The dismantling of Spirit Airlines continues as the airline received approval from bankruptcy court to sell its 27 remaining aircraft for about $668 million.
A bankruptcy court judge approved the transaction last week, clearing the way for the aircraft to be sold to two companies in separate transactions.
Four of Spirit’s planes will be sold to an aerospace company for about $100 million, while the remaining 23 will be sold to a company controlled by some of its existing lenders for more than $567 million. The aircraft involved are 10 Airbus A320ceos and 17 Airbus A321ceos, according to bankruptcy court documents.
While it’s a nice chunk of change, and the most valuable remaining asset in Spirit’s coffers, it’s not an actual cash transaction, per se.
The sale of the 23 aircraft is being completed by a company controlled by some of Spirit’s existing lenders, who previously loaned the airline money using those planes as collateral. Rather than paying the full $567.4 million in cash, the lenders are applying a portion of what Spirit already owes them toward the purchase. Any remaining cash will likely go toward paying off other lenders.
Read More: What the Brightline bankruptcy means for current riders and Las Vegas plans
Any “proceeds” from this and other sales will go to pay off some of Spirit’s outstanding debts, initially to the highest priority lenders and slowly trickling its way down until it reaches shareholders (if there’s anything left).
What Spirit Airlines assets have been sold off?
Since going under back in May, Spirit Airlines, which tried unsuccessfully to stay afloat by courting the Trump Administration for assistance, creditors and other interested parties have begun picking apart the remains of the once-ubiquitous budget airline.
Among its most lucrative assets were the designated airport slots at New York’s LaGuardia Airport, which were sold to JetBlue for for around $58 million. LaGuardia has a cap on the number of departures and arrivals it allows due to its strained capacity—you can’t fly in or out of the airport without one.
JetBlue’s acquisition of those Spirit slots allows the former competitor and failed merger partner to sell more routes out of LaGuardia. It will also move into Spirit’s old Terminal A facility, an older and smaller terminal than its current home at Terminal B.
Read More: Burbank airport’s upgraded terminal nears opening date—what to expect
Another major component of the bankruptcy sell-off is Spirit’s data, which was agreed to be sold last month to Google to be used for AI-training purposes. Google described the purchase as “part of an enterprise dataset” that will not include any personal information.
Specifically, that purchase included Spirit’s emails, internal chats and customer complaints, as well as operational data related to the defunct airline’s finances, loyalty program and website analytics.
The completion of that deal remains tied up for now in court due to some objections by former employees.
The airline’s headquarters in Dania Beach, Florida, sold earlier this year for $93.25 million to “an affiliate of the Boston-based hedge fund Hill City Capital,” according to Yahoo News.
That facility included office space, training center, hangar, and a multifamily residential building.
Spirit’s last-remaining big ticket items include spare engines, flight simulators, ground service equipment and other maintenance equipment. Those are expected to have more modest returns when sold, industry experts have said.
For more stories like this, follow Rabble News on Instagram and Facebook.
