The announced their intention to start up the no frills airlines a week before Virgin Blue make the announcement last year. However, I don't think Spirit Airlines will be a reality by looking into the fate of Impulse and uncertainty of Virgin Blue.
They will never happen now I suspect, but their idea of using a secondary airport (Avalon between MEL and Geelong) was a good one: Ryanair uses this strategy with great success in Europe.
Indeed if an airline like virgin introduced flights from Avalon to SYD, BNE and ADL it could be a runaway success. It taps into not only the geelong area (maybe around 200 000 people) but also southern areas of melbourne.