S31 · stakeholder simulation

Briefing the network team on a competitor capacity step

People, data and outputs in this scenario are simulated. Each stage is recorded when you commit; the reveal comes after.

5stages
40 minabout
0stages committed

The brief

The head of network planning (simulated) asks: "Competitors added seats in the spring. Did that cost us, and what do we change?" You have the synthetic airline sample database (flight_day, 2022-2024). In the simulator, competitor capacity on IST-ADB, IST-AYT and IST-FRA stepped up by 25% on 2024-03-01; the other eight routes did not change.

Figures below were recomputed from the database (March to May, unweighted means of the route-level values):

Group (routes)	Load factor 2023	Load factor 2024	Change, points	Passengers per departure, change	Revenue per departure, change
Competitor added capacity (ADB, AYT, FRA)	76.1% (mean of 3 routes)	72.0%	-4.1	-5.4%	-3.7%
No change (ATH, BKK, CDG, DIY, ESB, JFK, LHR, TZX)	76.6% (mean of 8 routes)	80.2%	+3.6	+4.7%	+4.7%

Change and refund-class mix are not available at this grain. The three affected routes are domestic (ADB, AYT) and intl-short (FRA); the comparison routes include both of those markets and intl-long.

Stage 1 of 5

The same three routes show lower load factor in March-May 2024 than in December-February 2024 (72.0% against 75.1%, about 3.1 points lower). The comparison routes also move seasonally.

Which comparison do you put in the briefing as the estimate of the competitor's effect?

The drop on the three affected routes from December-February to March-May, since both periods are recent, the airline's own schedule did not change between them, and the competitor's step is the only new event.The year-on-year change on the three affected routes alone (-4.1 points), because the competitor step is the only thing that changed on those routes in 2024.The March-May 2024 level of the affected routes against the comparison routes, since both are observed in the same months, seasonality is shared, and no route needs to be adjusted for its own history.The year-on-year change on the three affected routes (-4.1 points) minus the change on comparison routes (+3.6), checked against the same gap in the months before the break.