Rising jet fuel prices stemming from the war in Iran contributed to the shutdown of Spirit Airlines earlier this month.
Since Spirit had been seeking a $500 million federal bailout, other budget airlines are now looking for similar arrangements as the elevated energy costs eat into their bottom lines.
Fox Businessreportedon May 4 that the Association of Value Airlines — which represents Frontier Airlines, Allegiant Air, Sun Country, and Avelo — announced in a statement that the companies were seeking $2.5 billion in aid from the Trump administration.
That figure is reportedly derived from how much more the carriers expect to spend on jet fuel relative to last year.
“Value airlines are the lynchpin that commands fare discipline across the entire airline industry with sustained competition that expands options for consumers. Make no mistake: if there are fewer value airlines, flying will become less affordable for Americans,” the Association of Value Airlines said in their statement.
“What happened to Spirit Airlines is a clear warning sign of what can occur when policy choices and regulatory dynamics tilt the competitive landscape toward the largest incumbent carriers,” the group added.
“It underscores the need for continued collaboration among all stakeholders to ensure a balanced, competitive environment that supports the long-term viability of value airlines.”
The $2.5 billion would come through stock warrants that could be converted to equity stakes, according to Fox Business.
But senior Trump administration officials have said that such a deal is not likely.
“At this point, I don’t think it’s necessary. They do have access to cash,” Transportation Secretary Sean Duffy said, according to areportfrom CNBC.
Source: VidNews » Feed
