There was growing enthusiasm for a one-year moratorium from the federal tax on jet fuel to save the ailing US airlines $600 million.
Industry officials are making their case to the US Congress this week at Senate hearings.
US airline losses this year could reach $10 billion, estimated the Air Transport Association.
US Transportation Secretary Norman Mineta said the rebate idea was worth looking at but added the Bush Administration has yet to formulate a policy on tax breaks for airlines.
“There simply is no rational business plan we can continue to operate under with fuel at the price it is today,” Jim May, head of the Air Transport Association, told CNBC.
The federal gas tax is set at 4.3 cents a gallon on jet fuel.
If fuel prices had stayed where they were last year, the airlines would have been profitable, according to consultant Mike Boyd.
Report by David Wilkening
