Spirit Airlines: touting solid financial position, but investors stay laser-focused on unit revenue

During the past year investor attention has pivoted away from Spirit's steady balance sheet and strong cost base to the company's deteriorating unit revenue - a scenario most US airlines find themselves dealing with as a result of lower fuel costs driving up capacity and eroding pricing traction.

Growing cash balances and sustaining favourable leverage remain crucial elements of Spirit's business strategy. Keeping a stable cash position allows the airline to fund its higher than average growth, which continues to deliver strong margins according to Spirit's argument.

Its industry-leading cost performance is key to Spirit's ability to sustain solid margins even as the US revenue environment remains weak. Although it faces some cost inflation in 2016, the airline remains focused on sustaining one of the best cost performances in the US airline business.