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Detroit Metro Airport is planning to acquire the hangar vacated by Spirit Airlines when the company declared bankruptcy and ceased operations in May, court records show.
The Wayne County Airport Authority has reached an agreement with Spirit to buy the defunct budget-friendly airline out of its existing hangar lease for $18 million, according to documents filed Tuesday in federal bankruptcy court in New York.
WCAA was the only entity to submit a qualified bid for the hangar by a July 16 deadline, court documents show. Two other parties, who are not identified by name in the legal filing, expressed interest in acquiring the facility but ultimately declined to submit bids.
A spokesperson for WCAA said officials have yet to finalize future plans for the hangar.
"We were informed by the bankruptcy court that we submitted the winning bid, but the court will make a final determination after August 4th," WCAA said in a statement. "We continue to explore all options for the hangar, but it would be premature to make any plans until after the court's decision."
Spirit and the WCAA entered into a ground lease for the property on which the hangar sits, on the airfield at DTW in Romulus, in September 2015. The 126,000-square-foot hangar opened in 2017 and was the company's single largest maintenance facility, court documents state. Up to 100 mechanics worked in the hangar, performing heavy maintenance, inspections, repairs and other work, until they were laid off when Spirit discontinued service and canceled all flights in May.
Spirit Airlines shut down after failing to secure a $500 million government bailout, with disagreements among federal officials and bondholders derailing a last-ditch funding effort. The airline spent a prolonged stretch in Chapter 11 bankruptcy amid heavy debt and years of losses.
In considering how best to liquidate its assets, Spirit determined that the time and expense of holding an auction or public sale for the DTW hangar lease would likely outweigh any additional money it might bring in, according to the court filing. The company wrote that WCAA's bid is fair and in line with current market conditions.
"For these and other reasons, (Spirit) believe(s) that an open auction would not result in a better outcome than that achieved in this private transfer and would only add cost and delay," Spirit Vice President Chip Sandifer wrote in a formal declaration included in WCAA's court filing.
A hearing to consider approval of the deal is slated for Aug. 4. Any objections must be filed by July 28, per court records.
This article originally appeared on The Detroit News: Detroit Metro Airport buying Spirit Airlines hangar lease for $18M
