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> Instead when the company is liquidated they can buy the airport slots they so direly need without all the extra debt -and- they get to pick through anything else they want like airframes

I'm not familiar with how the process works, would JetBlue now have to compete with larger airlines for these assets if Spirit goes under?

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Yes but this is likely still better than acquiring Spirits considerable debt load etc. The most likely competitor will actually be Frontier who also made an offer on Spirit. The big players generally have the allocations they are after already, hence their position in the market being so solid.

There is a risk of the big 4 just buying the slots to tie them up though, this happens a lot in markets like Australia which have very strict arrival/departure windows but is a lesser problem in markets like the US which throttle throughput based on ATC capacity instead.

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