WASHINGTON, May 2 (Reuters) - U.S. Transportation

Secretary Sean Duffy said Saturday he does not think the

government needs to bail out low-cost airlines that have sought

$2.5 billion in government relief because of high jet fuel

prices.

"I would say that at this point, I don't think it's

necessary. They do have access to cash. If they want to come to

the U.S. government, we would be a lender of last resort. If

they can find dollars in the private markets -- I think that's

better for them," Duffy said at a press conference at Newark

airport after the collapse of budget carrier Spirit Airlines.

He said the prospect of a Spirit bailout was seen as an

opportunity by some other airlines to get money "not necessarily

based on need, but based on opportunity."

On Monday, a group of U.S. budget airlines, including

Frontier and Avelo, said it had proposed exchanging

warrants that could be converted into equity ​stakes for $2.5

billion in U.S. government assistance.

The Association of Value Airlines confirmed it asked

President Donald Trump's ​administration to create a $2.5

billion liquidity pool, used exclusively to offset incremental

fuel ​costs "as a necessary and targeted measure to stabilize

operations and keep airfares ⁠affordable during this period of

volatility."

They have also asked Congress 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.

The pitch highlights one of the unintended consequences of

the U.S.-Israeli war ​on Iran: a surge in jet fuel prices that

has roughly doubled costs, squeezing margins and pushing ‌weaker

airlines ⁠closer to the brink.

The chief executives of ‌several low-cost carriers met with

Duffy and Federal Aviation Administration chief Bryan Bedford in

Washington last week to discuss the proposal.

The group arrived at the $2.5 billion figure by estimating

how much more it expects to spend on jet fuel this year

​compared with earlier forecasts.

Airlines for America, which represents major U.S. passenger

airlines, opposed a bailout for budget carriers, saying

"government intervention on behalf of those airlines would

punish other airlines that have engaged in self-help in order to

deal with increased costs and reward airlines who haven't made

those tough decisions. That's not a level playing field."

The group added that in the long-term, sustaining businesses

unable to earn their cost of capital harmed competition and

consumers by making it more difficult for other airlines to

compete and attract private sector capital.