Spirit Airlines: Chapter 22, Lessor Exposure
Matt Woodruff, CFA - Head of Aerospace & Defense/Transports, CreditSights
Arda Tirnakli - Analyst, Aerospace & Defense/Transports, CreditSights
5 September 2025
Insights into Spirit’s restructuring, fleet and lease decisions, lessor dynamics, and financing implications, including:
- Fleet and network reset: See how Chapter 11 could reshape capacity plans and aircraft utilization without revealing asset-by-asset outcomes.
- Lease vulnerability signals: Understand which lease buckets and aircraft vintages appear most at risk and the factors that typically drive rejections.
- Lessor exposure landscape: Find out which lessors appear most exposed at a high level and how exposure can vary by asset type and contract terms.
- Counterparty actions and signals: Gauge what early moves by key counterparties—such as AerCap—may indicate for negotiations and timelines.
- Financing watchpoints: Identify what to monitor in aircraft-backed debt and loyalty financing structures without pre-judging recoveries or deal terms.
Executive Summary
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On Friday, Spirit Airlines filed for Chapter 11 for the second time in less than a year. While Spirit is not under coverage, we summarize information provided thus far and highlight exposure for the various lessors.
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Per Spirit’s bankruptcy filing, the Company intends to shed billions of dollars in liabilities and will use chapter 11 to transition the Company to a sustainable future and position it to deliver the ” best value in the sky ” for years to come.
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The news of a continuing airline is unfortunate for the likes of JetBlue, Frontier and the US Airline industry as there were hopes of a liquidation that would have materially reduced competition.
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While the last bankruptcy filing resulted in equitizing $800mn of debt, and injected $350mn of liquidity through an equity offering. This time, there appears to be more of a hatchet approach, with substantial changes to the existing network. We expect material amounts of leases to be rejected during the Ch 11 process.
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On Friday, Spirit Airlines filed for Chapter 11 for the second time in less than a year. While Spirit is not under coverage, we summarize information provided thus far and highlight exposure for the various lessors.
According to Spirit’s bankruptcy filing, the Company intends to shed billions of dollars in liabilities and will use Chapter 11 to transition to a sustainable future and position itself to deliver the “best value in the sky” for years to come. While the last bankruptcy filing equitized $800mn of debt and injected $350mn of liquidity through an equity offering, this time it appears to be more of a hatchet approach. The filing blamed Southwest for slashing pricing on domestic routes as that airline navigates changes to its business model, and stated that American, Delta, and United have sought to take share from low-fare carriers through expanded basic economy service, as business travel has not recovered to pre-COVID levels. In July and August 2025, Spirit completed a series of sale-leaseback transactions with respect to 14 spare engines, resulting in net cash proceeds of about $250mn.
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