Irish Lessors Face Fallout as Spirit Airlines Halts Operations, $500M Bailout Fails
Irish aircraft lessors like Aercap and SMBC Aviation Capital are impacted by Spirit Airlines' collapse after a $500 million US government bailout failed. Spirit ceased operations due to high fuel costs, affecting lessors who supplied its fleet. The airline seeks court approval for worker bonuses and fast-track asset sales during its wind-down.
Irish aircraft lessors, including Dublin-based Aercap, SMBC Aviation Capital, and Avolon, face fallout after US carrier Spirit Airlines ceased operations last weekend. Spirit halted flights after the federal government declined a proposed $500 million bailout. Lawyers informed a US bankruptcy court on Monday that the airline had no option but to cease operations due to soaring fuel prices and the lack of government aid.
Aercap, a major supplier, had already restructured leases with Spirit last autumn, reducing its exposure from 37 to 10 existing leases and agreeing to lease 30 new Airbus A320 and A321 aircraft from 2027 to 2029. Aercap also committed $150 million to Spirit’s restructuring and holds a $572 million unsecured debt claim. SMBC Aviation Capital leased eight aircraft to Spirit, and Avolon leased two.
Spirit, with a fleet of 114 aircraft valued at approximately $7 billion, leased 66 of them. The airline was already struggling financially, facing an additional $100 million in fuel costs since March 1st. Spirit’s lawyers requested court permission to pay $10.7 million in retention bonuses to workers for wind-down assistance, a request that has drawn concern from the US Trustee. The airline also seeks fast-track sales or lender repossession of its assets due to a lack of funds for an organized auction.