Buttressed by a new round of financing, Spirit Airlines’ trip through U.S. Bankruptcy Court just got easier.
Spirit Aviation Holdings, Inc., parent company of the Dania Beach-based budget carrier, announced it received approval Friday from the court in the Southern District of New York for up to $475 million in debtor-in-possesion financing from its existing bondholders.
The company also won court approvals for a complex agreement with AerCap Ireland Limited, its largest aircraft lessor, to restructure an array of leases in a move that will funnel $150 million to the airline and end leases on 27 planes.
“These approvals mark an important milestone in the Company’s ongoing Chapter 11 restructuring to position Spirit for the future,” the company said in a prepared statement. Of the total financing, $200 million is “immediately available” to the company.
The AerCap deal resolves “all claims and disputes” between Spirit and the leasing firm. It also allows Spirit to cut operating costs “by hundreds of millions of dollars and provides for the future delivery of 30 aircraft. The company continues to make progress with other lessors as it pursues its fleet optimization strategy.”
The airline previously announced it intends to drop a total of 87 planes from the fleet of 214 Airbuses it was operating prior to filing for Chapter 11 protection on Aug. 29. The filing was the second one within a year for the company.
“We are pleased to have reached another significant milestone in our restructuring, which represents continued progress toward securing a successful future for Spirit,” said Dave Davis, president and chief executive officer. “With these approvals in place, we are better equipped to build a stronger airline that delivers unmatched value to American consumers. We thank our stakeholders for their support and the Spirit team for their dedication and resilience during this process.”
