After Spirit collapse, Duffy says no need for budget airline bailout

WASHINGTON - U.S. Transportation Secretary Sean Duffy said Saturday he does not think the government needs to bail out low-cost airlines that have sought $2.5 billion in government relief because of high jet fuel prices.

"I would say that at this point, I don't think it's necessary. They do 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," Duffy said at a press conference at Newark airport after the collapse of budget carrier Spirit Airlines.

He said the prospect of a Spirit bailout was seen as an opportunity by some other airlines to get money "not necessarily based on need, but based on opportunity."

On Monday, a group of U.S. budget airlines, including Frontier and Avelo, said it had proposed exchanging warrants that could be converted into equity ​stakes for $2.5 billion in U.S. government assistance.

The Association of Value Airlines confirmed it asked President Donald Trump's ​administration to create a $2.5 billion liquidity pool, used exclusively to offset incremental fuel ​costs "as a necessary and targeted measure to stabilize operations and keep airfares ⁠affordable during this period of volatility."

They have also asked Congress to suspend the 7.5% federal excise tax ​on airline tickets and $5.30 per segment tax. Waiving the fees would ​offset about one-third of the incremental cost of higher jet fuel.

The pitch highlights one of the unintended consequences of the U.S.-Israeli war ​on Iran: a surge in jet fuel prices that has roughly doubled costs, squeezing margins and pushing ‌weaker airlines ⁠closer to the brink.

The chief executives of ‌several low-cost carriers met with Duffy and Federal Aviation Administration chief Bryan Bedford in Washington last week to discuss the proposal.

The group arrived at the $2.5 billion figure by estimating how much more it expects to spend on jet fuel this year ​compared with earlier forecasts.

(Reporting by David Shepardson, Editing by William Maclean)

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This story was originally published May 2, 2026 at 7:44 AM.