Low-cost carriers are pressing the Trump administration for direct financial help as jet fuel prices spike during the war with Iran. The Association of Value Airlines, which represents Spirit, Allegiant, Avelo, Frontier, and Sun Country, has asked for a $2.5 billion federal “liquidity pool” to cover higher fuel expenses. North American jet fuel prices have climbed to about $4.10 a gallon, roughly 88% above year-ago levels, prompting fare increases across the industry. The group said the money would be narrowly aimed at offsetting added fuel costs to keep operations stable and fares relatively low, the New York Times reports.
The aid would be traded for warrants that could convert into equity stakes in the companies, per the Wall Street Journal. The airlines were encouraged by President Trump saying Thursday that he likes “having a lot of airlines, so it’s competitive.” That was in reference to keeping Spirit Airlines afloat. According to testimony in bankruptcy court, that deal could provide the federal government with warrants giving it as much as 90% ownership of Spirit. The White House acknowledged that budget airlines have approached the Transportation Department, saying officials are monitoring the sector but playing down the prospect of a broader deal. The trade group is also lobbying Congress to temporarily suspend a 7.5% ticket excise tax and a $5.30 per-flight segment fee, which normally support federal aviation programs.
