Spirit Airlines (SAVE -0.67%) will report its fourth-quarter and full-year earnings next week. The budget airline is on track to post an uncharacteristic year-over-year profit decline both for the quarter and the full year.

Nevertheless, Spirit Airlines shares have rallied since September, as investors have started to turn their attention to the outlook for 2017 and beyond. That said, the stock has lost some ground in the past few days, in part because of JetBlue Airways' (JBLU -0.48%) weak revenue forecast.

JBLU Chart

Spirit Airlines vs. JetBlue Airways stock performance. Data by YCharts.

For Spirit Airlines stock to get back on track, the company will have to show that it isn't facing the same revenue pressure as JetBlue. Thus, the upcoming earnings report and Q1 forecast could be a critical moment for Spirit Airlines.

Spirit's investor update was solid

In mid-January, Spirit Airlines released a relatively favorable investor update, showing that revenue per available seat mile (RASM) declined approximately 3.6% year over year in Q4. Additionally, while unit costs increased, they didn't rise as much as the company's October forecast had indicated.

Thus, Spirit's investor update leaves a fairly narrow range of potential earnings outcomes for Q4. (That said, Spirit Airlines has sometimes issued conservative end-of-quarter investor updates and beaten them shortly thereafter.) Analysts now expect Spirit to report adjusted earnings per share of about $0.74. That would be down from $1.02 a year earlier, but better than the $0.68 average analyst EPS estimate from a month ago.

The JetBlue trap

Spirit Airlines' Q1 unit revenue forecast will give investors an initial read on the success of management's new route selection strategy. It will also shed some light on the company's margin prospects for 2017.

A Spirit Airlines airplane

Investors eagerly await Spirit Airlines' Q1 unit revenue forecast. Image source: Spirit Airlines.

In that regard, JetBlue's recent earnings report was a bad sign. While JetBlue's Q4 results were relatively solid, management stated that RASM was on track to fall 8%-9% year over year in January. February and March should be better, but based on this poor January performance, JetBlue is almost certain to report a significant year-over-year unit revenue decline in Q1.

This fizzling out of JetBlue's unit revenue recovery was disappointing to investors, especially considering that the carrier faced easy year-over-year comparisons. JetBlue blamed its poor unit revenue trajectory on several factors, some of which will affect Spirit Airlines as well.

First, leisure-oriented airlines such as JetBlue and Spirit will suffer from unfavorable holiday timing in Q1. Fortunately, from a long-term perspective, this is a non-issue. For example, while the timing of Easter will reduce Q1 unit revenue, it should increase unit revenue next quarter.

Second, JetBlue is investing in some strategic growth markets that are diluting its unit revenue results. While Spirit Airlines has also entered a lot of new markets recently, its new markets tend to mature faster than is the case for JetBlue, so the negative impact is likely to be smaller.

Third, JetBlue has significant exposure to Puerto Rico and Colombia, two markets where travel demand has fallen into a rut recently. Weak demand for flights to Colombia would probably affect JetBlue and Spirit roughly equally. However, Spirit only operates a few flights a day to Puerto Rico, whereas JetBlue is the largest airline there.

Finally, JetBlue has recently seen an influx of competition on routes from the New York area to Florida, one of the most important parts of its business. In this case, Spirit Airlines was probably a cause of JetBlue's woes rather than a fellow victim.

A JetBlue airplane

Rising competition from Spirit Airlines may be contributing to JetBlue's weak unit revenue trend. Image source: JetBlue Airways.

In all, it appears that some of the factors weighing on JetBlue's Q1 unit revenue performance will negatively impact Spirit as well, but perhaps not to as great an extent. Can Spirit Airlines overcome these headwinds and return to unit revenue growth anyway?

Spirit Airlines could still surprise

Despite facing some of the same headwinds, Spirit Airlines should see less unit revenue pressure in Q1 than JetBlue. It even has a decent shot at returning to unit revenue growth.

Spirit's recent growth spurt in Florida could play a big role in that respect. Spirit Airlines started numerous new routes to Florida in October and November. During Q4, these new routes were still early in the process of ramping up to peak profitability. Spirit says it typically takes about three months for a new route to mature.

However, these new routes are reaching maturity around now. Thus, they should contribute positively to Spirit's Q1 unit revenue performance, especially because routes to Florida have higher demand than most other domestic markets during the winter season.

As of now, most analysts expect Spirit Airlines to forecast a low- to mid-single-digit unit revenue decline for the first quarter. If its new routes to Florida are maturing as expected, Spirit Airlines could sail past those relatively modest expectations on the way to a unit revenue recovery.