Originally Posted by
FriendlyPilot
363 Asset sales are not applicable with leased assets. Spirit has always had the ability to sell owned assets that are unencumbered. My understanding is that 100% of Spirit's planes are either leased (i.e. owned by another entity) or have encumbrances (meaning notes against the asset). For other debts owed by Spirit, maybe, but you don't wipe out encumbrances on the planes themselves. Those have to be paid off.
This is all incorrect. Number 1, NK does own about 50 airplanes. 2, leased aircraft can still be acquired in a 363. The lease is what is the asset being sold, not the aircraft itself. Obviously the long term debt from the leases is still owed, but spirits debt from years of poor performance can easily be avoided by the acquirer.