Spirit Airlines Cancels Airbus Order in Settlement with AerCap
Key Takeaways
- Spirit cancels order for 52 Airbus planes, settles dispute with AerCap
- AerCap to inject $150 million into Spirit, gets $572 million claim
- Spirit forfeits $9.7 million, signs new leases for 30 Airbus aircraft
- Airline to furlough 1,800 flight attendants, shrink fleet by nearly 50%
Spirit Airlines has reached a major settlement with aircraft lessor AerCap that cancels its commitment to purchase 52 Airbus planes while securing new lease agreements and financial support as the airline navigates bankruptcy proceedings.
Bankruptcy Court Approves Comprehensive Settlement
The U.S. Bankruptcy Court for the Southern District of New York approved the agreement on Friday, resolving a dispute that pushed Spirit into its second bankruptcy. The conflict began in late August when AerCap unexpectedly terminated lease agreements for 36 new Airbus A320neo family jets scheduled for delivery between 2027-2028.
AerCap also claimed default on leases for 37 aircraft already in Spirit’s operational fleet. While Spirit disputed these claims, the threat to its current and future fleet forced the airline to seek bankruptcy protection.
Financial Terms of the Agreement
Under the settlement, Spirit will reject 27 of its 37 aircraft leases with AerCap. The Irish leasing giant will retain $9.7 million in cash security deposits Spirit provided for the canceled leases.
More significantly, AerCap received permission to file an unsecured claim of up to $572 million against Spirit, though the actual recovery amount remains uncertain. In return, AerCap will inject $150 million into the bankrupt airline.
New Fleet Arrangements
Spirit will surrender all rights to the 36 undelivered jets but will sign new lease agreements for 30 new Airbus A320 or A321 aircraft. Deliveries will be spread equally across 2027, 2028, and 2029.
The airline stated the agreement will reduce operating costs by “hundreds of millions of dollars” as part of its broader restructuring efforts.
Additional Financing and Cost-Cutting Measures
Separately, the court approved a debtor-in-possession (DIP) financing facility of up to $475 million from Spirit’s existing bondholders, with $200 million immediately available.
The cost reduction plan includes furloughing approximately 1,800 flight attendants—about one-third of its cabin crew—effective December 1. Spirit, which currently operates 214 aircraft, plans to shrink its fleet by nearly 100 planes, representing almost half of its current fleet size.
The settlement marks a critical step in Spirit’s bankruptcy reorganization, providing both immediate financial relief and a restructured fleet plan for future operations.
