Other Airlines Want Help From Administration With Fuel Costs
Newser • • business
Key Points:
- Low-cost carriers represented by the Association of Value Airlines, including Spirit, Allegiant, Avelo, Frontier, and Sun Country, are requesting a $2.5 billion federal liquidity pool to offset rising jet fuel costs amid tensions with Iran.
- Jet fuel prices in North America have surged to approximately $4.10 per gallon, an 88% increase from the previous year, leading to fare hikes across the airline industry.
- The proposed federal aid would be exchanged for warrants convertible into equity stakes, potentially giving the government significant ownership, as seen in the Spirit Airlines case where federal warrants could yield up to 90% ownership.
- The White House is aware of the airlines' requests and is monitoring the situation but has downplayed the likelihood of a broad bailout, while the trade group is also pushing Congress to suspend certain ticket taxes and fees temporarily.
