A US bankruptcy court has approved Spirit Airlines’ proposed sale of two gates it leases at Chicago O’Hare International airport to American Airlines for $30 million.
A 15 December court filing related to Spirit’s Chapter 11 bankruptcy proceedings shows that the ultra-low-cost carrier (ULCC) has agreed to transfer a pair of gates – G8 and G10 – to American, along with 84m (276ft) of linear frontage and associated gate ramp.
Spirit will hold onto the remaining two gates it leases at O’Hare. It has been leasing gates at Chicago’s main hub since 2018.
The cash infusion will be used to pre-pay Spirit’s debtor-in-possession loans, perhaps buying more time to show creditors that it is a stable standalone operation moving forward.
The transaction was approved by the US Bankruptcy Court for the Southern District of New York, according to the 15 December filing.
Efforts to sell-off Spirit’s airport assets in Chicago reflect the ULCC’s diminished operations there, as well as its beleaguered financial state. Amid its second Chapter 11 bankruptcy in one year, the carrier has recently been dogged by speculation of an operational shutdown – though it has thus far defied those predictions and maintains it will find a new path forward.
On 14 December, Spirit reached an agreement with noteholders to amend its debtor-in-possession credit agreement, providing early access to $50 million of a planned $100 million funding round. That funding is an essential lifeline that will support continued operations.
Spirit has a creditor hearing scheduled for 17 December that could prove critical for its future prospects. Whether it can access the $50 million remaining in its third funding round hinges on ”further progress on a standalone plan of reorganisation or a strategic transaction”.
”Spirit is currently in active negotiations on each of these possibilities,” it said on 15 December.
The US airline industry is waiting to see whether such a “strategic transaction” could mean a combination with another carrier. Frontier Airlines, now undergoing a leadership change following the sudden departure of longtime chief executive Barry Biffle, remains the most-likely suitor.
