That's how the game is. If he knows how to play, he can easily take your competition. Don't feel guilty, come on, this game is about competing.
edit: I checked the situation. His fleet consists of 16 aircraft, with 9 being turboprops. Can't be hard to take your competition with a nice discounted price... He has 9 routes which means he filled up some nice demand = more frequency = higher LF. If he just starts growing now he might be able to replace his fleet with more modern turboprops (ATR?) with good seating. His company value is 33 million after all.
The order backlog of the ATR is really small, might be a good chance to take those.