A group of budget carriers have banded together to seek $2.5 billion in U.S. government relief in exchange for equity stakes in the companies, according to a Sunday Wall Street Journal report.
Frontier Airlines and Avelo Airlines were the only two carriers mentioned in the report, which cited sources as "people familiar with the matter." CEOs of several low-cost carriers last Tuesday met in Washington, D.C., with U.S. Transportation Secretary Sean Duffy and Federal Aviation Administration head Bryan Bedford, according to the report.
The $2.5 billion figure was based on how much more they would spend on jet fuel this year compared with earlier forecasts, according to the report. The Argus U.S. Jet Fuel Index on April 24 priced costs at $4.19 per gallon. The average price on Feb. 27, the day before the Iran incursion, was $2.50.
The group bailout request is separate from a potential Spirit Airlines relief deal reportedly valued at $500 million that President Donald Trump has publicly supported.
On Thursday, when asked during a press conference about aiding Spirit, which is in bankruptcy for the second time in as many years, Trump said that "we're looking at helping them," according to an AP recording. "I think we just buy it. We'd be getting it virtually debt-free. They have some good aircraft, some good assets. And when the price of oil goes down, we sell it for a profit. … We're looking if we can get it for the right price."
A new bankruptcy court hearing is scheduled for April 30 to consider terms of the potential deal, according to CNN.
Other major U.S. carriers generally have passed costs from elevated oil prices along to consumers as surcharges or higher airfares, and have noted during first-quarter earnings calls that they are not yet seeing any softening in demand.