Spirit Airlines wins court approval for $475M financing and AerCap settlement

Spirit Airlines has secured US Bankruptcy Court approval for a $475 million debtor-in-possession financing facility and a key settlement with its largest aircraft lessor, AerCap. The approvals mark a major step in the airline’s ongoing Chapter 11 restructuring. 

The financing is provided by Spirit’s existing bondholders, with $200 million immediately accessible to support operations during the reorganization. 

Under the approved agreement with AerCap, the lessor will pay Spirit $150 million, Spirit will reject leases on 27 AerCap aircraft, and all outstanding claims between the parties will be resolved. The deal is part of Spirit’s effort to reduce fixed costs and simplify its fleet. 

Debtor in possession financing is a form of funding available to companies under bankruptcy protection that allows them to continue operating while they reorganize. In Spirit’s case, the court-approved financing will help ensure the airline can meet payroll, pay vendors, and maintain regular flight schedules as it works through the restructuring process. 

The approval comes amid sweeping cost-cutting measures and fleet changes already under way at Spirirt. The budget carrier plans to shrink its fleet by nearly 100 jets from about 214 currently in service, one of the largest scale-backs by a US carrier in recent history. The reductions are aimed at aligning capacity with demand and improving cash flow during the restructuring period. 

Spirit has also begun shrinking its network. The airline plans to cut its November 2025 schedule by roughly 25 percent, with exits from several airport markets including Minneapolis-Saint Paul (MSP) in Minnesota and Hartford-Bradley (BDL) in Connecticut. Those cuts are part of a broader fleet optimization plan to reduce operating costs and restore profitability. 

Spirit’s financial troubles have been building for more than a year. The company has struggled under intense competition in the ultra-low-cost segment, where rivals such as Frontier and Allegiant continue to undercut fares while expanding service. Fuel prices have remained elevated, and maintenance costs on its all-Airbus fleet have risen faster than expected. 

Spirit also faced a major setback when the US Department of Justice successfully blocked its proposed merger with JetBlue Airways earlier in 2025. The deal would have provided a lifeline by creating a stronger combined carrier, but the court’s decision left Spirit to restructure on its own. 

By mid-2025, Spirit’s balance sheet had deteriorated sharply, with growing lease liabilities and limited access to new financing. The company filed for Chapter 11 protection in late August 2025, seeking to renegotiate lease terms, lower debt, and stabilize cash flow while maintaining normal flight operations. 

The newly approved financing and AerCap settlement give Spirit the liquidity needed to continue serving passengers and paying employees as the restructuring progresses. The airline said the AerCap agreement alone will reduce its operating costs by hundreds of millions of dollars and provide for the future delivery of 30 new aircraft. 

Spirit continues to negotiate with other lessors to modify lease terms as part of its fleet rationalization strategy. Company officials have emphasized that these actions are designed to create a smaller, more efficient operation capable of sustaining profitability in the US market. The post Spirit Airlines wins court approval for $475M financing and AerCap settlement appeared first on AeroTime.

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