Alison Sider

And we might start seeing it show up more with some of those airlines.

The first real domino to fall is Spirit, which was in bankruptcy for the second time in less than a year, like a really vulnerable airline to start with.

It had an agreement with its creditors to come out of bankruptcy, and that agreement has just been sort of totally upended by fuel prices.

And that's why we're seeing Spirit kind of in talks with the government for a bailout.

Historically, yes, they do come back down if demand starts to ease off, which might happen.

The airline executives who've been asked about this over the last week are actually kind of hopeful that it won't happen.

They think airfare has been an incredible deal over the last couple of years.

It just hasn't gone up as quickly as inflation.

And they think prices...

deserve to be higher, basically, and would like them to be higher.

So they're kind of hoping like, yeah, all this capacity, all these unprofitable flights are going to come out of the market.

Weak airlines might either go out of business or get acquired or might just have to shrink a little bit.

So there will be less supply and...

And demand is still good, so maybe fares will stay high this time.

You know, that's not a message that consumers love to hear, but it's definitely something their investors like to hear.

So that's what they've been talking about on their earnings calls the past week, that, you know, maybe this time is different and these higher fares are here to stay.

that this is something that they believe is very manageable for them.

And I think we're seeing a test of how the airline industry has changed over the years, that there have been a lot of mergers, there are fewer airlines than there used to be, and they sort of pride themselves on being more disciplined, not engaging in a race to the bottom on pricing,

Some of the airlines, at least in the industry, are a lot financially healthier than they've really ever been.

And that this is a crisis that is very manageable to them, given the way that this industry has changed.