WASHINGTON, April 27, 2026 US budget airlines request $2.5 billion government aid Several US budget airlines have requested $2.5 billion in government aid to offset soaring fuel costs linked to the US-Iran conflict, offering equity warrants in exchange for financial support.
Financial Strain and Aid Request
The airlines, facing a near-doubling of kerosene prices due to heightened tensions between the US and Iran, have turned to the federal government for relief. The $2.5 billion aid package would help cover expected fuel cost increases this year, according to sources familiar with the negotiations.
In a bid to secure the funding, carriers have proposed issuing warrants that could be converted into shares, a move mirroring past bailout structures. This approach was previously employed during the COVID-19 pandemic, when the US Treasury received warrants from major airlines as part of a $54 billion aid program. The eventual sale of those warrants netted the government $556.7 million.
Spirit Airlines Nears Separate Bailout Deal
Among the airlines seeking assistance, Spirit Airlines is close to finalizing a separate rescue agreement with the US government. The deal could include up to $500 million in state-backed financing, with the Treasury receiving warrants for 90% of the company’s equity in return.
The potential bailout highlights the precarious financial position of budget carriers, which operate on thinner margins than their legacy counterparts. Spirit Airlines, in particular, has been hit hard by the fuel price surge, prompting urgent negotiations with federal officials.