April 27 (UPI) -- An industry group that represents budget airlines has reached out to the Department of Transportation about creating a $2.5 billion pool to help keep them in business as the price of jet fuel remains high.
The Association of Value Airlines -- which represents Allegiant Air, Avelo Air, Frontier Airlines, Spirit Airlines and Sun Country -- said Monday that it has approached the Trump administration about the pool because an 88% increase in the cost of jet fuel is endangering their ability to do business, The Wall Street Journal and The New York Times reported.
Spirit Airlines itself has been negotiating a possible $500 million bailout from the federal government after warning that it is running out of cash that is separate from the AVA request.
Airlines worldwide started raising fees in March after the United States and Israel started the war in Iran, which led the country to blockade the Strait of Hormuz in response and has caused the price of gas and oil to increase significantly.
Fuel expenses account for about 30% of airline operating costs and even a sustained $1 increase in per barrel of oil can increase those costs by millions of dollars.
