Transportation secretary Sean Duffy has come out against providing a $2.5 billion federal aid package to the remaining U.S. discount carriers.
"At this point I don't think it's necessary," Duffy said at a May 2 press conference he held primarily to address the Spirit shut down.
The Association of Value Airlines (AVA), a trade group that represents Frontier, Avelo, Allegiant and Sun Country (and had represented Spirit before it ceased operations) requested that the administration create a $2.5 billion liquidity pool to be used exclusively to offset incremental fuel costs caused by the Iran war and the associated Strait of Hormuz closure.
Since mid-March, average U.S. daily jet fuel prices have generally tracked significantly above $4 per gallon, compared to the price of $2.50 on the eve of the war.
Duffy said the remaining AVA members have access to cash.
"If they want to come to the U.S. government, we would be a lender of last resort. If they can find dollars in the private markets, I think that's better for them," he said.
He added that any such rescue package would require funding from Congress.
Travel Weekly has reached out to AVA for comment.
Two of the group's members are nearing a merger, with the closing of Allegiant's planned purchase of Sun Country expected as soon as the middle of this month. Last week Allegiant reported $81.1 million in operating profits for the first quarter and net income of $42.5 million.
Frontier, the largest remaining AVA member carrier, has been a consistent money loser in recent years. Frontier will report first quarter earnings on May 5.