Spirit Airlines is moving deeper into its shutdown process, with the company now asking a bankruptcy court to approve a new $275 million financing agreement tied to the sale of part of its aircraft fleet. The latest filing marks another major step in dismantling the airline after failed bailout talks and months of financial collapse.
According to Pitchbook, Spirit’s parent company seeks approval for a new debtor-in-possession (DIP) financing package to facilitate the sale of 20 Airbus A320 and A321 aircraft to CSDS Asset Management. The planes were already approved for sale last month in a deal valued at roughly $553.5 million, but the airline says the financing is necessary to keep the process moving smoothly as it winds down remaining operations.
DIP financing is emergency funding used during Chapter 11 bankruptcy proceedings. It allows a company to continue operating or managing assets while restructuring or shutting down. In exchange for taking on significant risk, lenders are granted priority repayment status ahead of most existing creditors if the company liquidates.
Spirit said the financing would allow the company to focus on completing aircraft sales “in a more streamlined and efficient manner” while preserving value during the wind-down process.
The issue is more complicated than simply handing over the aircraft. Multiple lenders already hold financial claims tied to those planes, creating overlapping obligations that could delay or disrupt the sales.
Spirit told the court the new financing structure would help eliminate “cross default” and collateral complications that could interfere with closing deals and transferring aircraft to buyers on schedule.
Barclays will serve as the fronting lender, while Wilmington Trust will act as the administrative agent. A hearing on the request is scheduled for May 27.
The filing arrives just weeks after Spirit officially stopped flying following the collapse of negotiations for a proposed $500 million government bailout. That rescue package had been viewed as the airline’s final opportunity to survive after fuel prices surged earlier this year.
Before shutting down, Spirit had already reduced routes, laid off employees, and filed for bankruptcy multiple times in an attempt to stay afloat. The airline also struggled with aircraft grounded due to Pratt & Whitney engine issues and the fallout from its failed merger with JetBlue Airways.
