Spirit Airlines sees no constraints to its growth and performance targets: a model of a modern ULCC

Spirit Airlines concludes there is lot of road to cover on its growth trajectory as it still only accounts for roughly 1% to 2% of the US domestic space. While its ambitious growth targets for the next couple of years have raised some eyebrows, for the moment Spirit can be given the benefit of the doubt given its recent strong margin performance while posting double-digit capacity expansion of 22% in 2013.

The carrier's network strategy in 2014 mirrors its blueprint for 2013 - connecting the large US markets it has rapidly added during the past few years with new cities rather than adding an outsized number of brand-new markets.

By anchoring new routes to existing markets, Spirit has a decent chance to spool those routes up quickly, which is key in the carrier achieving its targeted operating margins of 16% to 18% for 2014.