Move FM Global News

DANIA BEACH, Florida: Spirit Airlines has arranged up to US$475 million in new financing from existing bondholders to help keep its operations running during its latest bankruptcy restructuring, the carrier’s parent company said.

The deal comes just weeks after Spirit filed for Chapter 11 protection for the second time in a year, admitting that its earlier reorganization failed to provide a lasting turnaround. The U.S. Bankruptcy Court for the Southern District of New York will review the financing request, with $200 million available immediately if approved at a hearing scheduled for Oct. 10.

Spirit also has interim access to $120 million in liquidity, which gives the low-cost carrier more room to fund daily operations.

As part of the restructuring, Spirit reached a settlement with aircraft lessor AerCap Holdings to reject leases on 27 planes. AerCap will pay Spirit $150 million as part of the deal, which also resolves a dispute over a contract covering 36 Airbus jets scheduled for delivery in 2027 and 2028.

The bankruptcy court has additionally approved Spirit’s move to exit 12 airport leases and 19 ground handling agreements, part of its effort to shrink its footprint and cut costs.

The airline has already begun scaling back its network. Last week, it announced it would halt 40 routes, underscoring the pressure on its business model as higher fuel prices, intense competition, and softer travel demand weigh on margins.