Spirit Airlines and AerCap reach an agreement, including a $150 million lifeline
In addition, Spirit Airlines will cancel 27 leases of aircraft that are currently with the airline.
Spirit Airlines and AerCap, which spurred the carrier to file its second Chapter 11 bankruptcy case in less than a year, have reached an agreement, which includes a $150 million liquidity infusion by the lessor into the airline.
In court filings published on September 30, 2025, Spirit Airlines disclosed that it had reached an agreement with AerCap.
“After weeks of negotiations with AerCap, AerCap has committed to a significant liquidity infusion, which will provide meaningful funding to [Spirit Airlines] in these Chapter 11 Cases and permit [Spirit Airlines] to operate [its] business.”
According to a filing signed by Fred Cromer, the Chief Financial Officer (CFO) of Spirit Airlines, the good-faith negotiations “at arm’s length with sophisticated counsel” resulted in the two parties solving their differences, which includes AerCap’s commitment to the $150 million liquidity infusion, providing significant funding to the airline while it finalizes and implements its business plan and “fleet rationalization process.”
In addition, the agreement will significantly reduce the airline’s expenses and resolve any claims and disputes between the pair. “[Spirit Airlines has] thus concluded that approval of the Global Restructuring Term Sheet is in the best interests of the estates.”
At the same time, AerCap could assert a general unsecured claim of $696.4 million against the carrier.
Cromer noted that AerCap is Spirit Airlines’ largest provider of leased aircraft, including 37 Airbus A320 family jets, 25 of which are the A320neos, fitted with the Pratt & Whitney PW1100G engines currently suffering from powder metal-related problems.
The CFO pointed out that when the airline declared Chapter 11 bankruptcy on August 29, 2025, Spirit Airlines had 38 grounded A320neo aircraft. These are “awaiting slots for engine repairs, and it could be more than two years before all repairs have been completed,” with Cromer highlighting "that nearly all 79 of its GTF engines will become grounded over the next two years due to these issues."
Planespotters.net data showed that Spirit Airlines has 91 A320neo aircraft, 43 of which are grounded. The powder metal issue has affected engines built between Q4 2015 and Q3 2021, according to a previous statement by Guillaume Faury, the Chief Executive Officer (CEO) of Airbus.
Spirit Airlines’ grounded A320neos had been delivered between October 2016 and July 2022.
In addition to the 37 aircraft currently utilized by the low-cost carrier, Spirit Airlines agreed to sale-and-leaseback (SLB) transactions for 36 A320neo family aircraft that were scheduled for delivery between 2027 and 2028.
As a result of the agreement with AerCap, Spirit Airlines would keep 10 leased aircraft, while ending leases on 27 aircraft, 19 of which are for A320neos that are currently placed with the airline. In terms of the 37 to-be-delivered Airbus jets, the number of aircraft was reduced to 30, and the delivery schedule was amended.
However, the adjusted delivery schedule remained confidential in the agreement, with Cromer stating that disclosure of any private information “could reasonably be expected to cause harm to [Spirit Airlines] and jeopardize [its] goals at a critical juncture in the Chapter 11 Cases in various ways.”
This includes providing “other aircraft counterparties” details about the airline’s “cost structure, negotiating positions, and fleet strategy,” which could jeopardize any future negotiations with AerCap or other aircraft lessors.
Secondly, any confidential information could reach its competitors, who have already pounced on the opportunity to go after its routes, who would have insight about the airline’s costs and strategy, something that Spirit Airlines does not have, resulting in “informational asymmetry.”
Lastly, AerCap could be unwilling to proceed with the agreement if the lessor were mandated to disclose public information about the lease agreements.
Cromer concluded that the court’s approval of the term sheet with AerCap would result in significant cost savings, resolve disputes while avoiding litigation, and a smaller aircraft fleet, which would shed “associated embedded maintenance and return costs.”
“The Global Restructuring Term Sheet, therefore, achieves the twin goals of realizing savings by optimizing the fleet count and shedding embedded maintenance and return costs and planes grounded.”
The filing noted that on August 25, 2025, AerCap informed Spirit Airlines “asserting certain events of default under the lease agreements” for the 36, terminating the lease agreements, with an identical notice being sent regarding the 37 already-leased aircraft.
Both default notices resulted in Spirit Airlines eventually filing for its second Chapter 11 bankruptcy reorganization, after the airline had exited its previous court-protected restructuring in March 2025.
Rytis Beresnevicius
On August 11, 2025, Spirit Airlines unveiled its Q2 2025 results, which, in addition to the $245.8 million net loss, showed that the company had $407.5 million of cash and cash equivalents, after burning through $249.6 million of cash for operations between March 13 and June 30, 2025.
When it presented its restructuring plans on August 29, 2025, one of Spirit Airlines' goals was to optimize its fleet to “match capacity with profitable demand in line with the redesigned network,” which was another goal outlined in the Chapter 11 bankruptcy announcement.
The other two pillars of its restructuring were addressing the airline's cost structure and responding to evolving customer preferences with new travel options, including Spirit First, formerly known as Go Big.
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