A Spirit Airlines A320 taking off at Chicago O'Hare.
Credit: Christian Heinz/Alamy
Spirit Airlines has agreed to transfer two gates at Chicago O’Hare International Airport (ORD) to American Airlines in exchange for $30 million.
Spirit, working its way through a Chapter 11 reorganization, determined the leased gates are no longer needed, according to a U.S. bankruptcy court filing by the carrier. Spirit, which emerged from a Chapter 11 restructuring earlier this year only to file for bankruptcy protection again five months later, is endeavoring to offload “non-core gate leaseholds” to raise funds to repay debt, according to the filing.
Spirit held leases with ORD for four gates. “When [Spirit] entered into the use and lease agreement for the [four gates] … Spirit had approximately 32 departures from O’Hare on peak days,” the airline said in the filing. “That number has now been halved, so … having access to half of its preferential gates at O’Hare would meet Spirit’s needs.”
Spirit has been cutting routes and frequencies as part of its reorganization. The carrier's fourth-quarter capacity will be down more than 34% year over year.
Spirit said it entered into the agreement with American, which has a hub at ORD, because “the cost and delay of running an auction or public sale process … would outweigh any marginal increase to the assignment proceeds.” Spirit emphasized it will continue to operate at ORD with its remaining two gates.
The transaction comes as American has asked the bankruptcy court to keep it apprised of all activities related to Spirit’s reorganization.
In a filing with the court overseeing Spirit’s Chapter 11 process, American said it wants to be informed of all “notices and papers” related to the reorganization.
American stated in the filing that this “includes, without limitation, all orders, notices, hearing dates, applications, motions, petitions, requests, complaints, demands, replies, answers, schedules of assets and liabilities and statements of affairs, operating reports, plans of reorganization and liquidation, and disclosure statements, whether formal or informal, whether written or oral and whether transmitted or conveyed by mail, hand delivery, telephone, electronic mail, or otherwise, that is filed or given in connection with” Spirit’s bankruptcy restructuring.
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