I'm just trying to learn the game.. everything I've read says that to retain your passengers on a route, you have to increase your frequencys.. Well I did that when I started getting competition and that's when I got shut down because of over-supply... So how DO you retain your passengers?? Lower fares? That doesn't seem to have much effect.. Better Seats? More advertising? Like I said- I'm trying to learn.....
More frequency is fine, but not massively oversupplying the route. All that extra frequency with a bigger plane is just going to be costing you money.
Let's say there is a 300 passenger route, with 10 daily flights from all the competition. Every flight will get roughly 30 passengers. Let's say you fly 8 x 50 seats, supplying 400 seats. You'll have 8 x 30 passengers, so 240 and ~60% LFs. Your competitor flies 2 x 150 seats, and will get 2 x 30 pax, so ~20% LFs. The market share would be roughly 80/20. That's a simplified version, and it wouldn't be that pronounced, but that's what people mean when they say frequency wins. 8 x 50 seats vs 2 x 200 seats, the 8 x 50 will be getting more pax.
Routes with lots of competition will earn you less money than the same route with no competition. That's unavoidable.