What does the Spirit Airlines insolvency cruel for airfares? Experts weigh in.

distribution carrier Spirit Airlines filed for insolvency this week, stoking concern about how the budgetary peril of a low-fare alternative could impact prices across the industry.

The Florida-based business has vowed to continue operations as normal while insolvency proceedings unfold over the coming months.

“Guests can continue to book and fly without interruption and can use all tickets, credits and loyalty points,” Spirit Airlines said in a statement on Monday.

Those plans should minimize the result on airline prices in the short term, leaving the options available to customers essentially unchanged, industry analysts told ABC information.

Analysts differed about the insolvency’s long-term implications, however.

Some experts downplayed the result on prices, saying Spirit Airlines holds a relatively tiny economy distribute and alternative low-expense carriers would jump into a void left in the occurrence of downsizing or combination. While other experts warned of meaningful worth increases for some flight routes as a outcome of diminished competition.

“This is not a black and white circumstance,” Henry Harteveldt, a trip industry analyst at mood Research throng. “It’s very much a thousand shades of gray when it comes to the potential impact of Spirit’s insolvency on pricing.”

Spirit Airlines did not immediately respond to ABC information’ request for comment.

Spirit Airlines brought in roughly $1.3 billion in profits over a recent three-month stretch, which marked a 10% decline compared to the same period a year ago, according to an profits release in August.

Frontier Airlines, another distribution carrier, brought in $935 million over a recent three-month period, profits showed.

By comparison, Delta earned about $15 billion over a recent three-month period, while American Airlines brought in $13.6 billion.

The disparity in size between the low-priced airlines and the top firms underscores a fissure in the industry separating distribution carriers in select markets from the major airlines that dominate flight offerings nationwide, Mike Boyd, president of aviation consulting firm Boyd throng International, told ABC information.

“The airline industry is made up of those two basic groups,” Boyd said. He pointed to the relatively tiny stature of Spirit Airlines as a rationale why its insolvency would likely have little impact on prices across the sector.

“Spirit isn’t large enough to factor airfares to leave up,” Boyd said.

Plus, the other distribution airlines would likely jump into the flight routes set aside by Spirit Airlines, if the business chooses to downsize or merge with a competitor, Harteveldt said.

The emergence of those replacements would preserve the downward pressure on prices in the relevant flight routes where distribution airlines prosper, he added.

“It’s very feasible other airlines would step in,” Harteveldt said. “worth competition would be alive and well.”

At least one industry analyst sharply disagreed with such optimism.

Jamie Larounis, a trip industry analyst at Upgraded Points, said the potential setback of some low-fare flight options at Spirit Airlines would deliver a significant blow to the distribution offerings available to consumers.

“You would be pulling out a major player in the ultra-low-expense carrier economy,” Larounis said.

The low worth point offered by Spirit Airlines on online booking platforms forces the larger carriers to reduce their prices, even if added fees for checked bags or seat selection complete up raising the expense of a given Spirit Airlines flight, Larounis said.

The budgetary travails faced by Spirit Airlines are part of a wider pattern that has thinned out low-expense offerings, placing increased importance on the fate of Spirit Airlines for the competitiveness of the marketplace, Larounis added.

A potentially diminished version of Spirit Airlines could “drive prices up,” Larounis said.

Industry analysts who spoke to ABC information emphasized that much remains to be determined about the fate of Spirit Airlines.

The business will likely seek to reduce costs while homing in on its most profitable markets, some experts said, acknowledging that the business may ultimately merge with a larger carrier.

For now, Spirit Airlines has not announced any route changes or reductions in flight capacity.

“The business is saying everything is business as usual during the insolvency,” Sarah Foss, head of legal at budgetary consulting firm Debtwire, told ABC information.

“They haven’t talked about any changes to routes or flight schedules, but I would imagine that might arrive during the insolvency or afterward,” Foss added.