U.S. low-cost airlines seek $2.5 billion bailout from the Trump administration

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CryptoWorld News reports, citing The Wall Street Journal, that a group of U.S. low-cost airlines, including Frontier and Avelo Airlines, is seeking $2.5 billion in government assistance. In return, the airlines would provide the government with warrants convertible into company equity.

The rationale for the $2.5 billion figure is the assumption that, for the remainder of this year, jet fuel prices will average above $4 per gallon.

Low-cost airlines have been encouraged by President Trump’s remarks last Thursday in the Oval Office, where he said he likes “having many airlines, so there’s more competition.”

As this request is being made, the government is also separately considering providing support to Spirit Airlines to help it avoid liquidation. Earlier reports said Spirit Airlines is in talks to obtain a loan of up to $500 million; in exchange, it would provide warrants that could give the U.S. government a significant stake in the low-cost carrier.

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