May 8 showed that all three of the board's proposals passed, Rose Neale, Sun Country’s chief legal officer, said during the meeting. A quorum was present, with a majority of the company's outstanding capital stock represented.
According to the preliminary report, stockholders approved the merger agreement itself, an advisory proposal on executive compensation related to the deal, and a proposal to allow the board to adjourn the meeting if needed. Final voting results are expected to be filed with the SEC by May 14.
The shareholder vote clears a key hurdle for the transaction, which the U.S. Department of Transportation signed off on last month. The approval moves the carriers closer to creating a stronger competitor in the budget leisure travel market, though the next major step is securing a single Federal Aviation Administration (FAA) operating certificate, a process that could take 18 months or more.
Under the terms of the agreement dated Jan. 11, 2026, Sun Country will first merge into a subsidiary of Allegiant before a second merger step follows, ultimately making Sun Country a wholly owned, privately held subsidiary. With shareholder approval secured, executives have said the deal could close as soon as May 13.
Following the transaction’s close, Sun Country will continue to operate as a separate brand until Allegiant can obtain a single operating certificate from the FAA for the combined entity. This lengthy process means customers are unlikely to see any immediate changes to routes or service.
A key component of Sun Country's business that will continue is its cargo service for Amazon (NASDAQ: AMZN). Sun Country operates 20 Boeing 737-800 freighters on Amazon's behalf and is set to add two more by the end of June, bringing the fleet to 22. These cargo operations will remain on Sun Country’s operating certificate in the interim.
Amazon, which holds warrants to purchase Sun Country shares, will have those warrants fully vest upon the merger's consummation. The e-commerce giant will then receive Allegiant stock and cash as compensation, further linking the two companies.
While the shareholder and DOT approvals are significant milestones, the path to a fully integrated airline is still long. The 18-month or longer process to secure a single FAA certificate involves intensive reviews of maintenance programs, operational manuals, and safety procedures.
Furthermore, complex mergers can sometimes attract additional scrutiny from other regulatory bodies. While no specific challenge has been raised, the broader environment for mergers has seen increased antitrust attention. For example, the merger between Nexstar and Tegna was unexpectedly paused by a legal challenge from state attorneys general, putting the combined company into a state of "suspended animation," as one analyst described it. While the airline industry faces different rules, it highlights how regulatory pathways can be unpredictable, and a smooth closing is never guaranteed until all approvals are final.
This article is for informational purposes only and does not constitute investment advice.
