The highly coveted operating slots at New York’s second-busiest airport that were previously owned by Spirit Airlines will be auctioned off to the highest bidder.
Spirit, which folded and ceased operations earlier this month after repeated years of financial turmoil, possessed 22 slots at LaGuardia Airport. As part of the company’s bankruptcy filing, those slots, which are among the defunct company’s most valuable assets, will be sold off as part of the liquidation process.
Earlier this month, the online aviation news publication Aviation Shop wrote that the slots had been valued internally at more than $86 million, and had drawn the interest of major carriers, including American Airlines, JetBlue and Frontier.
But the future ownership of those slots might ultimately end up with other low-cost carriers that once competed against Spirit.
That is, if Federal Aviation Administration chief Bryan Bedford has his way.
According to the Wall Street Journal, Bedford, who will have ultimate approval say over any deal, would prefer that those slots were awarded to other low-cost carriers “for the public good.”
Bedford added that if a deal couldn’t be made to have those LaGuardia slots transferred to another low-cost airline, retiring them entirely to reduce congestion would also be an option.
What is an airport slot at LaGuardia?
Slots are used to divy up service at high demand airports that have to deal with complicated capacity issues. LGA is one of only three airports that utilize the slot system, according to Yahoo Finance.
Previously, Spirit used those slots at LaGuardia to connect New York City with Dallas, Chicago, Detroit, Houston, and Fort Lauderdale, Florida—the airline’s homebase—which is already at the center of other airlines’ expansion plans.
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In addition to the slots at LaGuardia, Spirit also owned a smaller package at nearby Newark Liberty International Airport. Capacity at Newark, according to Aviation Shop, is tightly constrained and those slots could also prove to be quite valuable to the highest bidder.
Spirit’s abandoned slots are considered to be the crown jewels of its assets, easily outweighing the value of its planes, engines and other equipment.
Who will end up with Spirit Airline’s slots?
If a low-cost carrier will be the priority for the FAA and the Department of Transportation, a likely suitor for Spirit’s orphaned airport slots in New York and New Jersey would be JetBlue.
The airline, itself a former failed merger partner with Spirit, has plenty of in-roads in New York and has long made its desire for more slots at LaGuardia well known. The airline also checks off Bedford’s low-cost carrier box.
Frontier is likely to be a major player for Spirit’s other assets in Las Vegas and Florida, Aviation Shop writes.
But there will be no shortage of potentially interested buyers. As noted by Edward Russell from the Points Guy, “Which airlines want Spirit’s LGA slots? All of them, in theory.”
Any transfer of airport slots or other major Spirit Airlines’ assets will ultimately need to be approved by the federal government.
Spirit Airlines officially ended service on May 2 after 33 years flying under the Spirit banner. The company was saddled with immense debt that it was unable to get out from underneath, despite two previous bankruptcy filings in less than 18 months.
The low-cost carrier, often the punch line of frustrated travelers and Saturday Night Live’s Weekend Update team, attempted to stave off liquidation with an ill-fated bailout from the Trump Administration. That bailout would’ve resulted in a significant portion of the company being taken over as equity by the U.S.
At the time of the negotiations, reports seemed to indicate that the parachute would be deployed to rescue Spirit. It’s unclear what exactly happened during those talks that led to Trump Administration’s decision not to offer and rescue funds to keep the airport running.
