Hello everyone, I don't know if you all experience this, but my airline was in the top 5 and it came crashing down real bad. It all started in the year 1974-1976. I had like 130 passenger routes and 80 routes were under competition. Opened 4 hubs altogether in. My main hub was Dallas. Opened new ones in Toronto, Detroit, Atlanta and Mexico city. All my opponents either engaged in a price war with me or opened hubs where my routes operated and most of them had 747s. I played it slow, by using lockheeds 200, 500, DC 10-10 and DC 10-40, despite having higher satisfaction, I was making only 2-3k. I asked my competitors to stop engaging in price war and he just said since he is using 747s he has no choice but to keep the price the low and fill up the seats. I did not use stopovers in any routes and only focused on one way routes.
After thrashing my passenger routes, the cargo routes were not spared too. They used new aircrafts to compete with me and I was forced to buy new planes and had no routes for the older aircraft that was operating the same route. For example - My competition uses a 747 on Atlanta - Moscow and I replace my 707-320 with a DC 10-30, this route now makes 2-4k per turn and the 707-320 is put to lower ratings cities such as Atlanta - Vienna and despite renovation they still do not make even 1-2k. I was a little skeptical with using the 747 I admit, given the economic crisis that was nearing at 1977.
My satisfaction was atleast 10% above the competition despite having same pricing. I invested on fuel tanks too and yet had to exit the channel due to the above reasons. Any suggestions and criticism is welcome.
