Spirit Airlines has won a crucial battle in its Chapter 11 bankruptcy, locking in approval to borrow up to $275 million in emergency funds as it prepares to cut leases on dozens of jets and exit several U.S. markets.
On Monday, U.S. Bankruptcy Judge Sean H. Lane in New York gave interim approval for Spirit to tap cash from its revolving credit facility, revenue earned during the case, and foreign accounts. The judge described access to liquidity as “obviously necessary” for the airline’s survival.
A $275M Lifeline to Keep Planes Flying
Spirit’s attorney Darren S. Klein told the court that the freed-up liquidity represents “unencumbered” funds, separate from cash pledged as collateral for secured lenders. For now, Spirit agreed not to touch those restricted accounts but left open the possibility of requesting debtor-in-possession financing later.
This infusion of cash will allow the Florida-based carrier to keep operating while it decides which aircraft leases and contracts to reject. Spirit currently leases 214 Airbus planes but plans to shed dozens of them to stabilize its finances.
