Spirit Airlines Continues Targeting Southwest Airlines for Growth

For the first several years after its IPO, it seemed like Spirit Airlines (NASDAQ: SAVE) could do no wrong. The company's industry-leading cost structure and focus on maximizing ancillary revenue allowed it to earn strong profits while charging extremely low fares. This enabled Spirit to steadily gain share from the legacy carriers, which were focused on keeping prices high to offset rising fuel costs.

More recently, the legacy carriers -- especially American Airlines and United Continental -- have shifted toward an aggressive price-matching strategy. This has led to steep unit revenue declines at Spirit Airlines. As a result, its profit margin has started to sag and its stock price has plummeted.

Source: Fool.com