Budget Airlines Seek Lifeline Amid Jet Fuel Surge

U.S. Transportation Secretary Sean Duffy announced on Saturday that he does not see the need for the government to bail out low-cost airlines which have requested $2.5 billion in relief due to soaring jet fuel prices. Speaking at a press conference following the collapse of Spirit Airlines at Newark airport, Duffy emphasized that these airlines have access to private market funds and suggested they seek financing there as a more suitable option.

On Monday, U.S. budget airlines, including Frontier and Avelo, submitted a proposal to exchange equity stakes for the requested $2.5 billion government assistance. The Association of Value Airlines confirmed its pursuit of creating a liquidity pool to manage heightened fuel costs and stabilize operations to keep ticket prices low amid market turbulence.

The airlines petitioned Congress to waive the 7.5% federal excise tax on tickets and a $5.30 per segment tax, which could offset a third of extra fuel expenses. The plea illustrates the broader impact of the U.S.-Israeli conflict with Iran, doubling jet fuel costs and squeezing airline profits. CEOs of several low-cost carriers met with Secretary Duffy and FAA chief Bryan Bedford to discuss their proposed measures.

(With inputs from agencies.)