My guess is Southwest will need to follow suit. Right now it's Wanna Get Away prices are nowhere near competitive with deep discount carriers (for example, I can fly from Dallas to Chicago on United for $51 (plus fees) or Southwest for $141).There are other examples, but one is enough. Heck United is now frequently significantly cheaper to fly than Spirit.
The traveling public isn't absolutely stupid I expect Southwest load factors to take a hit in the near future -- then what does Southwest do? Answer: lower fares to be competitive.
I won't fly Spirit to save money, but I will United, American and Delta. Their low fares. will start to hurt Southwest soon.
There are still many existing nonstop routes with in the contiguous U.S. in the WN network that do not have any nonstop competition on ULCC's. WN also will not face any nonstop competition from AA, DL, or any ULCC's on its initial nonstop routes to Hawaii out of OAK, SJC, SMF, and SAN.
There are very few markets with WN service that have never been served by any ULCC's such as AMA, CRP, LBB, MAF, and ECP. In addition, DAL and MHT have never been served by any ULCC's, even though both DAL and MHT are located near airports that are served by ULCC's.
WN can actually do well in at least some of its markets without instituting basic economy fares, and WN still has competitive advantages over US3 carriers and ULCC's that stimulate demand for WN service on routes where WN competes against US3 carriers or ULCC's.