Settlement With AerCap Ditches Previous Commitment to 52 Airbus A320neo Jets

Spirit has inked a major settlement with its largest aircraft lessor, AerCap, that terminates a previous order for 52 Airbus A320neo family aircraft. The decision comes as the low-cost carrier works through its second round of Chapter 11 restructuring and takes any and all opportunities to save cash.

"We are pleased to have reached another significant milestone in our restructuring, which represents continued progress toward securing a successful future for Spirit," said President and CEO Dave Davis. "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."

The deal ends months of tension between Spirit and AerCap, which had previously tried to terminate leases for 36 future jets and declared defaults on nearly 40 more already in service. Under the new arrangement, AerCap takes over the canceled orders (and options for 10 more), while Spirit sheds 27 aircraft leases and prepares to shrink its fleet by nearly 100 aircraft overall. The airline is hoping that it can survive on the smaller fleet until its funds allow otherwise.

Spirit’s second Chapter 11 filing follows a predictable mix of turbulence, including heavy debt, lingering pandemic effects, and soaring operating costs that drained the budget carrier all the way to empty… twice. The AerCap deal comes with a $150 million payment to Spirit, resolving all claims between the two parties.

The carrier also secured court approval for up to $475 million in debtor-in-possession financing, $200 million of which is available immediately. The goal, executives say, is to keep day-to-day operations running and stabilize the company long enough to emerge from Chapter 11 with at least a few yellow airplanes still flying.

FMI: www.spirit.com