As part of Spirit’s rescue plan, airlines ask the US government for help

According to two people who spoke to Reuters, a consortium of American low-cost carriers, including Frontier and Avelo, have suggested trading warrants convertible into equity interests for $2.5 billion in government assistance.

Last Tuesday, Federal Aviation Administration (FAA) Administrator Bryan Bedford and Transportation Secretary Sean Duffy met with the CEOs of numerous low-cost carriers in Washington to discuss the plan, which was first reported by the Wall Street Journal.

According to the sources, the group calculated the $2.5 billion amount by estimating how much more they anticipate spending on jet fuel this year in comparison to earlier projections.

The plan draws attention to one of the unforeseen effects of Washington’s war on Iran: a sharp rise in aircraft fuel prices that nearly doubled expenses, reduced profit margins, and drove smaller airlines to the verge of bankruptcy.

Avelo «emphatically agrees that a healthy airline industry with strong competition is important for the U.S. economy, especially during this period of high fuel prices,» according to a spokesman for the airline, who did not specifically address the report.