Struggling low-cost carrier Spirit Airlines secured a major victory in bankruptcy court on Friday as it continues its latest Chapter 11 restructuring process.
The court officially awarded the airline $475 million in funds from its existing bondholders to keep its operations up and running. The cash infusion, which was first announced by the airline at the beginning of October but not yet approved by the court, will be an essential lifeline for Spirit, which stated last quarter it sorely needed more liquid assets.
In addition to the $475 million influx, the carrier also received court approval to proceed with a tentative deal to cancel 27 aircraft leases with Irish aviation company AerCap, its largest aircraft lessor.
That agreement includes a $150 million payment from AerCap to Spirit, for another increase to the carrier’s coffers. Additionally, the deal allows for Spirit to reduce operating costs by hundreds of millions of dollars, the airline said.
"We are pleased to have reached another significant milestone in our restructuring, which represents continued progress toward securing a successful future for Spirit," said Dave Davis, Spirit’s president and CEO. "With these approvals in place, we are better equipped to build a stronger airline that delivers unmatched value to American consumers. We thank our stakeholders for their support and the Spirit team for their dedication and resilience during this process."
In early September, Spirit entered its second bankruptcy restructuring in less than one year. Since then, the airline has been drastically slashing operations to help slim its costs and shore up its bottom line.
In recent months, the carrier slashed its November flight schedule by 25%, furloughed hundreds of pilots, and is now looking to leave about a dozen U.S. airports.
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