The United States Bankruptcy Court for the Southern District of New York has allowed Spirit Airlines
to sell an initial batch of Airbus A320ceo aircraft to GA Telesis, which had an agreement to buy a total of 23 A320ceo and A321ceos with Spirit Airlines.
Initial sale
According to the filing, which was presented on November 27, the court allowed Spirit Airlines to sell an initial five aircraft to GA Telesis, a US-based aerospace asset manager, after reviewing all documents related to the airline’s Chapter 11 proceedings.
“[…] The Court having found that the relief requested in the Motion represents a sound exercise of the Debtor’s [Spirit Airlines – ed. note] business judgment, and is in the best interests of the Debtor, its creditors, its estate, and all other parties in interest; and the Court having determined that immediate relief is necessary to avoid immediate and irreparable harm to the Debtor and the Debtor’s estate […].”
Photo: Vincenzo Pace I Simple Flying
While the court allowed the airline to ship off five aircraft to GA Telesis, any further transactions related to the two companies’ agreement would have to be sanctioned by the US Bankruptcy Court for the Southern District of New York.
Furthermore, any creditor that had any encumbrances on or against the quintet could take action to release their claims, according to the document. Following the closing date for any of the five aircraft, no creditor may claim any encumbrances in this Chapter 11 case, the court emphasized.
A final hearing will be held on December 17. If no objections or responses are filed and served, the court will give its final approval for the transaction to take place.
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October agreement
Spirit Airlines and GA Telesis announced the sale of the 23 A320ceo
and A321ceo aircraft on October 24, with the latter paying the former $519 million for the assets.
The carrier disclosed that its net proceeds from the sale, which included discharging any aircraft-related debt from its balance sheet, will add $225 million to its liquidity through the end of 2025.
Photo: The Global Guy | Shutterstock
At the time, the airline said that the aircraft would be delivered to GA Telesis between October and February 2025. In its statement, the asset manager highlighted that this was its largest-ever purchase of non-leased aircraft of such vintages, with Spirit Airlines welcoming the 23 between 2014 and 2019.
A separate court document shed more light on the aircraft that would be sold to GA Telesis, including their manufacturer serial numbers (MSN). Spirit Airlines will be shipping off 15 A320ceo and eight A321ceos
, with only two A320ceo aircraft being built in 2019.
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The deal should improve Spirit Airlines’ liquidity by $225 by the end of 2025.
Delivering aircraft to Pheonix
Some aircraft have already been removed from the airline’s operations, including the first A320ceo on the list, registered as N694NK. Flightradar24 data showed that on October 18, Spirit Airlines ferried the A320ceo from Fort Lauderdale-Hollywood International Airport
(FLL) to Phoenix Goodyear Airport (GYR), with the aircraft completing a single test flight at Goodyear Airport since.
Other A320ceo and A321ceos, including airframes registered as N638NK, N632NK, N657NK, N650NK, N647NK, N658NK (A321ceo), N696NK, N695NK, N681NK (A321ceo), N675NK (A321ceo, not yet sent to Pheonix-Goodyear, parked at Orlando International Airport
(MCO) since November 23), and N674NK (A321ceo), have shared the same fate.
Photo: YES Market Media | Shutterstock
Out of the 23 aircraft that Spirit Airlines plans to sell to GA Telesis, 12 still have scheduled flights on or beyond November 28. One of the dozen’s airframes, an A320ceo, registered as N693NK, has remained at Detroit Metropolitan Wayne County Airport
(DTW) since it arrived there on November 27 with no scheduled flights so far, Flightradar24 records showed.
Spirit Airlines announced that it has filed for voluntary Chapter 11 bankruptcy proceedings on November 18, with the airline already having secured a restructuring support agreement (RSA) with a majority of its creditors.
If approved, the RSA will result in creditors exchanging their debt for equity in Spirit Airlines, with the low-cost carrier also securing a debtor-in-possession (DIP) financing agreement.
The carrier’s chapter 11 announcement, filed with the US Securities and Exchange Commission (SEC), revealed that Spirit Airlines wants to become a more premium airline post-bankruptcy. It will target premium leisure travelers while aiming to remain the cost leader in the US airline industry.
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