US low-cost airlines seek $2.5B bailout from Trump administration

U.S. low-cost carriers, including Frontier and Avelo, are requesting $2.5 billion in government aid, offering warrants convertible to equity in return, The Wall Street Journal (WSJ) reported, citing sources. The requested amount is based on the assumption that jet fuel prices will average over $4 per gallon for the remainder of the year. The airlines were reportedly encouraged by President Donald Trump's supportive remarks for the industry on April 23, when he stated from the Oval Office that more airlines lead to more robust competition. Separately, the government is also considering aid to prevent the liquidation of Spirit Airlines. Spirit is reportedly negotiating a loan of up to $500 million, also in exchange for warrants that would allow the U.S. government to acquire a significant stake.