Spirit Airlines Sells 25 Aircraft To Reduce Debt
- Spirit Airlines sells 25 planes to meet debt repayments, generating $419 million in net cash proceeds.
- The sale and leaseback agreement will help the carrier repay approximately $465 million in debt related to the aircraft.
- Spirit Airlines has a fleet of over 200 A320-family aircraft and plans to retire its A319s by the end of 2025.
Spirit Airlines has sold 25 aircraft as part of a sale and leaseback agreement to help it meet debt repayments.
Spirit sells off 25 planes
According to a filing with the US Securities and Exchange Commission (SEC) last week, Spirit Airlines has completed the sale and leaseback of 25 of its aircraft. The all-Airbus A320-family carrier is saddled with debt and recently announced a net loss of over $157 million for Q3 2023.
The sale will be used to repay approximately $465 million in debt payments related to said aircraft, with net cash proceeds of around $419 million generated through the sale – if you do the math, that works out at just over $16.75 million per plane.
The SEC filing said,
“On January 3, 2024, Spirit Airlines completed a series of sale-leaseback transactions with respect to 25 aircraft, resulting in repayment of approximately $465 million of indebtedness on those aircraft and net cash proceeds to the Company of approximately $419 million.”
Spirit has not revealed which specific aircraft are involved in the deal. The ultra-low-cost carrier (ULCC) has previously resorted to sale and leaseback agreements with lessors to free up capital, including deals with Avolon, GECAS (before its acquisition by AerCap), and an agreement last year with Aircraft Leasing & Management (ALM) over five A320neos.
The Spirit fleet
The budget airline’s fleet currently stands at over 200 aircraft, all of which belong to the A320-family. Its oldest planes are its 17 A319-100s which have an average age approaching 17 years old, as per ch-aviation. The airline welcomed the majority of its A319s in 2006 and 2007, although it took delivery of two airframes on lease in 2016.
It also dropped its plans to fly the A319neo, instead converting its orders to the larger A321neo, and plans on retiring all of its A319s by the end of 2025. In January 2023, the carrier announced a major sale involving 29 of its A319s, generating up to $200 million.
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The A320 makes up the majority of Spirit’s fleet. The airline currently has 148 A320s, split across 64 A320-200s and 84 A320neos, and expects to induct another 15 A320neos over 2024. Most of the airline’s A321s are the older A321-200 model, of which it has 30, while its A321neo fleet currently stands at eight. Spirit welcomed its first A321neo in June 2023 and will eventually induct over 40 of the type.
JetBlue merger update
Spirit and JetBlue continue to wait for a ruling on their proposed merger after the trial ended in early December. The deal has faced opposition by the US Department of Justice (DOJ) on antitrust grounds, claiming a merger will ultimately lead to higher airfares and fewer options for low-cost travel.
Related
JetBlue – Spirit Airlines Merger Now Awaiting Judges Decision
The deal could go through with further concessions from JetBlue.
The judgment in this case is expected at some point this month – if it goes ahead, it would lead to the creation of the country’s fifth-largest airline.
What do you make of this news? Let us know in the comments.
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