Spirit Airlines ended its run after more than 30 years over the weekend, but the months-long process of dismantling the company was just beginning on Tuesday following the largest U.S. airline bankruptcy in a generation.
Spirit and its associates went to bankruptcy court in White Plains, New York, to begin a process that will take several months. During the public hearing, topics such as airport landing fees, aircraft, and staffing were discussed.
The company has submitted a reduced budget of approximately $217 million cumulatively, but that number is subject to change.
The budget was submitted through February 2028 and included more than $52 million in employee costs through July and an additional $52 million in aircraft-related expenses.
The airline has 59 Airbus A320s in service and 63 in storage, as well as 37 larger A321s in service, 13 of which are in storage, according to aviation data firm Cirium. More than three-quarters of the company’s fleet was leased.
After years of struggle, Spirit recently shut down due to high debt and rising costs.
Spirit’s lawyer, Marshall Huebner of Davis Polk, said in bankruptcy court on Tuesday that high jet fuel prices after the U.S. and Israeli attacks on Iran in February forced Spirit Airlines to shut down. This added $100 million in additional costs to Spirit in March and April, he said.
United States Bankruptcy Court in White Plains, New York
Leslie Josephs/CNBC
Negotiations over a possible government bailout in the form of a $500 million loan that could have given the government up to 90% of Spirit’s shares collapsed late last week, and the airline officially closed at 3 a.m. ET on Saturday.
Spirit passengers scrambled to rebook. american airlines, jet blue airlines, southwest airlines, united airlines Others said they put tens of thousands of Spirit customers stranded by the collapse on flights.
Spirit carried about 50,000 people in the day before it was shut down. The airline announced that approximately 17,000 direct and indirect employees have lost their jobs.
“The closure of Spirit Airlines is a sad and unfortunate event that will negatively impact many parties, especially Spirit Airlines’ employees and the thousands of people who depend on them,” Chief Judge Sean Lane said during Tuesday’s hearing.
“The stress levels for these employees and affinities are very high and they probably have a lot of questions,” he continued. “We hope that the information discussed today will provide answers to some of these questions or provide information about where those answers can be found. Bankruptcy can be a very difficult process, and today is a sad example of that.”
