Spirit Airlines Inc. (Spirit), an ultra-low-cost carrier headquartered in Dania Beach, Florida, has filed for Chapter 11 bankruptcy twice in the past year amid ongoing challenges from weak demand, high operating costs, and liquidity constraints. The airline first entered bankruptcy in November 2024 and exited in March 2025, but filed again in August 2025 to pursue a deeper restructuring.

Spirit recently reached an agreement with AerCap Holdings N.V. (AerCap) to reject leases on 27 aircraft and, pending court approval, plans to return an additional 87 aircraft as part of its effort to streamline operations and eliminate unprofitable routes. None of the AerCap aircraft are included in asset-backed security (ABS) transactions rated by KBRA; however, two of the 87 pending aircraft are included in two KBRA-rated ABS transactions.

There are currently six KBRA-rated aviation lease ABS transactions with exposure to Spirit. The exposures are limited, with no single transaction exceeding 11% of the portfolio value, and no potentially rejected aircraft representing more than 4% of any portfolio. In the event a lease is rejected, ABS cash flows could be temporarily disrupted while the related servicer works to re-lease or sell the affected aircraft. Leases that are affirmed may also be restructured at lower rates, potentially exerting additional pressure on cash flows.

The six KBRA-rated aviation lease ABS transactions with exposure to Spirit and the potentially rejected aircraft, based on data from the September 2025 payment date reports, are as follows:

For the two transactions that may each include one potentially rejected Spirit aircraft, KBRA’s closing assumptions have already incorporated lessee defaults of 60% or more over a four-year industry downturn. As of the September 2025 payment date reports, the two transactions have 0% off-lease aircraft.

KBRA will continue to monitor developments and report if needed on potential implications on our rated aviation ABS universe.

Recent Publication

• KBRA Comments on Aviation ABS Exposure to Spirit Airlines

About KBRA

KBRA, one of the major credit rating agencies, is registered in the U.S., EU, and the UK. KBRA is recognized as a Qualified Rating Agency in Taiwan, and is also a Designated Rating Organization for structured finance ratings in Canada. As a full-service credit rating agency, investors can use KBRA ratings for regulatory capital purposes in multiple jurisdictions.

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