Spirit Airlines could end up in bankruptcy and be forced out of business because of a federal court decision to block a proposed sale to JetBlue Airways, according to a note from an airline analyst.

Unlike many airline bankruptcies, in which the airline in bankruptcy court either sheds debt and emerges a financially healthier company or ends up being purchased by another carrier and merged into its operations, the more likely scenario for Spirit would be a liquidation of its assets, according to a note from Helane Becker, an analyst with Cowen.

“We recognize this sounds alarmist and harsh, but the reality is we believe there are limited scenarios that enable Spirit to restructure,” she wrote in a note to clients Wednesday. “We believe Spirit will first look for an alternative buyer, but another airline may get the same pushback [from antitrust regulators.]”

Spirit was a pioneer in offering ultra-low base fares in the US market, but charging extra for virtually all other options, including carry-on bags. Its fares prompted major airlines to offer a certain number of no-frills “basic economy” seats on their planes. It also prompted concerns that its purchase by JetBlue would lead to higher fares across the industry — concerns which resulted in the Justice Department’s antitrust case that blocked the deal.

But if Becker is right, Spirit could still disappear. And if that happens it could lead to criticism of the Biden’s administration’s action to block the deal, and statements from Attorney General Merrick Garland and Transportation Secretary Pete Buttigieg praising the decision.

“After decades of airline consolidation, this ruling demonstrates the importance of putting competition first,” Buttigieg posted on X Wednesday. “This administration is holding the line on competition in order to support better consumer choice and lower airfares.”

All US airlines were hemorrhaging billions during the first two years of the pandemic, despite receiving billions of dollars of federal assistance to keep flying and prevent widespread layoffs. But as demand for air travel bounced back in 2022, so did profitability at the larger carriers.

But smaller carriers — like Spirit — that offer lower fares to attract bargain-hunting leisure travelers have continued to struggle. Following $1 billion in losses in 2020 and 2021, the company lost $264 million in the first nine months of 2023. It is forecast to lose another $175 million for the final three months of 2023, and an additional $310 million in losses this year, according to analysts surveyed by Refinitiv.

Spirit has $1.1 billion in debt coming due in September 2025. In a note Wednesday, Fitch said it will face challenges being able to refinance that debt.

“Spirit faces significant refinancing risk in the next year,” said the note from Fitch, which already had Spirit on watch from a downgrade from its current junk bond rating of B. “Meanwhile, the company faces serious headwinds toward improving its profitability including engine availability issues, overcapacity in certain leisure markets, and intense competition.”