What to know about budget airlines' $2.5 billion relief request amid rising jet fuel costs
A group of low-cost airlines has requested $2.5 billion in financial relief from the Trump administration to offset the rising cost of jet fuel and keep airfare prices affordable.
The Association of Value Airlines, a trade group that represents Allegiant, Avelo, Frontier, Spirit, and Sun Country Airlines, has asked the administration to create a liquidity pool for the carriers to pull from as fuel prices, which have continually increased since February amid the ongoing conflict in Iran, continue to put their businesses in jeopardy.
"AVA and its members are committed to working collaboratively with the federal government to find solutions that protect both the industry and the traveling public," the group said in a statement, adding that "temporary government support to preserve vital industry competition is not without precedent."
The group cited COVID-19 relief that was provided to carriers amid travel industry disruptions during the pandemic, stating that "any carrier choosing to participate may be required to issue warrants to the government in order to provide benefit to the taxpayer."
"The market dominance of the country's biggest airlines has never been greater, and smaller value airlines are disproportionately impacted by higher fuel prices," the group stated.
It added that value airlines "play a critical role in the affordability and accessibility of air travel" and help "keep fares competitive across the industry."
The group's request comes on the heels of a meeting with Transportation Secretary Sean Duffy last week to discuss the impact of high jet fuel prices, which have increased by nearly 100% in recent weeks, according to AVA.
AVA also sent a letter to House and Senate leaders last week, requesting a temporary suspension of the 7.5% federal excise tax on airline tickets and the $5.30 domestic per passenger, per segment fee.
The group noted in the letter that the suspension request is not long-term, "but rather a targeted, limited measure to address extraordinary cost conditions."
"Absent relief, sustained fuel cost pressures will translate to higher total trip costs for passengers. While base fares are often the most visible component of ticket pricing, airlines may increasingly be forced to rely on raising the cost both of fares and ancillary services to offset fuel cost increases," the carriers wrote.
In a statement to ABC, a White House spokesperson said they are "aware of outreach that was made by a group of budget airlines to the Department of Transportation, and the Administration continues to monitor the health of the U.S. aviation industry for passengers and airline employees."
"Unless an announcement is officially made by the Administration, however, any discussion about federal policymaking should be regarded as baseless speculation," the spokesperson added.
The Department of Transportation did not immediately respond to a request for comment.
