TLDR
- Frontier, Avelo, and other budget airlines are asking the Trump administration for $2.5 billion in government aid
- The request is in exchange for warrants that could convert into equity stakes in the airlines
- The $2.5 billion figure is based on how much more the airlines expect to spend on jet fuel this year
- The aid request assumes jet fuel prices will stay above $4 a gallon for the rest of 2025
- Spirit Airlines is separately in talks for up to $500 million in government loans to avoid liquidation
A group of U.S. budget airlines, including Frontier and Avelo, has approached the Trump administration asking for $2.5 billion in government assistance. In return, the government would receive warrants that could convert into equity stakes in the airlines.
Budget Airlines Pitch Trump Administration on $2.5 Billion Relief Plan-wsj
— First Squawk (@FirstSquawk) April 27, 2026
The request comes as rising jet fuel costs are squeezing low-cost carriers hard. Budget airlines already operate on thin margins, leaving little room to absorb higher costs.
The airlines calculated the $2.5 billion figure by estimating how much more they expect to spend on jet fuel in 2025 compared to earlier forecasts. That estimate assumes jet fuel prices will average above $4 a gallon for the rest of the year.
The spike in fuel prices follows disruption to global oil supplies caused by the U.S.-Israel war on Iran. Larger carriers like United and American have been able to pass some of those costs on to travelers through higher fares. Budget airlines have less flexibility to do that.
This latest request is an escalation. Earlier this month, the same group of airlines asked lawmakers to approve a temporary tax holiday on airline tickets. That request did not move forward.
Relief Talks Continue in Washington
Several budget airline CEOs traveled to Washington, D.C., last week to meet with Transportation Secretary Sean Duffy and Federal Aviation Administration chief Bryan Bedford. Transportation Department officials have since passed the airlines’ request up to the White House.
President Trump made a comment in the Oval Office on Thursday that he likes “having a lot of airlines, so it’s competitive.” Budget airline executives took that as an encouraging sign. The White House did not respond to a request for comment on the aid package.
Talks on a potential economic aid package are expected to continue in the coming days.
Spirit Airlines in Separate Negotiations
Spirit Airlines is in its own separate talks with the administration. The airline is negotiating a loan of up to $500 million in exchange for warrants that could give the U.S. government a large stake in the carrier. The goal is to help Spirit avoid liquidation.
The broader industry has been through government aid before. U.S. airlines received $54 billion in grants and loans during the Covid-19 pandemic in 2020 and 2021. The government later sold the warrants it received through public auctions, generating more than $550 million.
Some budget airlines are expected to update investors soon on how rising fuel costs are affecting their finances.
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