I've been on AE for years but there's one thing I've always wondered about and never found an answer to. Why are the big airlines able to maintain such a powerful market position? And it varies from route to route. Take an example:
I'm flying a route LAX-DFW, between my two hubs. I had to lower my ticket price to $80, which is half of what the next competitor is offering ($160). Without doing so, my load factor literally drops to 50%, even if i raise the price by just $1. How does this even work? One possibility I've considered is that I fly 747's on the route while most of the other airlines fly smaller planes like A320's (and therefore achieve much higher frequency). But does it really make that much of a difference? What other factors lead to such a scenario? And when I drop my price to such ridiculously low values, it seems the market share of those airlines barely move at all.
It also varies from route to route - some routes, I just need to lower my price by a few dollars to get my load factors back up, but on other routes it seems like no matter how low I go nothing changes - like my DFW-LAX route, which ironically, is an inter-hub flight for me. What gives??