Spirit Airlines Ceases Operations, Repossession of Aircraft Underway
On May 2, Spirit Airlines officially ceased operations, marking a significant event in the aviation industry. The shutdown initiated a complex process of aircraft repossession, led by Steve Giordano, managing partner of Nomadic Aviation Group. Giordano’s team undertook the task of retrieving over 20 Spirit planes that lessors sought to reclaim.
In a span of just over a week, Nomadic Aviation successfully ferried 23 Airbus jets from various airports across the United States to storage facilities in the Arizona desert. These aircraft, previously in service, had only hours earlier been transporting Spirit customers. Giordano noted that the operation commenced shortly after Spirit’s closure, which occurred at 3 a.m. ET on May 2.
The process involved moving the aircraft to specialized storage locations outside of Phoenix and Tucson, where the dry climate helps mitigate corrosion and other forms of damage. This method of storing retired or unused planes has been common, especially since many airlines parked thousands of aircraft during the downturn caused by the COVID-19 pandemic.
The Repossession Process
Nomadic Aviation is specialized in aircraft transportation, but repossessions like this are rare. Giordano explained that the company typically handles the movement of planes to new customers globally. However, the repossession of aircraft from an airline that has liquidated is less frequent. Spirit Airlines’ collapse is one of the most significant in recent decades, with the carrier beginning the lengthy process of dismantling in bankruptcy court shortly after its shutdown.
As part of the liquidation process, Spirit Airlines is required to return its fleet to lessors. According to court filings, the airline possessed 114 Airbus A320 aircraft, with 66 of them leased. Giordano’s team not only managed the logistics of the repossession but also ensured that the aircraft received necessary inspections and fuel before being flown to their new locations.
Market Demand for Aircraft Components
While the immediate future of the repossessed planes is uncertain, there is a notable demand for certain aircraft components, particularly engines. The value of secondhand parts has increased due to supply chain disruptions stemming from the pandemic. For instance, a Pratt & Whitney PW1127G engine was valued at approximately $14.5 million in January, up from $11.3 million three years prior.
Stuart Hatcher, chief economist at aviation consulting firm IBA Group, remarked that operational engines would be highly sought after, especially given that turnaround times for repairs currently exceed the norm. The ongoing need for reliable aircraft components has made them a valuable asset in the aviation market.
A Unique Experience
Giordano, who lives near Philadelphia International Airport, described the experience of flying the last Spirit plane out of that airport as “surreal.” He noted that the event was a historic moment in his career, emphasizing the significance of the operation in the broader context of the airline’s closure.
As the aviation industry continues to navigate the aftermath of Spirit Airlines’ shutdown, the repossession of aircraft and the demand for components illustrate the complexities and challenges facing the sector. The situation serves as a reminder of the volatile nature of the airline business and the ongoing impacts of economic fluctuations on air travel.
