*

AerCap ( AER ) to inject $150 million into Spirit, granted $572

million

unsecured claim

*

Spirit Airlines forfeits $9.7 million to AerCap ( AER ) in

bankruptcy

deal

*

Spirit to sign new leases for 30 Airbus planes with AerCap ( AER )

By Rajesh Kumar Singh and Doyinsola Oladipo

NEW YORK, Oct 10 (Reuters) - In a fleet optimization

move, Spirit Airlines will reject its commitment to buy 52

Airbus planes along with its options for 10 others. The

aircraft orders will be taken over by aircraft lessor AerCap ( AER )

.

This three-way agreement is part of a dispute settlement

between Spirit and AerCap ( AER ), which was approved on Friday by U.S.

Bankruptcy Court for the Southern District of New York.

The conflict with the world's largest aircraft leasing

company was the trigger for pushing Spirit into its second

bankruptcy.

In late August, AerCap ( AER ) unexpectedly terminated the lease

agreements for 36 new Airbus A320neo family jets that were

scheduled for delivery to Spirit between 2027 and 2028. It also

claimed default on the leases for 37 aircraft already in the

carrier's operational fleet.

Spirit disputed the validity of AerCap's ( AER ) claims. But with

access to a large portion of its current and future fleet

jeopardized, the company was forced to seek bankruptcy

protection.

As part of the settlement between the two companies, Spirit

will reject 27 out of the 37 leases it holds. AerCap ( AER ), meanwhile,

was granted permission to keep and use $9.7 million in cash

security deposits that Spirit provided for the canceled aircraft

leases.

The Irish leasing giant also has been granted permission to

file a total unsecured claim of up to $572 million against

Spirit. It is not clear yet how much it will be able to collect

on that claim.

Spirit will give up all its rights to the 36 undelivered

jets. Additionally, it will sign new lease agreements with

AerCap ( AER ) for 30 new Airbus A320 or A321 airplanes for deliveries

spread equally across 2027, 2028 and 2029.

As part of the deal, AerCap ( AER ) will make a cash injection of

$150 million into the bankrupt airline.

Separately, Spirit said the court has also approved a

debtor-in-possession ("DIP") financing facility of up to $475

million from its existing bondholders. Of the total financing,

$200 million is immediately available to the carrier.

In a statement, Spirit said the agreement allows it to

reduce operating costs by hundreds of millions of dollars.

Spirit plans to shrink its operations to reduce its costs.

It has decided to furlough approximately 1,800 flight

attendants, about one-third of its cabin crew, effective

December 1.

The carrier, which currently operates 214 aircraft, also

plans to shrink its fleet by nearly 100 aircraft, nearly half of

its fleet.