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Spirit Airlines entered Chapter 11 bankruptcy for the second time in 12 months back in August. Since then it has dropped routes, cut airports from its map altogether, and announced plans to furlough around 1/3 (about 1,800) flight attendants. Today, the low-cost carrier provided an update on some of the other initiatives it is taking to move through its latest restructuring.
The airline shared some major steps forward during a hearing before the US Bankruptcy Court for the Southern District of New York. The measures, designed to strengthen liquidity, streamline operations, and reduce costs, highlight Spirit’s focus on repositioning the airline for long-term stability and competitiveness.
Spirit has secured commitments for a multi-tranche debtor-in-possession (DIP) financing facility of up to $475 million from its existing bondholders. The arrangement, subject to court approval at a hearing scheduled for October 10th, will provide immediate and longer-term financial flexibility. Upon approval, Spirit expects to access $200 million immediately, ensuring continued support for day-to-day operations throughout the restructuring. In addition, the court has already granted Spirit interim access to $120 million in cash collateral to bolster short-term liquidity.
A key milestone in the restructuring is a newly negotiated agreement with AerCap Ireland Limited, Spirit’s largest aircraft lessor. The agreement includes:
- A $150 million payment from AerCap to Spirit.
- Rejection of 27 aircraft leases (projected to reduce operating expenses by hundreds of millions of dollars).
- Resolution of all outstanding claims and disputes between AerCap and Spirit.
- Commitment for the future delivery of 30 aircraft.
The AerCap agreement is also subject to court approval at the October 10th hearing. To further streamline its operations, Spirit received court approval to reject 12 airport leases and 19 ground handling agreements. These moves align with recently announced network adjustments and are part of Spirit’s broader strategy to rationalize its operations and reduce structural costs.
Spirit noted that active discussions with additional aircraft lessors are underway. Anticipated agreements are expected to provide new liquidity and accelerate further fleet rationalization. These measures are intended to produce substantial cost savings and rightsize the company’s business model. The company is also engaging with its principal labor unions to identify potential cost savings within collective bargaining agreements.
Dave Davis, President and Chief Executive Officer at Spirit Airlines, said:
These are significant steps forward in a short period of time to build a stronger Spirit and secure a future with high-value travel options for American consumers. While there’s more work to be done, we’re grateful to our stakeholders who have stepped up to support us during the restructuring. We remain focused on delivering a safe, reliable operation, and I’m incredibly proud of our Team Members for continuing to rise to the occasion and take great care of our guests.”
Anthony’s Take: The restructuring marks a pivotal moment for Spirit, as it works to balance short-term operational stability with long-term efficiency. The combination of fresh financing, reduced lease obligations, and a leaner fleet positions the airline to emerge from Chapter 11 more resilient, but Spirit still needs to find its place as the low-cost carrier model fades from popularity.
(Image Credits: Spirit Airlines.)
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Advertiser & Editorial Disclosure: The Bulkhead Seat earns an affiliate commission for anyone approved through the links above This compensation may impact how and where links appear on this site. We work to provide the best publicly available offers to our readers. We frequently update them, but this site does not include all available offers. Opinions, reviews, analyses & recommendations are the author’s alone, and have not been reviewed, endorsed, or approved by any of these entities.
