Allegiant Travel Co. on Wednesday completed the $1.5 billion merger with Sun Country Airlines Holdings Inc., potentially creating a leisure airline superpower that will be based in Las Vegas.

Over the next several months, Allegiant and Sun Country will integrate their systems, employees and fleets and, within three years, expect to save $140 million annually through the merger, the combined airlines said.

Customers can continue to book travel through existing channels, and there are no changes to current reservations, flight schedules or travel plans. Both airlines will continue to operate as separate carriers in the near term, maintaining their respective brands. Customers should continue to manage reservations, check in and access customer service through the airline with which they booked travel.

Eventually, that will change, and customers of both airlines will see new benefits through their respective loyalty programs, according to Allegiant.

Allegiant Allways Rewards and Sun Country Rewards will remain separate in the near term, and members’ points, benefits and account status will retain their current value. Over time, Allegiant expects to introduce additional benefits that make it easier for customers to access the combined network.

“Today marks a defining moment in Allegiant’s history as we officially join forces with Sun Country to create the leading leisure-focused airline in the United States,” Allegiant CEO Gregory Anderson said in a release.

“With a combined fleet of 195 aircraft serving nearly 175 cities, we are expanding access to affordable, reliable and convenient travel for the communities that have long been the foundation of our business, while offering customers broader reach and more destinations. By bringing together two strong airlines with similar business models, we are creating a more differentiated and durable airline — one well positioned to deliver lasting value for our customers, team members and shareholders.”

There are no immediate changes to frontline roles and operational employees will continue in their current positions. The company will work closely with union representatives throughout the integration process and all existing collective bargaining agreements will remain in place, Allegiant said.

The merger was part of a flurry of reported airline news that peaked May 2 when Spirit Airlines discontinued operations. United Airlines CEO Scott Kirby said his company made a bid to buy American Airlines that would have formed the world’s largest airline, and JetBlue Airways has reportedly been shopping itself to suitors. Earlier in the year, regulators denied Frontier Airlines’ bid to acquire Spirit.

Details of the closing of the Allegiant deal came in a series of Securities and Exchange Commission filings Wednesday.

Officials with both airlines and aviation analysts have applauded the merger that brings together complementary route networks across Allegiant’s small and midsized localities and Sun Country’s larger cities providing more than 650 routes, including 551 Allegiant routes and 105 Sun Country routes. Between them, the two airlines have about 22 million passengers annually.

Minneapolis-centered

Sun Country, based in Minneapolis, uses Minneapolis-St. Paul International Airport as its primary transfer point to move passengers to multiple destinations across the United States, Mexico, Belize and Costa Rica. The airline has a strong leisure presence to the East Coast, Florida and several Caribbean destinations.

Allegiant officials say they value Sun Country’s deep roots in Minnesota and expect Minneapolis-St. Paul to remain an important operating center for the combined company. The combined company said it is committed to maintaining strong relationships with the communities, airports, customers and partners served by both airlines, while continuing to support the leisure-focused markets that have been central to each company’s success.

With Sun Country’s emphasis on leisure travel, it has strong cargo operations for Amazon Prime Air and charter contracts with casinos, Major League Soccer, collegiate sports team and the Department of Defense, which should complement Allegiant’s existing charter business and further diversify the combined company’s revenue base.

With 195 aircraft at closing, 30 aircraft on order and an additional 80 options, the combined company said it will have greater flexibility to optimize aircraft deployment, improve utilization and support long-term growth through economic cycles.

A Wednesday SEC filing disclosed that the Allegiant board of directors would expand from eight to 11 members with three representing Sun Country shareholder interests being added.

New board members will include Sun Country President, CEO and board member Jude Bricker, Sun Country board chairwoman Jennifer Vogel, and board member Thomas Kennedy.

The filing also disclosed that Bricker would serve as an independent contractor and provide advisory services relating to the integration of Sun Country into Allegiant, obtaining a single operating certificate for Allegiant and Sun Country, retention of charter and cargo customers and Sun Country business, continuity of Sun Country business relationships and consultation regarding the airline industry and the businesses of Allegiant and Sun Country.

Bricker will be paid $26,250 a month for the advisory services agreement in addition to compensation for serving the board of directors.

Bricker, 52, served as president and CEO of Sun Country since 2017 and has been a Sun Country director since 2018. He previously served as Allegiant’s chief operating 0fficer and held multiple leadership roles at Allegiant from 2006-2017, overseeing commercial, operational and financial functions — a detail Allegiant CEO Gregory Anderson said was key in securing the merger agreement. Earlier, Bricker served a finance manager at American Airlines.

Under terms of the deal, first announced in January, Allegiant would acquire Sun Country in a cash and stock transaction at an implied value of $18.89 per Sun Country share. Sun Country shareholders will receive 0.1557 shares of Allegiant common stock and $4.10 in cash for each Sun Country share owned, representing a premium of 19.8 percent over Sun Country’s closing share price of $15.77 when the deal was announced in January and 18.8 percent based on the 30-day volume-weighted average price. The transaction values Sun Country at $1.5 billion, including $400 million in Sun Country debt.

With the merger completed, Sun Country has been delisted as a publicly traded company. Allegiant Travel continues to trade on Nasdaq.

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