Judge OKs Spirit Airlines’ culling of 67 leased aircraft
Spirit Airlines' initial plan was to reject 87 leases.
The United States Bankruptcy Court for the Southern District of New York has approved Spirit Airlines’ plans to cull 67 leases, resulting in the airline reducing its fleet significantly. However, the airline previously asked the court to reject 87 leases for Airbus A320ceo, A320neo, and A321neo aircraft.
On October 21, 2025, the court overseeing Spirit Airlines’ second Chapter 11 bankruptcy case in less than a year approved the airline’s motion to reject leases for 67 Airbus aircraft, including their engines, related parts and equipment, and appliances.
The court noted that its approval was given after a hearing that included “appearances of parties in interest,” and after it concluded that the requested motion represented a “sound exercise of the [Spirit Airlines’] business judgment, and is in the best interests of the Debtors, their creditors, their estates, and all other parties in interest.”
The leases for the 67 aircraft, including four A320ceo, 60 A320neo, and three A321neos, will be rejected on October 27, and the aircraft are expected to be stored either at Phoenix Goodyear Airport (GYR) or Victorville Airport (VCV).
Lessors affected by the court’s decision include Air Lease Corporation (ALC, one aircraft), Airborne Capital Limited (one), Aircastle (four), Aviation Capital Group (nine), Avolon (four), Dubai Aerospace Enterprise (DAE, one), ICBC Leasing (three), Jackson Square Aviation (19), Merx Aviation (one), ORIX (two), SMBC Aviation Capital (21), and Vmo Aircraft Leasing (one).
They will have to pick up their aircraft ‘as-is, where-is.’ According to the court’s document, if lessors want to perform any independent audits on their aircraft, they could do so at their request and out of their own pocket, potentially also reimbursing Spirit Airlines for performing the inspection of an aircraft.
If an aircraft is able to fly a ferry flight, the low-cost carrier must “provide commercially reasonable assistance” to move the aircraft from either GYR, VCV, or its then-current location to “a reasonable location selected by the Lessor within the continental United States.”
Furthermore, Spirit Airlines will keep the insurance coverage and maintain the 67 aircraft for 15 days after October 27, or until a lessor claims its asset. Subsequently, insurance and maintenance coverage will end, unless the airline and the lessor can come up with an agreement.
If a lessor fails to retrieve its aircraft after the 15-day period, it would be “responsible to [Spirit Airlines] for the subsequent reasonable actual out-of-pocket costs of, and all risks attendant to, maintaining, insuring, and storing such equipment.”
Finally, if any of the leased aircraft and/or engines are not serviceable, Spirit Airlines is “under no obligation to repair [the aircraft and/or engines] to make [them] serviceable.”
When Spirit Airlines initially filed the motion in early October, the airline classified 87 aircraft, including 19 Airbus A320ceo, 65 A320neo, and three A321neos, as excess equipment, meaning that the airline was allowed to reject 20 fewer leases, affecting mostly A320ceo aircraft.
Still, the low-cost carrier got rid of its most troubling leases for A320neos, which are powered by the Pratt & Whitney PW1100G engine, that have been undergoing accelerated inspections after the engine maker disclosed a powder metal issue that affected specific engines in June 2023.
Previously, Guillaume Faury, the Chief Executive Officer (CEO) of Airbus, disclosed that the affected engines were built between Q4 2015 and Q3 2021.
Ch-aviation records showed that Airbus delivered 69 A320neo aircraft to Spirit Airlines between 2016 and 2022, with the carrier welcoming another 22 A320neos in 2023 and 2024.
When it filed for the motion to reject the leases, the airline’s Chief Financial Officer (CFO), Fred Cromer, said that the company’s goal of its court-protected restructuring is to “realize hundreds of millions of dollars in annual savings and lighten its balance sheet by shedding billions of dollars of liabilities,” with the airline being committed to redesigning its network.
“To do so, Spirit must right-size its fleet to match capacity with profitable demand, which will materially lower Spirit’s debt and lease obligations and realize hundreds of millions of dollars in annual operating savings.”
Rytis Beresnevicius
These are not the only leases that Spirit Airlines has rejected or adjusted. On October 10, the court approved an agreement with AerCap, which essentially forced the carrier to go into bankruptcy, that will result in a $150 million capital injection, the rejection of 27 aircraft leases, and the “resolution of all claims and disputes between the parties.”
When it filed the agreement for the bankruptcy court’s approval on September 30, Cromer said that as of August 29, it had 38 PW1100G-powered A320neo family aircraft, 25 of which were leased from AerCap, “that are grounded and awaiting slots for engine repairs, and it could be more than two years before all repairs have been completed.”
“In addition, Spirit expects that nearly all 79 of its GTF engines will become grounded over the next two years due to these issues.”
At the same time, Spirit Airlines has kept some of its leased aircraft, or at least intends to. In a court filing on October 17, it requested the judge overseeing the case to accept its agreement with Carlyle Aviation Management to extend the lease agreements as well as reduce monthly leasing payments for five A320ceo aircraft.
The lessor would also be obliged to cover a confidential number of millions of dollars during the quintet’s next engine Performance Restoration Shop Visits (PRSV).
Rytis Beresnevicius
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