In a statement, Avelo declined to address the report directly while endorsing its underlying premise, saying it "emphatically agree[s] that a healthy airline industry with strong competition is important to the U.S. economy, especially during this period of high fuel prices." Neither Frontier nor the White House offered any response.
The $2.5 billion ask builds on a prior round of lobbying. Separately, the Association of Value Airlines has written to congressional leaders urging a temporary rollback of aviation-related charges, among them the 7.5% federal excise tax applied to ticket purchases, according to Bloomberg.
Spirit Airlines is the subject of a parallel but distinct set of government deliberations. Officials are reportedly considering extending up to $500 million in loans to Spirit, with warrants attached that would hand Washington a meaningful ownership share in the troubled carrier, according to The Wall Street Journal.
Trump's public remarks have given the budget carriers some reason for optimism; the president told reporters he prefers a marketplace with many carriers because, as he put it, it keeps things "competitive," according to the Journal.
The fuel cost crisis follows the near-doubling of jet fuel prices since the outbreak of the Iran war, which has closed the Strait of Hormuz and strained global oil and refined fuel supplies. Larger carriers such as United Airlines and American Airlines have reduced their full-year outlooks but said they have been able to pass much of the increased cost to passengers through higher fares. Budget carriers, which rely more heavily on price-sensitive travelers and operate with thinner margins, have less ability to do so.
The current request echoes a pandemic-era precedent. Washington extended $54 billion to airlines during COVID-19, acquiring warrants as part of the arrangement. Rather than converting those warrants into equity, the government offloaded them through a series of auctions that brought in somewhere between $550 million and $556.7 million — a modest return relative to the scale of assistance provided.
