A group of U.S. budget airlines, including Frontier and Avelo, are seeking $2.5 billion in government assistance in exchange for warrants that could convert into equity stakes, the Wall Street Journal reported on Sunday.
The group came up with the $2.5 billion figure by calculating just how much more they expect to spend on jet fuel this year compared to earlier forecasts, the WSJ report said, citing people familiar with the matter.
The estimate assumed jet fuel prices would average above $4 a gallon in the remainder of the year. Talks on a potential economic aid package are expected to continue in the coming days, the WSJ report said.
Global airlines were battered by a spike in jet fuel prices, as the U.S.-Israel war on Iran disrupted global oil supplies and pushed up upstream prices.
Budget airlines were viewed as especially vulnerable, given their already razor-thin margins.
The Trump administration was seen considering extending a lifeline to Spirit Airlines to help it avoid liquidation. The company is in talks to receive up to $500 million in return for warrants offering a major stake in the airline, earlier WSJ reports said.
Several budget airline CEOs were seen meeting top U.S. officials in Washington, D.C., last week, the WSJ reported.
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