The court approved an agreement between Spirit and AerCap Ireland, its largest aircraft lessor. Under this agreement, AerCap will pay $150m to Spirit.
The terms provide for the rejection of 27 aircraft leases while settling all outstanding claims and disputes between Spirit and AerCap.
Spirit Airlines will cancel its commitment to procure 52 Airbus aircraft along with the options for 10 more.The aircraft order will now be taken over by aircraft leasing company AerCap.
This three-way agreement is part of a dispute settlement between Spirit and AerCap, which was approved by the US Bankruptcy Court for the Southern District of New York.
Could have been the ideal deal when in year 2022, the Frontier Group Holdings offered to acquire Spirit with the aim of creating the fifth-largest carrier in the US. However, Spirit rejected the bid, saying it was less favourable to shareholders than its own reorganization plan.
The financial struggle by Spirit Airlines have forced the carrier to scale back its operations amid Bankruptcy filing, twice in quick succession. Additionally as a cost-cutting measure, Spirit aims to reduce its fleet by nearly 100 aircraft, effectively downsizing it’s fleet by almost half.
Now it's October 2025, and Irish aircraft leasing company AerCap is taking over a commitment to buy 52 Airbus planes, along with its options for 10 others, after US airline Spirit rejected its Airbus agreement to the purchase.
This revised agreement between Airbus, AerCap and Spirit Airlines is part of a dispute settlement between Spirit and AerCap, which was approved by U.S. Bankruptcy Court for the Southern District of New York on Friday.
In a press release, Spirit Aviation Holdings said that ,
Spirit Aviation Holdings, Inc., parent company of Spirit Airlines, LLC ("Spirit" or the "Company"), today announced it has received approval from the U.S. Bankruptcy Court for the Southern District of New York (the "Court") for a multi-tranche debtor-in-possession ("DIP") financing facility of up to $475 million from its existing bondholders. In addition, Spirit has received Court approval for the agreement with AerCap Ireland Limited ("AerCap"), its largest aircraft lessor. These approvals mark an important milestone in the Company's ongoing Chapter 11 restructuring to position Spirit for the future.
The conflict with the world's largest aircraft leasing company was the trigger for pushing Spirit into its second bankruptcy.
Two months back, to the shock of the beleaguered carrier, AerCap decided to terminate the lease agreements for 36 new Airbus A320neo family planes those were waiting to be delivered to Spirit Airlines between 2027 and 2028. The lessor also claimed default on the leases for 37 aircraft already in the carrier's operational fleet.
Spirit disputed the validity of AerCap's claims. But with access to a large portion of its current and future fleet jeopardised, the company was forced to seek bankruptcy protection.
As part of the settlement between the two companies, Spirit will reject 27 out of the 37 leases it holds. AerCap, meanwhile, was granted permission to keep and use $9.7m (€8.4m) in cash security deposits that Spirit provided for the canceled aircraft leases.
The Irish leasing giant has also been granted permission to file a total unsecured claim of up to $572m (€493.8m) against Spirit. It is not clear yet how much it will be able to collect on that claim.
Spirit will give up all its rights to the 36 Airbus A320 planes, yet to be delivered. Additionally, it will sign new lease agreements with AerCap for 30 new Airbus A320 or A321 airplanes for deliveries spread equally across 2027, 2028 and 2029.
In an effort to help Spirit stabilize its operations, AerCap has committed to a cash injection of $150 million into the bankrupt airline. This financial support will help Spirit Airlines strengthen its position as it works to recover from its bankruptcy and restore its fleet to serviceable levels.
Spirit president and CEO Dave Davis said:
“We are pleased to have reached another significant milestone in our restructuring, which represents continued progress toward securing a successful future for Spirit.
“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.”
In addition to the agreement with AerCap, Spirit Airlines also secured a separate financing facility approved by the U.S. Bankruptcy Court.
The debtor-in-possession (DIP) financing facility provides Spirit with up to $475 million in funds from its existing bondholders. Of this total, $200 million is immediately available to the airline to support its ongoing operations.
The DIP financing will provide Spirit Airlines with the necessary liquidity to continue operating during its bankruptcy proceedings and to fund its restructuring efforts.
In a statement, Spirit said the agreement allows it to reduce operating costs by hundreds of millions of dollars.
Spirit has also decided to furlough approximately 1,800 flight attendants, about one-third of its cabin crew, effective December 1 this year.
