Budget Airlines Seek $2.5 Billion Federal Aid

A group of U.S. budget airlines, including Frontier Airlines and Avelo Airlines, has requested $2.5 billion in federal assistance from the Trump administration following a meeting with top transportation officials in Washington last week.

The carriers met on April 21 with Transportation Secretary Sean Duffy and Federal Aviation Administration Administrator Bryan Bedford to discuss the aid package, according to people familiar with the talks. The proposed relief, in exchange for government warrants convertible to equity stakes, is calculated to cover projected additional jet fuel costs for the remainder of the year, assuming prices stay above $4 per gallon. Jet fuel averaged $4.19 per gallon as of late last week, data from Airlines for America shows.

Negotiations are ongoing, with Transportation Department officials forwarding the request to the White House. The surge in fuel prices stems from global supply disruptions tied to the conflict involving the United States, Israel, and Iran, including issues around the Strait of Hormuz. Budget airlines, operating on thin margins from low fares and ancillary fees, have limited ability to raise ticket prices compared with larger carriers...