Spirit Airlines has won approval for a $475 million financing package and a $150 million payment from its largest aircraft lessor, AerCap, as the budget carrier struggles to stabilize operations following its second bankruptcy since November.
The U.S. Bankruptcy Court for the Southern District of New York approved the debtor-in-possession (DIP) financing, a crucial lifeline that will allow the airline to keep operating while restructuring. Spirit said $200 million of the funds will be immediately available.
The airline will also reject 27 aircraft leases as part of its cost-cutting plan. Spirit has already announced dozens of route cuts, plans to shrink its fleet, and a move to furlough about one-third of its flight attendants. It is also in talks with its pilots’ union, seeking around $100 million in savings.
“We are pleased to have reached another significant milestone in our restructuring, which represents continued progress toward securing a successful future for Spirit,”
— Dave Davis, CEO of Spirit Airlines
Spirit’s financial troubles have been mounting in recent years — from an engine recall and failed JetBlue merger, to rising labor costs and a shift in traveler preferences toward more premium experiences.
In an effort to reinvent itself, Spirit has been introducing roomier seating and fare packages beyond its traditional ultra-low-cost model, aiming to appeal to passengers seeking value without sacrificing comfort.
