ALGT 10-K & 10-Q changes, risk factors and insider trading

Risks Related to our Proposed Acquisition of Sun Country Airlines Holdings, Inc.

The proposed acquisition of Sun Country will involve substantial costs and the pendency of the proposed acquisition of Sun Country may cause disruption in our business.

The Merger Agreement requires us to operate in the ordinary course of business and restricts us from taking specified actions without Sun Country’s consent until the proposed acquisition of Sun Country occurs or the Merger Agreement terminates. Matters relating to the proposed acquisition of Sun Country are expected to occupy a significant amount of management’s time. The diversion of management’s attention away from day-to-day business concerns and any difficulties encountered in the transition and integration process could adversely affect our business, results of operations and financial condition.

In addition, we have incurred and will continue to incur significant costs, expenses and fees in connection with the proposed acquisition of Sun Country. The substantial majority of these costs will be non-recurring expenses relating to the proposed acquisition of Sun Country, some of which are payable regardless of whether or not the proposed acquisition of Sun Country is consummated. Litigation may be filed in connection with the proposed acquisition of Sun Country and defending any such litigation could prove costly and time consuming.

Shareholder litigation could prevent or delay the consummation of the proposed acquisition of Sun Country or otherwise negatively impact our business, operating results and financial condition.

Securities class action lawsuits and derivative lawsuits are often brought against public companies that have entered into acquisition, merger, or other business combination agreements. Even if such a lawsuit is without merit, defending against or settlement of these claims can result in substantial additional costs and diversion of management time and resources. Any such future lawsuit or litigation may adversely affect our ability to complete the proposed acquisition of Sun Country. We could incur significant costs in connection with any such litigation, including costs associated with an adverse judgment resulting in monetary damages and the indemnification of our directors and officers, which could have a negative impact on our liquidity and financial position.

Furthermore, one of the conditions to the consummation of the proposed acquisition of Sun Country is the absence of any governmental order or law preventing the consummation of the proposed acquisition of Sun Country or making the consummation of the proposed acquisition of Sun Country illegal. Consequently, if a plaintiff were to secure injunctive or other relief prohibiting, delaying or otherwise adversely affecting our ability to complete the consummation of the proposed acquisition of Sun Country, then such injunctive or other relief may prevent the proposed acquisition of Sun Country from becoming effective within the expected time frame or at all.

Failure to complete the proposed acquisition of Sun Country in a timely manner or at all could negatively impact the market price of our common stock, as well as our future business and our results of operations and financial condition.

Consummation of the proposed acquisition of Sun Country is subject to various customary conditions set forth in the Merger Agreement beyond our control. The failure to satisfy the required conditions could delay the completion of the proposed acquisition of Sun Country for a significant period of time or prevent it from occurring. Further, there can be no assurance that the conditions to the closing of the proposed acquisition of Sun Country will be satisfied or waived or that the proposed acquisition of Sun Country will be completed.

We cannot predict whether and when the conditions to the proposed acquisition of Sun Country will be satisfied. If one or more of these conditions are not satisfied, and as a result, we do not complete the proposed acquisition of Sun Country, we may remain liable for significant transaction costs, and the focus of our management would have been diverted from seeking other potential strategic opportunities, in each case without realizing any benefits of the proposed acquisition of Sun Country. The Merger Agreement includes customary termination rights in favor of each party. In certain circumstances, we may be required to pay Sun Country a termination fee of $52,230,000 or expense reimbursement of up to $11,000,000 in connection with the termination of the Merger Agreement. Any requirement to pay a termination fee to Sun Country may have an adverse effect on our liquidity and results of operations. Although Sun Country may be required to pay us a termination fee or expense reimbursement under certain circumstances, the receipt of any termination fee or expense reimbursement from Sun Country may not be sufficient to compensate us for all of the expenses incurred, and opportunities forgone as a result of our pursuit of the proposed acquisition of Sun Country.

In addition, our ongoing business may be adversely affected, including as follows:

•we may experience negative reactions from the financial markets, and our stock price could decline to the extent that the current market price reflects an assumption that the proposed acquisition of Sun Country will be completed;

•we may experience negative reactions from employees, passengers, suppliers, communities or other third parties;

•we may be subject to litigation, which could result in significant costs and expenses;

•management’s focus may be diverted from our day-to-day business operations and from pursuing other opportunities that could have been beneficial to us;

•our costs of pursuing the proposed acquisition of Sun Country may be higher than anticipated;

•we may have difficulties in attracting and/or retaining key employees; and

•our access to capital markets may be limited and we may experience increased borrowing costs.

If the proposed acquisition of Sun Country is not consummated, there can be no assurance that these risks will not materialize and will not materially adversely affect our stock price, business, results of operations or financial condition.

In order to complete the proposed acquisition of Sun Country, we and Sun Country must obtain certain regulatory approvals, and if such approvals are not granted or are granted with conditions, completion of the proposed acquisition of Sun Country may be jeopardized or the anticipated benefits of the proposed acquisition of Sun Country could be reduced.

Although we and Sun Country have agreed to use reasonable best efforts, subject to certain limitations, to make certain governmental filings and obtain the required regulatory approvals, there can be no assurance that the relevant approvals will be obtained (including through the expiration of applicable waiting periods).

Governmental authorities may also commence litigation against us, or both us and Sun Country, to prevent the proposed acquisition of Sun Country from occurring. Defending any such lawsuit will be time-consuming and expensive and there can be no assurance that we and Sun Country would ultimately be successful.

In addition, an actual or threatened U.S. government shutdown resulting in government agency closures and employee furloughs may impact, could delay or disrupt the ability of us and Sun Country to obtain certain regulatory approvals which could result in delays to regulatory waiting periods or prevent regulatory clearances required for the consummation of the proposed acquisition of Sun Country.

The Merger Agreement contains provisions that restrict our ability to consider alternative transaction proposals.

The Merger Agreement contains non-solicitation provisions that, subject to limited exceptions which apply prior to obtaining the requisite stockholder approval of the issuance of shares of our common stock, restrict our ability to solicit, initiate, or knowingly encourage or facilitate competing third-party proposals (or engage in, continue to participate in, knowingly encourage or knowingly facilitate negotiations or discussions regarding such third-party proposals) certain acquisition proposals. Under certain limited circumstances, our board of directors may (i) change, withhold, withdraw or modify its recommendation that our stockholders approve the issuance of shares of our common stock as set forth in the Merger Agreement and/or (ii) terminate the Merger Agreement to enter into a definitive agreement with respect to a third-party acquisition proposal. However, before doing so, our board of directors must abide by certain procedures described in the Merger Agreement that give Sun Country an opportunity to negotiate to modify the terms of the Merger Agreement in a manner that any such third-party acquisition proposal would not constitute a superior proposal. In some circumstances, upon termination of the Merger Agreement, we may be required to pay a termination fee of $52,230,000.

While the Merger Agreement remains in effect, these provisions might discourage a potential third-party acquiror or merger partner that might have an interest in acquiring all or a significant portion of our common stock or pursuing an alternative acquisition transaction from considering or proposing such a transaction, even if it were prepared to pay consideration with a higher per-share value than the per-share value proposed to be realized in the proposed acquisition of Sun Country.

If the Merger Agreement is terminated and we decide to seek another business combination, we may not be able to negotiate or consummate a transaction with another party on terms comparable to, or better than, the terms of the Merger Agreement.

All of the matters described above, alone or in combination, could materially and adversely affect our business, financial condition, results of operations and stock price.

The proposed acquisition of Sun Country may impair our ability to attract and retain qualified employees or retain and maintain relationships with our suppliers and other business partners.

Our employees and other key personnel may have uncertainties about the effect of the proposed acquisition of Sun Country, and these uncertainties may impact our ability to retain, recruit and hire key personnel while the proposed acquisition of Sun Country is pending or if it fails to close. Furthermore, if key personnel depart because of such uncertainties, or because they do not wish to remain with us after the consummation of the proposed acquisition of Sun Country, our business and results of operations may be adversely affected. In addition, we cannot predict how our suppliers and other business partners will view or react to the proposed acquisition of Sun Country upon consummation. If we are unable to reassure our suppliers and other business partners to continue their business with us, our financial condition and results of operations may be adversely affected.

After completion of the proposed Sun Country acquisition, we may not be able to successfully integrate the businesses and realize the anticipated benefits of the proposed acquisition of Sun Country.

The success of the proposed Sun Country acquisition will depend, in part, on our ability to successfully combine Sun Country, which currently operates as an independent public company, with our business and realize the anticipated benefits, including synergies and operational efficiencies, from the acquisition of Sun Country. If we are unable to achieve these objectives within the anticipated time frame, or at all, the anticipated benefits may not be realized fully, or at all, or may take longer to realize than expected and the value of our common stock may be harmed.

The proposed acquisition of Sun Country involves the integration of Sun Country’s business with our existing business, which is a complex, costly, and time-consuming process. Neither we nor Sun Country have previously completed a transaction comparable in size or scope to the proposed acquisition of Sun Country. The integration of the two companies may result in material challenges, including, without limitation:

•the diversion of management’s attention from ongoing business concerns and performance shortfalls at one or both of the companies as a result of the devotion of management’s attention to the proposed acquisition of Sun Country;

•managing a larger company;

•creating, implementing, and executing a unified business strategy, and operational, financial, and managerial control with respect to the combined entity;

•the inherent risk of integrating complex systems and technologies, including customer reservations systems, operating procedures, regulatory compliance programs, aircraft fleets, networks and other assets in a manner that minimizes any adverse impact on customers, suppliers, employees and other constituencies;

•maintaining existing agreements with unions, employees, suppliers, third-party service providers and third-party distribution channels, and avoiding delays in entering into new agreements with prospective employees, suppliers, third-party service providers and third-party distribution channels;

•maintaining employee morale and attracting, motivating, and retaining management personnel and other key employees;

•the possibility of faulty assumptions underlying expectations regarding the integration process;

•retaining existing business with charter and cargo partners and operational relationships and attracting new business and operational relationships;

•issues in integrating information technology, operational, safety, communications and other systems;

•consolidating corporate and administrative infrastructures and eliminating duplicative operations and inconsistencies in standards, controls, procedures, and policies;

•coordinating geographically separate organizations;

•unanticipated changes in federal or state laws or regulations or international agreements, including additional regulatory scrutiny or additional regulatory requirements as a result of the transaction or the size, scope, and complexity of our business operations; and

•unforeseen expenses or delays associated with the proposed acquisition of Sun Country.

Many of these factors will be outside of our control and any one of them could result in delays, increased costs, decreases in the amount of expected revenues, and diversion of management’s time and energy, which could materially affect our financial position, results of operations, and cash flows.

We and Sun Country have operated, and until the closing of the proposed acquisition of Sun Country will continue to operate, independently. We and Sun Country are currently permitted to conduct only limited planning for the integration of the two companies following the proposed acquisition of Sun Country and have not yet determined the exact nature of how the businesses and operations of the two companies will be combined after the proposed acquisition of Sun Country. The actual integration may result in additional and unforeseen expenses, and the anticipated benefits of the integration plan may not be realized.

After the closing, we plan to submit to the FAA a transition plan for merging the day-to-day operations of Allegiant and Sun Country under a single operating certificate. The issuance of a single operating certificate will occur when the FAA agrees that we have achieved a level of integration that can be safely managed under one certificate as evidenced by there being one set of FAA-required management personnel in place with such managers having operational control of the merged air carrier operations. The actual time required and cost incurred to receive this approval cannot be predicted. Any delay in the grant of such approval or increase in costs beyond those presently expected could have a material adverse effect on the completion date of our integration plan and receipt of the benefits expected from that plan. All of these factors could materially adversely affect our business, results of operations and financial condition.

Our future results may be adversely impacted if we do not effectively manage our expanded operations following completion of the proposed Sun Country acquisition.

Following the completion of the proposed Sun Country acquisition, the size of our business will be significantly larger than it is currently. Our ability to successfully manage this expanded business will depend, in part, upon management’s ability to design and implement operational, managerial, financial, and strategic initiatives that address not only the integration of two independent stand-alone companies, but also the increased scale and scope of the combined business with its associated increased costs and complexity. There can be no assurances that we will be successful or that we will realize the expected operating efficiencies, cost savings, and other benefits currently anticipated from the proposed Sun Country acquisition.

The market price of our common stock may be affected by factors different from those that are currently affecting or have historically affected the price of our common stock or Sun Country’s common stock.

Upon the completion of the proposed Sun Country acquisition, holders of our common stock and Sun Country common stock will be holders of our common stock. As our business is different from Sun Country’s, the results of operations as well as the price of our common stock may in the future be affected by factors different from those factors affecting us and Sun Country as independent stand-alone companies. We will face additional risks and uncertainties that we or Sun Country may not currently be exposed to as independent companies.

The need to integrate Sun Country’s workforce with ours following the proposed acquisition of Sun Country presents the potential for delay in achieving expected synergies, increased labor costs or labor disputes that could adversely affect our operations.

The successful integration of Sun Country and achievement of the anticipated benefits of the proposed acquisition of Sun Country depend significantly on integrating Sun Country’s employee groups and on maintaining productive employee relations. Failure to do so presents the potential for delays in achieving expected synergies of integration, increased labor costs and labor disputes that could adversely affect our operations.

We and Sun Country are both highly unionized companies. The process for integrating labor groups in an airline merger is governed by a combination of the Railway Labor Act, which we refer to as the RLA, the McCaskill-Bond Act, and where applicable, the existing provisions of each company’s collective bargaining agreements and union policy. Pending operational integration, it is generally necessary to keep the unionized employee groups at each airline separate and apply the terms of the existing collective bargaining agreements unless other terms have been negotiated.

Under the RLA, the National Mediation Board, which we refer to as the NMB, has exclusive authority to resolve representation disputes arising out of airline mergers. The disputes that the NMB has authority to resolve include (i) whether the proposed acquisition of Sun Country has created a “single carrier” for representation purposes; (ii) designation of the appropriate “craft or class”—the RLA term for “bargaining unit”—for bargaining on a system wide basis, an issue which typically arises from minor inconsistencies over which positions are included within a particular craft or class at the two companies; and (iii) designation of the representative of each craft or class.

Under the McCaskill-Bond Act, seniority integration must be accomplished in a “fair and equitable” manner consistent with the process set forth in the Allegheny-Mohawk Labor Protective Provisions, which we refer to as the LPPs. Such process consists first of direct negotiations between the companies and the incumbent unions and second, if integration cannot be achieved through agreement, submitting the seniority integration to binding arbitration by a neutral arbitrator. Employee dissatisfaction with the results of the seniority integration can lead to litigation, which in some cases can delay implementation.

Where employees within a craft or class are represented by a union at one airline but not represented at the other, it is possible that the existing union, or another labor organization, may seek to organize the non-represented group or to represent the combined group. This too presents the potential for increased labor costs and labor disputes.

In order to fully integrate the pre-merger represented employee groups, we may be required to negotiate joint collective bargaining agreements covering the respective combined crafts or classes of employees. Where necessary, these negotiations will likely begin after a single post-merger representative has been certified by the NMB.

•In January 2026, announced a definitive merger agreement under which Allegiant plans to acquire Sun Country Airlines

•Achieved controllable completion of 99.9% for the year

•Airline-only operating CASM, excluding fuel and special charges of 8.04 cents, down 6.1 percent as compared with full-year 2024, on capacity growth of 12.6 percent

•During the year, expanded the network by announcing 54 new routes, including service to eight new cities:

Atlantic City (NJ), Burbank (CA), Columbia (MO), Fort Myers (FL), Huntsville (AL), La Crosse (WI), Philadelphia (PA), and Trenton (NJ)

•The only US Airline named by Newsweek as one of America's Most Loved Brands 2025

•Named Best Airline Credit Card by USA TODAY's Readers' Choice Awards for the seventh consecutive year and Best Frequent Flyer Program by USA TODAY's Readers' Choice Awards for the second consecutive year

•$139.6 million in total co-brand credit card remuneration received from Bank of America, up 3.6 percent from the prior year

•Ended the year with 21 million total active Allways Rewards members

•Published the company's fourth annual sustainability report

Network growth in the future will continue to be affected by timing of aircraft deliveries, aircraft in heavy maintenance, airport construction and disruptions, trends in domestic, leisure air travel demand and other factors. We have identified over 1,400 incremental domestic nonstop routes as opportunities for future network growth, of which over 75 percent currently have no nonstop service. Our total number of origination cities and leisure destinations were 91 and 35, respectively, as of February 1, 2026, including announced routes.

Our unique model is predicated on expanding and contracting capacity to meet seasonal leisure travel demands.

Proposed Acquisition of Sun Country Airlines

In January 2026, we entered into an agreement to acquire Sun Country subject to satisfaction of customary closing conditions, including each company's receipt of certain shareholder approvals and regulatory reviews and approvals. See Item 1. Business - "Announced Acquisition of Sun Country Airlines." We believe the proposed transaction aligns with our long-term strategic objectives and is expected to enhance our network breadth, operational flexibility, and ability to respond to demand shifts, while supporting scheduled service, charter and cargo operations of both airlines. We believe the combination of our two financially strong leisure carriers in the U.S. will create benefits for customers, communities, employees, and partners by enhancing stability, expanding opportunities, and enabling continued investment and innovation. There are several risks associated with whether or not the transaction will close and also with respect to future operations if the transaction does close. See Item 1A. Risk Factors - "Risks Related to our Proposed Acquisition of Sun Country Airlines Holdings, Inc.” Future results of operations will be affected by the timing of regulatory approvals, integration considerations, transaction costs and other factors.

Business and Macroeconomic Conditions

Consumer confidence vacillated during 2025, which along with other macroeconomic and airline industry events, initially contributed to a general decline in consumer spending and, in particular, softened demand for domestic, leisure air travel. Although demand fluctuates, macroeconomic uncertainty persists, driven by factors such as trade policies and tariffs. These factors have impacted our fares, load factors, and profitability. Our results of operations may continue to be impacted while these conditions persist. We continue to monitor how these factors could impact our business and take steps to mitigate their effect on our business.

Elevated fuel costs in the future may impact our overall cost structure and operating results.

In September 2025, we completed the sale of Sunseeker Resort. The sale aligns with our strategic focus on our core Airline operations.

Our cargo business is concentrated with Amazon, and any decrease in volumes or increase in costs, or a termination of the ATSA, could have a material adverse effect on our business, results of operations and prospects.

Cargo revenue under the ATSA represented approximately 16.4 percent of Sun Country’s total operating revenues for the stub period, and this cargo revenue consisted entirely of air cargo transportation services provided to Amazon under the ATSA. The ATSA does not require a minimum amount of flying and Amazon is permitted to decrease flying volume at any time. Our cargo business would decline if Amazon’s use of our cargo services decreases for any reason, including due to general economic conditions or preferences of Amazon and its customers. A decline in our cargo business would materially adversely affect our business, results of operations, and prospects.

In addition, the profitability of the ATSA is dependent on our ability to manage and accurately predict costs. Our projections of operating costs, crew productivity and maintenance expenses contain key assumptions, including flight hours, aircraft reliability, crew member productivity, compensation and benefits and maintenance costs. If actual costs are higher than projected or aircraft reliability is less than expected, or aircraft become damaged and are out of revenue service for repair, the profitability of the ATSA and future operating results may be negatively impacted. We rely on flight crews that are unionized. If our costs are increased under collective bargaining agreements and we cannot recover such increases under the ATSA, our operating results would be negatively impacted, in which case, it may be necessary for us to commit fewer resources to the Sun Country scheduled or charter service, which could limit our expected growth in those areas.

Performance under the ATSA is subject to a number of challenges and uncertainties, such as: unforeseen maintenance and other costs; our ability to hire pilots, crew and other personnel necessary to support our cargo services, which can be impacted by industry-wide staffing shortages; interruptions in the operations under the ATSA as a result of unexpected or unforeseen events, whether as a result of factors within our control or outside of our control; and the level of operations and results of operations, including margins, under the ATSA being less than our current expectations and projections. The ATSA also contains monthly incentive payments for reaching specific on-time arrival performance thresholds and there are monetary penalties for on-time arrival performance below certain thresholds. As a result, our operating revenues may vary from period-to-period depending on the achievement of monthly incentives or the imposition of penalties. We do not currently meet the reliability standards to avoid penalties under the ATSA. Further, we could be found in default of the ATSA if we do not maintain certain minimum thresholds over a period of time. If we are placed in default due to the failure to maintain reliability thresholds, Amazon may elect to terminate all or part of the services we provide. Amazon may also terminate the ATSA for convenience, subject to certain notice requirements and payment of a termination fee. The ATSA is also subject to two, two-year extension options, which Amazon may choose not to exercise.

To the extent our volume of flying for Amazon decreases or costs associated with our cargo business increase, or if the ATSA is terminated for any reason, our business, results of operations and prospects could be materially and adversely affected.

The Sun Country business is significantly tied to and consolidated in its main hub in Minneapolis-St. Paul (MSP), and any decrease in traffic in this hub could have a material adverse effect on our business, results of operations and brand.

The Sun Country airline service is concentrated around our hub in MSP and our business is impacted by economic and geophysical factors of this region. We maintain a large presence in MSP as approximately 93% of Sun Country’s 2025 scheduled service capacity, as measured by ASMs, had MSP as either their origin or destination. Flight operations in Minneapolis can face extreme weather challenges in all seasons, but especially in the winter which at times has resulted in severe disruptions in our operation and the incurrence of material costs as a consequence of such disruptions. Our business could be further harmed by an increase in the amount of direct competition we face in the Minneapolis market or by continued or increased congestion, delays or cancellations. For instance, MSP is also a significant hub for Delta Air Lines. If we were to experience increased competition from LCCs or ULCCs, or increased competition on low-fare products from Delta Air Lines or another legacy network airline in the Minneapolis market, our business, results of operations and prospects could be materially adversely affected.

Our business would also be negatively impacted by any circumstances causing a reduction in demand for air transportation in the Minneapolis area, such as adverse changes in local economic conditions, local regulations and/or mandates, health concerns, adverse weather conditions, negative public perception of Minneapolis, riots, social unrest, terrorist attacks or significant price or tax increases linked to increases in airport access costs and fees imposed on passengers.

We currently operate out of Terminal 2 at MSP. Our access to use our existing gates and other facilities in Terminal 2 is not guaranteed. We cannot assure you that our continued use of our facilities at MSP will be on acceptable terms with respect to operations and cost of operations, or at all, or that our ongoing use of these facilities will not include increased fees.

Political and economic instability in the international markets Sun Country operates as well as income and other taxes could negatively affect our business and operating results due to our international operations.

Some of Sun Country’s existing and targeted growth international markets include countries with less developed economies, legal systems, financial markets and business and political environments that are vulnerable to economic and political disruptions, such as significant fluctuations in gross domestic product, interest and currency exchange rates, civil disturbances, government instability, nationalization and expropriation of private assets, trafficking and the imposition of charges by governments, as well as health and safety concerns. The occurrence of any of these events in markets served by us now or in the future and the resulting instability may have a material adverse effect on our business, results of operations and financial condition.

Due to operating in multiple jurisdictions we may also become subject to a wide range of income and other taxes. Further, any changes in tax laws in any of the jurisdictions in which we are subject to tax, such as increases in tax rates or limitations on our ability to deduct certain expenses from taxable income could materially affect our tax obligations.

Our ability to use Sun Country's net operating loss carryforwards to offset future taxable income for U.S. federal and state income tax purposes may be limited as a result of previous ownership changes, this acquisition or taxable income failing to reach sufficient levels.

As of the acquisition closing date, Sun Country recognized an estimated $77.8 million federal net operating loss carryforwards (“NOLs”) which may be carried forward indefinitely, and an estimated $4.0 million of state NOLs which begin to expire in 2033.

Our ability to realize the benefit of these federal and state net operating loss will be impacted by the limitation imposed by Section 382 of the Internal Revenue Code (the “Code”). As a result of our acquisition of Sun Country, Sun Country has experienced an “ownership change” as defined by Section 382 which imposes an annual limitation on the amount of the pre-ownership change NOLs we may utilize. The annual base limitation is determined based on the value of the corporation before the ownership change multiplied by the applicable long-term tax-exempt rate and may be increased or decreased by Sun Country’s built-in-gain or built-in-loss at the time of the ownership change. Any unused annual limitation may be carried over to subsequent taxable years with certain limitations.

A section 382 study is in progress but based on the initial assessment, we do not believe the Section 382 limitations will significantly impact our ability to utilize these NOLs in future periods.

Second quarter 2026 highlights include the following. Note that second quarter consolidated results include Sun Country operations only from and after the May 13, 2026 closing date of the transaction until the period end on June 30, 2026 (the "stub period").

•On May 13, 2026, we completed the acquisition of Sun Country just four months after announcing the transaction.

•Consolidated total operating revenue of $943.5 million

•Consolidated third-party products revenue of $45.8 million

◦Allegiant Air third-party products revenue of $44.5 million, up 32.2 percent year over year driven by cobrand remuneration

•Allegiant Air available seat miles per gallon of fuel of 85.4, up 0.8 percent year over year

•Received proceeds of $874.7 million from debt financings during the quarter ◦Issued $650.0 million Senior Secured Notes due 2031 and used the proceeds to refinance $377.5 million of our Senior Secured Notes due 2027.

◦Received proceeds of $224.7 million from debt secured by aircraft and aircraft related assets

Subsequent Events

•In July, entered a 12-month exclusive distribution agreement with Expedia Group, Allegiant's first-ever authorized online travel agency ("OTA") partner, bringing the company's nonstop network to all of Expedia Group's U.S. brands and expanding reach to new leisure customers

•In July, announced enhancements to the onboard experience, including complimentary inflight beverage service on all Allegiant flights beginning August 1, 2026, and Allegiant First, a new premium seating tier scheduled to debut on select aircraft in spring 2027

•On July 31, a new collective bargaining agreement with the International Brotherhood of Teamsters representing the Allegiant pilots was ratified with nearly 80 percent of votes in favor

(3)Includes 12 aircraft under finance lease as of June 30, 2026.

(4)Includes one aircraft under finance lease as of June 30, 2026.

Sun Country's largest and primary base is Minneapolis-Saint Paul International Airport ("MSP"), where it is the largest low-cost carrier and the second largest airline overall. Our MSP network served approximately 96 markets as of June 30, 2026. As of that date, Sun Country also served approximately 17 non-MSP markets and was selling a total of 109 routes.

In May 2026, we closed on our agreement to acquire Sun Country. We believe the transaction aligns with our long-term strategic objectives and is expected to enhance our network breadth, operational flexibility, and ability to respond to demand shifts, while supporting the passenger and cargo operations of both airlines. The acquisition of Sun Country involves the integration of Sun Country’s business with our existing business, which is a complex, costly, and time-consuming process. Integration of the two companies is underway.

Both companies continue to operate as separate airlines under FAA rules. We have applied with the FAA for a single operating certificate which we currently expect will be obtained in 2028. Our ability to combine operations will be limited until we receive a single operating certificate and there are joint collective bargaining agreements in place with the various unionized work groups.

Commercial Initiatives

In July 2026, we entered into a 12-month exclusive distribution agreement with Expedia Group to be Allegiant Air's first-ever authorized online travel agency ("OTA") partner, bringing our nonstop network to all of Expedia Group's U.S. brands and expanding reach to new leisure customers. Early results are promising, comprising of approximately 3% of bookings since the launch, with meaningfully more than half of those bookings from net new customers.

We have also announced enhancements to our onboard experience. Beginning August 1, 2026, all Allegiant Air flights will include a complimentary inflight beverage service. We have also announced Allegiant First, a new premium seating tier scheduled to debut on future MAX deliveries, with service expected to begin in spring 2027. The introduction of Allegiant First will feature a redesigned and enhanced cabin with eight new Allegiant First seats with minimal impact to seating capacity. The new seating to be included on these future deliveries will feature improved seat cushions and in-seat power in all cabins.

We currently expect seven aircraft to be delivered to us in the last six months of 2026 with the remaining aircraft under contract to be delivered in 2027 and 2028. Delays in aircraft deliveries could impact our ability to schedule additional growth when the demand environment allows.

The Allegiant Air pilots, who are represented by the International Brotherhood of Teamsters (“IBT”), ratified a new collective bargaining agreement on July 31, 2026. Among other new and modified terms, that new agreement provides for increased compensation and enhanced benefits to the Allegiant Air pilot group and contains improvements to the scheduling process for the Company. In addition, pursuant to the terms of that agreement, the pilot retention bonuses we have accrued will be payable no later than fourth quarter 2026.

In 2026, the collective bargaining agreement between Allegiant Air and its air dispatchers represented by the IBT became amendable under the Railway Labor Act (“RLA”). The parties are engaged in negotiations over new and modified rates of pay, rules, and working conditions pursuant to the procedures set forth in Section 6 of the RLA.

In 2025, the collective bargaining agreement covering the Sun Country pilots, who are represented by the Air Line Pilots Association (“ALPA”), became amendable. The parties continue to engage in negotiations under Section 6 of the RLA for a new agreement addressing rates of pay, rules, and working conditions for those employees.

In order to fully integrate the pre-merger union represented employee groups of Allegiant Air and Sun Country, we may be required to negotiate joint collective bargaining agreements covering the respective combined crafts or classes of employees. Where necessary, these negotiations will likely begin after a single post-merger representative has been certified by the National Mediation Board.

Items affecting comparability

As the acquisition of Sun Country was completed on May 13, 2026, the three and six months ended June 30, 2026 include the results of Sun Country for the period May 13, 2026 through June 30, 2026, while the comparative periods in 2025 do not. Consolidated revenue and expenses all increased compared to the prior period due to the incorporation of Sun Country's operations into the Company. As a result, the below discussion of changes to our revenue and expenses compared to the prior year largely focuses on material factors independent of the acquisition.

* Sun Country numbers only after May 13, 2026

Passenger revenue. Passenger revenue for second quarter 2026 increased $204.6 million or 33.1 percent, of which Sun Country contributed $105.5 million during the stub period.

The remaining change is attributable to strength in demand, which drove a 17.9 percent increase in average total fare for Allegiant Air, including a 39.9 percent increase in average scheduled service base fare. Allegiant Air scheduled service passengers decreased by 0.8 percent on a capacity reduction of 6.2 percent, resulting in a 4.0 percentage point increase in the Allegiant Air load factor.

Third party products revenue. Third party products revenue increased $12.1 million or 36.0 percent, of which Sun Country contributed $1.3 million during the stub period.

The remaining increase is attributable to a $9.3 million increase in the marketing component of Allegiant Air's co-brand remuneration and smaller increases in Allegiant Air's third party rental car and travel insurance revenue. These increases were slightly offset by a decrease in hotel room revenue.

Fixed fee contract revenue. Fixed fee contract revenue increased $28.7 million, all of which was attributable to Sun Country during the stub period.