Spirit Airlines maintains its long standing business thesis as new competitive dynamics unfold

Despite encountering investor trepidation during 2015 for its rapidly declining unit revenues, Spirit Airlines continues to trumpet the resilience of its ultra low cost business model. The airline is stressing the ULCC concept has only touched the surface in the United States, and much runway remains to stimulate traffic with its low fares.

Spirit is also dismissing the notion that it steals passengers from other airlines, and insists that it actually enlarges the passenger pool for other carriers in markets it enters. Although some of the large US airlines appear to be shaping long term strategies to compete with Spirit's low fares, Spirit believes their higher cost structures prohibit those airlines from matching the airline's low fares over the long term.

Only time will tell if Spirit's theories about the ability of large airlines to match prices over the long term will materialise. One wildcard in the heightened competition between Spirit and the large US network airlines is the ability of the bigger airlines to tout their superior operational performance, an area where Spirit lags behind its competitors.