US low-cost airlines seek temporary tax relief to address soaring fuel costs (updated)

Frontier group

20/04/2026 21:50

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By David Shepardson

WASHINGTON, April 20 (Reuters) - The CEOs of major low-cost airlines are set to meet on Tuesday with U.S. Transportation Secretary Sean Duffy as they urge Congress to provide temporary tax relief to partially offset the soaring cost of jet fuel sparked by the war with Iran.

A group representing Spirit Airlines, Frontier Airlines ULCC.O, Allegiant Air ALGT.O, Sun Country SNCY.O and Avelo last week wrote leaders in Congress asking lawmakers to pass legislation 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, said the Association of Value Airlines.

"Absent relief, sustained fuel cost pressures will translate to higher total trip costs for passengers," the group's executive director Jonathon Freye wrote congressional leaders. "While base fares are often the most visible component of ticket pricing, airlines may increasingly be forced to rely on raising the cost both of fares and ancillary services to offset fuel cost increases."

The fuel price hike has prompted airlines in North ​America, to raise ​baggage ⁠fees and cut flights and planned capacity growth.

The U.S. Transportation Department did not immediately comment on the planned meeting.

Last week, Reuters reported Spirit Airlines' bankruptcy exit plan is ​under renewed pressure after a sharp rise in jet fuel prices undermined key assumptions behind its restructuring.

    Spirit is seeking court approval ​for a second restructuring in less than a year, after emerging from bankruptcy in March 2025 and continuing to face elevated domestic capacity, weak leisure demand and a difficult pricing environment.

 (Reporting by David Shepardson; Editing by Alistair Bell)

 ((David.Shepardson@thomsonreuters.com; 2028988324;))