A group of low-cost airlines in the US is seeking temporary federal tax relief as higher jet fuel prices, driven by the war with Iran, put fresh pressure on carriers that already face thin operating margins.
Reuters reported on April 20, 2026, that the CEOs of Spirit Airlines, Frontier Airlines, Allegiant Air, Sun Country and Avelo are set to meet on April 21 with Transportation Secretary Sean Duffy as they push for relief from federal ticket taxes.
The carriers, through the Association of Value Airlines, have asked Congress to temporarily suspend the 7.5% federal excise tax on airline tickets and the $5.30 domestic segment tax.
The group said waiving those charges would offset about one-third of the added fuel burden now hitting their business.
Reuters reported that Spirit’s restructuring plan has come under renewed pressure from fuel prices that reached about $4.24 per gallon, nearly double the $2.24 level built into its 2026 projections.
J.P. Morgan estimated that could add roughly $360 million in fuel expenses for Spirit in 2026, a hit some analysts say the airline may not be able to absorb given its precarious financial situation.
For airlines that have built their businesses catering to price-sensitive leisure travelers, tax relief could provide needed relief. Still, the federal levies they want suspended help fund the Airport and Airway Trust Fund, which supports FAA programs and aviation infrastructure. Any relief bill would raise immediate questions about how to replace that revenue.
Any tax relief would require action from Congress. The airline group’s request comes as low-cost carriers contend with higher jet fuel prices, softer fares and existing financial pressure. Reuters reported that Spirit’s financial outlook has also come under renewed strain following its bankruptcy restructuring.