As the defunct carrier continues to be sold off piecemeal, Spirit Airlines has filed to sell its two gates at Hartsfield-Jackson Atlanta International Airport (ATL). Delta Air Lines will pay $12 million for Gates C4 and C6 pending final review by New York’s Southern Bankruptcy Court, according to WSBTV.

There appear to have been just a handful of eligible operators in consideration to purchase Spirit’s vacant gates, but at least one did give Delta competition to buy out the use and lease agreement. Spirit stated that the bid from Delta was the best and highest offer to compensate the bankrupt airline’s debtors.

Delta’s Homefield Advantage Grows

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No other bidder has been named so far, and the deadline for any objections to the deal elapsed on July 1 at 4:00 PM. The court hearing to finalize the sale is scheduled for 11:00 AM on July 8. So long as there are no changes, Delta will take over the lease until 2031. Facilities include the Concourse C gates as well as the ticketing lobby, check-in counters, and support areas associated with C4 and C6.

ATL is Delta’s home field and is far from wanting for more infrastructure at the mega hub, still, it will give the airline more flexibility to streamline operations. Delta is only buying the leasehold rights to Spirit’s assets, not the gates themselves. As the city of Atlanta actually owns the airport, another carrier may have the opportunity to buy these gates out in 2031. Since Delta already controls roughly 80% of Atlanta’s traffic, the Federal Aviation Administration may step in to encourage such a decision.

FAA Administrator Bryan Bedford has already expressed concern over the lack of service from affordable air carriers following the demise of Spirit. He personally stated that the FAA would even consider shutting down gates up for auction at airports like LaGuardia Airport (LGA) if a low-cost carrier could not purchase them from Spirit. According to WSBTV, Spirit gave this statement regarding Delta’s successful bid:

“Delta and the other airline that competed in the process are among the few airlines that fit these criteria. The assignment is therefore commercially and operationally logical.”

The Fade Out Of The Spirit Effect

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For years, the presence of Spirit’s bright yellow Airbus A320 twinjets represented a market force that kept costs down and made airfare more affordable for average Americans. Referred to as the ‘Spirit Effect,’ the same market force is an important element of global aviation travel, with carriers like Ryanair and Jetstar providing the same ‘bare fares’ in other regions around the world. The FAA is very concerned that the increasing dominance of legacy carriers, with Spirit’s insolvency and operational shutdown, will raise prices across the board for U.S. air travel.

While the ATL deal appears to be closed, the auction for LGA’s 22 coveted daily takeoff and landing slots is scheduled for July 9th. Valued at $87 million, the FAA has said that if another ultra-low-cost carrier like Frontier, Allegiant, or Southwest Airlines cannot win the bid, the slots may be retired entirely. This is a historically aggressive statement from the FAA.

Some critics are even pointing to Bedford’s New York stance to argue that federal regulators should have stepped in to block Delta in Atlanta for the same anti-monopoly reasons. A view from the Wing stated that the transaction was not subject to antitrust review at a federal level as the price did not meet the threshold of $130 million. The FAA could sue to block the transaction under the Sherman Act, but it does not appear that will happen.

Balancing Spirit’s Red Ledger

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The FAA may not be a fan of seeing Spirit’s assets sold off to the industry titans of the ‘Big Three’ like Delta, United, or American Airlines, but the now-defunct carrier’s lawyers are fighting against intervention. The airline’s legal team is working to raise the highest amount of cash possible in order to pay back creditors, and should the FAA make the decision to intercede, it could spark a major legal battle.

As for now, it remains to be seen if the continued liquidation will trip any major red lines with the FAA. The fleet of yellow Airbuses continues to be sold off, and Spirit’s infrastructure is slowly being dissected to the highest bidder. LGA is likely to be the highest-profile sale in the bankruptcy auction saga, and the results may well have a ripple throughout the entire U.S. commercial aviation market.