A Spirit Airlines Airbus A320 taxis at Los Angeles International Airport after arriving from Boston on September 1, 2024 in Los Angeles, California.
Kevin Carter | Getty Images News | Getty ImagesWHITE PLAINS, N.Y.
— Spirit Airlines is making "massive gress" to revitalize the airline, the carrier's restructuring lawyer Marshall Huebner said in a court hearing Tuesday.The struggling budget airline has reached an agreement with some of its debtholders for up to $475 million in debtor-in-possession financing, as well as $150 million from a major aircraft lessor, Huebner said.
The agreements are subject to court apval.Spirit last month filed for its second Chapter 11 bankruptcy tection in less than a year after high costs, weaker demand and a host of other lingering blems drove more than $250 million in losses from when it emerged from its first bankruptcy in March through June.The carrier has been racing to cut costs and recently announced plans to cut 40 routes and furlough one-third of its flight attendants.
The airline is in talks with its pilots' union and is seeking $100 million in cuts from that group.Read more CNBC airline newsTrump administration orders Delta, Aeromexico to unwind joint venture by Jan.
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It dependsHuebner, a partner at Davis Polk & Wardwell, said in U.S.
Bankruptcy Court on Tuesday that people who are pessimistic the struggling carrier's turnaround spects should "say less" and observe what it's doing.Spirit is planning to reject leases on 27 Airbus narrow-body aircraft from Ireland-based leasing giant AerCap, 25 of them airplanes that are grounded or will be grounded for inspection due to a Pratt & Whitney engine defect, Huebner said in court.
AerCap will pay Spirit $150 million as part of the agreement, under which Spirit would still plan to take dery of 30 more airplanes, the company said.Aercap didn't immediately on the plan.Spirit is also planning to reject 12 airport leases and 19 ground handling agreements as the carrier shrinks to cut costs.Another hearing is scheduled for Oct.
10.
If the debtor-in-possession financing is apved, $200 million would be available immediately."These are significant steps forward in a short period of time to build a stronger Spirit and secure a future with high-value travel options for American consumers," Spirit CEO Dave Davis said in a news release later Tuesday.
"While there's more work to be done, we're grateful to our stakeholders who have stepped up to support us during the restructuring."