Spirit Airlines has, for several years, had a simple model for growing rapidly while maintaining a high profit margin. It added dozens of routes connecting the biggest cities in the U.S., many of which are hubs for the big legacy carriers. Given that Spirit only operates one flight a day on most of its routes, the legacy carriers basically ignored it, allowing Spirit to undercut their fares and stimulate traffic.
However now the legacy carriers have started to aggressively match Spirit’s fares in order to protect their market share such as American Airlines and United Airlines new economy fares.
This has made it far less attractive for Spirit to compete with them in their hubs. As a result, Spirit Airlines has found a new target as it looks to maintain its high growth rate: Southwest Airlines!
Read more from the MotleyFool on this new strategy.