So how does one go about making sure to cover all routes and trying to snuff competition? If the passengers are split evenly amongst the airlines, how can one outmaneuver the other? Pricing? Seat Configurations? Airline Rating?
There is only way - frequency. Say there is 2000 demand and there are 20xAirbus A321 (say 200 seats for easy math) covering the route. 2000/20 planes means each plane gets 100 pax. 200 seats per plane, so 50% load factor.
The only way to attack this is frequency, so put 20x daily Embrear's on the route (50 seats each for easy math). Still 2000 demand, but now there are 40 aircraft daily. 2000/40 = 50 pax/plane. So the 200 seat Airbus's are now 25% LF, and your 50 seat EMBs are 100% LF!
In the end if they are established and making money they can by and large ignore you as you do the monkey business above. You're like a Jack Russell yipping and yapping and dancing around. They're the big dog and will snooze on. The other way is wear them out. Things like seat, price etc swing LF by a few percent up and down, but no more than that.
Lets say you're both flying an A321 on the route, but player A has 100CI, 30% off fares, lux seating,brand new planes. Player B has 10CI, default fares, std seating, 20 year old Airbus's. I'd expect A to have about 54% of the route and player B 46%.
The above works on LH as well. If they're flying a 747, fly 2x787s. Same for cargo. If there's an MD11F, fly 2x757PFs
Simon