Spirit Airlines (SAVE) is trying to raise additional cash where possible as it faces bankruptcy rumors.
The ultra-low-cost airline said in a regulatory filing on Thursday that it has entered into an agreement with aerospace company GA Telesis for the sale of some of its aircraft. The total price tag for the deal is approximately $519 million, Spirit announced.
The sale is expected to provide the struggling airline with a $225 million infusion through the end of next year. Although Spirit expects to end this year with $1 billion in liquidity, Spirit will begin a cost-cutting program early next year that it says will save about $80 million annually.
Spirit continued to struggle financially after a federal judge in March blocked its proposed $3.8 billion merger with JetBlue Airways (JBLU) over concerns that the combination of the two budget carriers would be anticompetitive.
There has been speculation for months that Spirit could go bankrupt. Earlier this month, Spirit’s shares plunged following a report from the Wall Street Journal (NWSA) that the airline could soon file for bankruptcy.
However, Spirit said in the filing that it expects third-quarter adjusted operating margin to come in at the high end of prior expectations, thanks to stronger-than-expected revenue and early results from its transformation plan exceeding expectations.
Shares of Spirit rose more than 8% in pre-market trading on Friday. The company will announce its full third-quarter results in mid-November.
The Journal reported Tuesday that Spirit and Frontier Airlines (ULCC) may be in early talks to revive old merger plans. According to the publication, a deal would likely be part of Spirit’s possible debt restructuring plans.
In a separate filing last week, the company said it had postponed the deadline for refinancing about $1.1 billion in debt until December 23. Spirit also said it had borrowed the entire $300 million revolving credit facility it established in March 2020. The loans under this facility are expected to mature at the end of September 2026.
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