A U.S. bankruptcy court on Tuesday approved Spirit’s plan to wind down operations, allowing the now-defunct carrier to prepare for full-scale liquidation.
Spirit filed its wind-down plan and budget on Monday, two days after grounding all flights. The proposal allows Spirit to retain about 150 employees to oversee the company’s dismantling over a period of several months.
“Today is a very challenging day,” Judge Sean Lane said, according to a report from the Associated Press. “It’s not a day that anybody hoped would ever come.”
Lane also extended his sympathies to former Spirit employees and their families.
The airline plans to sell off almost everything of value, including aircraft, spare parts, equipment, and slots at airports. Its wind-down plan suggested sending some remaining Spirit employees to secure physical assets to make sure they are not damaged or degraded.
According to the AP, Spirit has 114 Airbus A320-family aircraft, most of them leased. Leased aircraft will be returned to their lessors, and the jets the company owns outright will be sold under liquidation procedures.
Spirit suspended operations early Saturday morning, around 2 a.m. The airline had been in negotiations with the Trump administration for a $500 million rescue package, but some of Spirit’s creditors balked at terms that would have given the federal government an up to 90% stake in the company. According to Spirit’s account, the administration’s offer was withdrawn on Thursday, cutting off the carrier’s last potential lifeline.
In court, Spirit attorney Marshall Huebner, of Davis Polk, said rising oil prices – a consequence of the war in Iran and the closure of the Strait of Hormuz – ultimately “engulfed” the airline. He also apologized to the carrier’s former workers and customers and warned that, without Spirit in the mix, travelers across the U.S. will likely pay higher ticket prices.
