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Several U.S. airlines are seeking relief from certain taxes to offset soaring fuel costs driven by the Middle East conflict.
On April 21, CEOs of major U.S. low-cost carriers met with Transportation Secretary Sean Duffy. They urged Congress to consider temporary tax relief to offset the spike in jet-fuel costs caused by the Middle East conflict.
Last week, the Association of Value Airlines, a trade group representing Spirit Airlines, Frontier Airlines, Allegiant Air, Sun Country, and Avelo, sent a letter to U.S. congressional leaders. The group urged suspending the federal excise tax on air tickets at 7.5% and a $5.3 per-leg tax.
The association said exempting these taxes could offset about 30% of the added costs from higher jet fuel.
“If support is not provided, the pressure from higher fuel costs will push travel costs for passengers higher. Airlines may be forced to raise ticket prices and add-on services to cover the costs,” said Jonathon Freye, the association’s head.
The closure of the Hormuz Strait for nearly two months has driven global energy prices higher. Global crude prices have surged by almost 40% due to the conflict, pushing up gasoline, natural gas, electricity, and jet fuel prices.
North American airlines have raised baggage fees, reduced flights, and scaled back capacity expansion plans. Last week, Reuters reported that Spirit Airlines’ plan to emerge from bankruptcy was under renewed pressure as jet-fuel costs surged, affecting key assumptions in its restructuring.
European airlines are also facing difficulties. EasyJet said fuel costs in March rose by about 25 million pounds ($34 million). Bookings for year-end flights were down 2% versus 2025.
The International Energy Agency (IEA) warned last week that Europe only has enough aviation fuel for six weeks. It said this could have serious economic consequences in countries dependent on summer tourism.
Hà Thu (Reuters).
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