Budget airlines push for up to $2.5 billion in government relief
FILE-A flight attendant checks on passengers mid-flight on a flight from Hartsfield-Jackson Atlanta International Airport in Atlanta, Georgia. (Photo by Rob Carr/Getty Images)
Several budget airlines are seeking $2.5 billion in government support in exchange for warrants that could be converted into equity stakes.
Last week, executives from the budget airlines, including Frontier and Avelo, held a meeting with Transportation Secretary Sean Duffy and Federal Aviation Administration chief Bryan Bedford to discuss the proposal, The Wall Street Journal reported.
Citing sources, Reuters reported that the collection of airlines produced the $2.5 billion figure by calculating how much more the companies expect to spend on jet fuel in 2026 compared with earlier projections.
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United and American lowered their full-year outlooks, but these companies told The Wall Street Journal that they have been able to reduce most of the mounting costs by charging higher fares, while travel demand remained steady.
RELATED: Air Canada suspending flights to JFK over rising jet fuel costs
Separately, the Trump administration is considering helping Spirit Airlines, with the budget carrier in negotiations to receive a loan of up to $500 million in return for warrants that could give the U.S. government a substantial financial stake, according to The Wall Street Journal.
In 2025, Spirit Airlines filed for bankruptcy protection in August for a second time in less than a year and was planning to exit in the spring or summer after making a preliminary deal with lenders.
Air Canada recently announced that it was suspending service to New York’s JFK International airport this summer because of jet fuel shortages resulting in higher prices.
The airliner told the Associated Press that service from Toronto and Montreal to JFK International airport will stop June 1 and resume on Oct. 25.
Flights to the New York area’s two other airports — LaGuardia and Newark — will remain the same. The AP reported that Air Canada offers 34 flights a day to those two airports from six Canadian cities.
Furthermore, the U.S. Treasury received warrants from major airlines in exchange for aid during the COVID-19 pandemic under a $54 billion support program but only collected $556.7 million from selling them, as many proved to be of little value, Reuters reported.
The Source: Information for this story was provided by The Wall Street Journal, Reuters, and previous FOX Local reporting. This story was reported from Washington, D.C.