U.S. ultra-low-cost carriers are again urging Congress to grant a temporary jet-fuel tax holiday as fuel prices climb sharply, with the Association of Value Airlines pressing for relief on behalf of Allegiant, Frontier, Avelo and Breeze. The lobbying effort comes as jet fuel has risen to about $4.63 a gallon amid the Iran war, adding pressure to carriers that have little room to absorb higher costs without lifting fares.
Jonathon Freye, the trade group’s executive director, has recently contacted several congressional offices to seek short-term relief, using the Covid-era suspension of federal excise and segment taxes as precedent. AVA has not received any indication that lawmakers will take up the request, leaving the campaign at an early stage.
The fuel spike is reverberating across US aviation. Larger airlines including United and American are signalling capacity cuts and fare increases as they respond to the same cost environment, while ultra-low-cost carriers face a narrower set of options because their business model depends on maintaining the lowest possible ticket prices.