US budget carrier Spirit Airlines has secured bankruptcy court approval for debtor-in-possession financing of up to $475 million, as well as approval for a broad fleet restructuring pact with lessor AerCap.
Spirit states that the court approvals are an “important milestone” in its re-organisation effort under Chapter 11 bankruptcy protection.
The financing – including $200 million immediately available – will provide “financial flexibility” to support the beleaguered carrier’s business while the re-organisation is carried out.
Its fleet restructuring with AerCap includes the rejection of 27 aircraft leases, comprising 19 A320neos and eight A321neos.
The court documentation also details 36 undelivered leases for aircraft which would have been placed with Spirit over two years, from the first quarter of 2027 to the fourth quarter of 2028.
These undelivered aircraft comprise seven A320neos and 29 A321neos.
But AerCap and Spirit will instead enter 30 new lease agreements, on identical terms as these undelivered leases, covering aircraft deliveries spread equally across 2027, 2028 and 2029.
According to the documentation, Spirit will amend its Airbus purchase agreement by removing 52 firm aircraft orders and up to 10 options.
AerCap will amend its own purchase agreement with Airbus to add an “agreed-upon number” of firm and optioned aircraft to its backlog.
These amendments are linked to a $150 million liquidity payment by AerCap to Spirit.
Spirit says the agreements will allow it to reduce operating costs by “hundreds of millions” of dollars and provide for the future delivery of 30 aircraft.
It adds that it “continues to make progress” with other lessors as part of its fleet optimisation.
“With these approvals in place, we are better equipped to build a stronger airline that delivers unmatched value to American consumers,” says Spirit chief executive Dave Davis.
Spirit will also assume leases for 10 A321neos which were subject to lease agreements in September 2021.
