Low Fare Airlines Seek $2.5 Billion from Trump Administration
The Association of Value Airlines represents the interests of Allegiant, Avelo, Frontier, Spirit and Sun Country Airlines, among others.
(The United States of America) The Association of Value Airlines (AVA) said today that it has asked the Trump Administration to consider creating a $2.5 billion pool that budget carriers could draw from because they have been disproportionally affected by the run-up in fuel prices stemming from the Iran War, according to various sources.
Image of a Frontier Airlines airliner courtesy of Frontier Airlines.
The estimate assumed jet-fuel prices would remain above $4 a gallon on average for the rest of the year, according to people familiar with the matter, per The Wall Street Journal.
The AVA represents the interests of several leading U.S. low fare airlines; its five full members include Allegiant (NASDAQ: ALGT), Avelo, Frontier Airlines (NASDAQ: ULCC), Spirit Airlines and Sun Country (NASDAQ: SNCY), according to the association’s website.
The request is separate from Spirit Airlines’ negotiations to receive a loan of up to $500 million from the federal government in return for warrants.
“Since February, jet fuel prices have increased by nearly 100 percent and are placing significant financial pressure on value airlines,” the trade group, the Association of Value Airlines, said in a statement. The group added that the $2.5 billion “liquidity pool” it was seeking would be “used exclusively to offset incremental fuel costs, as a necessary and targeted measure to stabilize operations and keep airfares affordable during this period of volatility,” according to The New York Times.
Per the WSJ – for reference – U.S. airlines received $54 billion in grants and loans from the government in 2020 and 2021 to help avoid mass layoffs during the Covid-19 pandemic.
