Spirit Airlines Sells Two Chicago O’Hare Gates to American Airlines for $30 Million

Spirit Airlines has finalized the sale of two gates at Chicago O’Hare International Airport (ORD) to American Airlines for a total of $30 million. This transaction is part of Spirit’s ongoing efforts to raise capital as it navigates its latest bankruptcy proceedings. The airline has determined that it no longer requires all four of its preferred gates at ORD, allowing American Airlines to acquire gates G8 and G10 while retaining access to G12 and G14 for its own operations.

According to a ruling by the US Bankruptcy Court for the Southern District of New York, the sale, priced at $15 million per gate, is significant for both carriers. American Airlines aims to strengthen its position at Chicago O’Hare, which it seeks to develop into its third-largest hub. This sale represents Spirit’s first public asset disposal since entering its second bankruptcy.

Strategic Moves at Chicago’s Main Airport

American Airlines is currently engaged in a competitive struggle with United Airlines for market share at ORD. United maintains a substantial lead, holding around 40% of the airport’s market. In contrast, American’s acquisition of these two gates positions it favorably to expand its operations. The newly acquired gates are conveniently located in Terminal 3, where American already has a dominant presence, including one of its three Admirals Clubs situated near gate G8.

Data from aviation analytics company Cirium indicates that American Airlines has over 2.7 million seats scheduled for December 2023, while United Airlines has more than 3.8 million. Earlier this year, American lost four gates at ORD due to underutilization, while United gained access to five additional gates. Despite this setback, American Airlines has managed to operate its largest-ever flight schedule from ORD in 2023, adding routes to destinations such as Honolulu, Madrid, and Naples, while increasing its premium capacity by 40% year-on-year.

Future Prospects for Spirit Airlines

As Spirit Airlines continues its restructuring efforts, it is exploring various strategies to emerge from bankruptcy, including a potential merger or sale. The carrier has stated it is “engaged with a number of interested counterparties.” Chicago O’Hare was previously one of Spirit’s ten largest operating airports, but the airline has significantly reduced its presence there, focusing on other areas of its network.

Recently, American Airlines submitted a request to access all filings related to Spirit’s bankruptcy case, positioning itself as a “party of interest.” While some speculate that this could indicate American’s interest in merging with Spirit, an American Airlines spokesperson clarified that the request was related to an “airport-specific agreement,” likely linked to the recent gate acquisition.

As Spirit Airlines continues to navigate its financial challenges, the sale of the gates marks a pivotal point in its efforts to secure a more sustainable future.