LONDON (AP) - Spanair's fatal plane crash in Madrid could prove costly for the unprofitable carrier, but a strong insurance package is likely to insulate the airline from the excesses of potential compensation payouts and a grounding of its fleet.

Analysts said yesterday that it was still too early to grasp the full financial effects of the crash that killed 153 people because the responsibility for Europe's worst plane disaster in two decades has yet to be determined.

However, they said that while the reputation of Spanair - owned by Scandinavia's SAS AB - would certainly take a hit in the short-term, the carrier could survive in the longer run despite its pre-existing financial troubles.

Reportedly a unit of Bermuda-based insurer Ace was the lead insurance coverage for the plane.

"They have insurance, so that should cover them, unless it turns out to be Spanair's fault of course," said Sydbank analyst Jacob Pedersen, adding that airline passengers may also be temporarily scared off by traveling with Spanair. "But normally this effect only lasts for a few days instead of weeks and months."

SAS chief executive Mats Jansson declined to comment at a press conference in Madrid on the potential impact of the tragedy on the company's finances or reputation, while Spanair CEO Marcus Hedblom also declined to comment on the future of the carrier.

SAS has been trying to sell Spanair, Spain's second-largest airline after Iberia, for more than a year as the carrier struggles to turn a profit amid strong competition and a weakening domestic economy.

The Swedish company's failure to find a buyer is a situation that is now likely to last for some time, a fact reflected in a 3.4 percent drop in its share price to 42.20 kronor ($6.62) in Stockholm.

Jyske Bank analyst Karsten Sloth said that one of the biggest potential risks to Spanair's finances is the possibility that the airline is forced to ground its MD-80 aircraft fleet, either on a temporary or permanent basis, if the cause of Wednesday's accident proves to be technical.

Spanair said yesterday that the MD-82 airliner that crashed experienced overheating in an air intake valve before a first attempt at take-off, but added that it was not clear if that had anything to do with the crash.

"It will take some time to decide where responsibility should be placed," said Mr. Sloth.

The McDonnell Douglas MD-80 series of aircraft has had a troubled history. American Airlines was forced to ground its entire MD-80 series earlier this year after a safety audit, canceling around 6,000 flights as hydraulic wiring was checked.

Almost 400 people have died in accidents involving the MD-80 series over the past five years, including the 2007 One-Two-GO Airlines Flight 269 runway crash at Phuket International Airport in Thailand that killed 80 people and the 2005 West Caribbean Airways Flight 708 crash in northwest Venezuela that killed 160 passengers and crew.

Another major financial outlay for Spanair is likely to be compensation payouts to passengers and their families, although ABG Sundal Collier analyst Lars Heindorff said that will be mitigated by the solid insurance package that the carrier has in place.

The crash puts a cloud over Spanair's attempts to revive its financial fortunes.