Spirit Airlines is understood to be considering raising debt to finance some of its upcoming Airbus A320 family deliveries, say attendees at the International Society of Transport Aircraft Trading (ISTAT) Americas conference in San Diego.
A move into debt markets would be “natural” for the Miramar, Florida-based low-cost carrier as it only leases aircraft currently, lenders and lessors say.
A mixed portfolio with various types of aircraft financings, including leased, debt financed and unencumbered aircraft, is generally considered prudent financial practice for airlines.
“I think that would be a very sensible move,” says Doug Greco, vice-president of sales finance at Airbus Americas, at ISTAT.
Spirit would likely have easy access to the bank debt market immediately but a capital markets deal would require a rating from at least one of the major rating agencies.
At the end of 2013, Spirit had sale and leaseback deals in place for seven of its 11 A320 deliveries in 2014, according to a recent stock exchange filing. A January deal with SMBC Aviation Capital for four A320 aircraft is understood to cover the balance its deliveries during the year.
The carrier does not have financing or lease commitments in place for its 11 A320 and two A321 deliveries in 2015, the filing shows. It has a lease commitment for its one A320neo delivery during the year.
Spirit had 54 aircraft in its fleet at the end of 2013, according to its latest fleet plan.
Source: Cirium Dashboard