Spirit Airlines on the right track for a 475 million US dollar bankruptcy

A Spirit Airlines Airbus A320 Taxis at Los Angeles International Airport, after arriving from Boston on September 1, 2024 in Los Angeles, California.

Kevin Carter | Getty Images News | Getty pictures

White Plains, NY – Spirit Airlines makes “massive progress” to revive the airline, said the airline’s restructuring lawyer, Marshall Huebner, in a court hearing on Tuesday.

The fighting budget airline has hit some of its death applicants through the financing of debtors of up to $ 475 million, a lifeline with which bankrupt companies can continue to operate, and $ 150 million from a large aircraft soft, said Huebner. The agreements are subject to the approval of the Court of Justice.

Last month, Spirit used his second chapter 11 insolvency protection in less than one year after high costs, weaker demand and a variety of other persistent problems with more than 250 million US dollars in losses from the time of its first bankruptcy in March to June.

The airline has reduced the costs of the costs and recently announced plans to reduce 40 routes and about a third of its flight attendants. The airline is in discussions with the pilot union and is recently looking for $ 100 million reductions in this group. Last month Spirit said that the entire $ 275 million was down in its revolver.

Huebner, partner at Davis Polk & Wardwell, said on Tuesday before the US insolvency court that people who are pessimistic about the prospects of the fighting freight forwarder should “say less” and observe what it is doing.

Spirit said on Tuesday that it is now an immediate access to liquidity of $ 120 million after an application for cash security has been used.

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Spirit plans to reject rental contracts on 27 Airbus focal body aircraft from the leasing giant based in Ireland Aercap25 of them aircraft that are grounded or are grounded for inspection due to A Pratt & Whitney Motoral error, said Huebner in court. Aercap will pay Spirit 150 million US dollars as part of the agreement, according to which the spirit would still take over 30 aircraft, the company said.

Aercap did not comment on the plan immediately.

Spirit said it was also planned to reject 12 airport lease contracts and 19 grounds agreements if the airline shrinks to reduce the costs of a plan that the court approved.

Another hearing is planned for October 10th. If the debtor’s ownership is approved, $ 200 million would be available immediately.

“These are important steps in a short time to build a stronger spirit and to secure a future with high -quality travel options for American consumers,” said Dave Davis, CEO of Spirit, later on Tuesday in a press release. “Although there is more work to do, we are grateful to our stakeholders, who supported us during the restructuring.”

According to the court registration, the high -ranking secured notes at Spirit include Citadel Americas, ARES Management, Alliancebernstein, Arena Capital Advisors and Pacific Investment Management Company.

Competitor of the mind United airlinesPresent Frontier AirlinesPresent Jetblue Airways And Allegian Airlines have announced new routes in the hope of capturing the customers of Spirit. The CEO of United, Scott Kirby, went one step further and said at the beginning of this month that he expected the spirit to go out of business.

Spirit has to fight for years with a motor recall, a failed acquisition by jetblue, higher costs and a shift in consumer taste for high -quality offers. The airline based in Dania Beach, Florida, has changed its business strategy to offer higher products in recent months.