You can either directly compete or aim for other airports first. Personally, when I start off at larger airports, I aim for airports that are medium/less popular but with enough demand to gain enough profit. I usually use the 'browse airports' function using my aircrafts range and scroll a bit further down the list (anywhere from 10-30 airports down depending on origin airport size) and start there and then when I'm big enough transition into direct competition at the busiest.
I agree. you've got to find perfect niches to grow from which helps you expand plus competitors might not operate there (at least not a ton of routes) and I've found that those heavily coveted routes (like JFK, ORD, MCO, LAX, SFO, SEA, LHR, CDG, PEK, HND, BKK, DEN, CLT, ATL, etc.) will always be bloated with larger airlines. and you can work around that. here are some tips to help you:
- Either avoid large city airports (like new york JFK, chicago ORD, los angeles LAX, etc.) and operate to secondary airports (like new york LGA or EWR, chicago MDW, long beach LGB (which is a suburb of los angeles) or Burbank BUR, etc.) those secondary cities usually see less airlines as they are smaller but on the plus side they have decent demand on routes. like when I fly to London for example I usually fly to Gatwick, or Stansted instead of heathrow.
- Start in secondary airports/cities. examples include (SLC, BUR, FLL, PHL, PIT, BOS, PDX, OAK, SJC, PDX, HOU, SAT, MSY, LGW, ORY, DME, FCO, DAX, NRT, etc.) these give you decent demand plus you might not see much competition competing for your routes. (I said might because you never know what'll happen) (plus cheaper operating gate costs)
- if you ever run into major competition you can avoid them (if you wish) but look at what they are offering and top that. Either with dropping ticket prices from $5-40 dollars under the lowest prices. or having much better service that the other. (I usually like 3-4 star IFS and 5 star IFE but that's just me ) the reason why is that many airlines set either scam IFS which is like setting 1 star meals at $50 but if you set the higher bar and have a better route reputation and services that can really help people choose to fly with you.
- But if the default ticket price is say for example $700 dollars but the lowest competitors price is say $300 dollars you don't necessarily need to drop below that. with a ticket price that low (and i've seen low prices like $1 ) it auto generates new demand so you just stay at the $700 price and you get the demand that's set in game. newer planes I think might help on the reputation but they probably on their on won't do much.
Do all of these and you can set pretty successful airlines (in fact my record for the largest airline I operated (Air England) had over 700 aircraft 400 destinations, 10 hubs, and a whoopin $200 billion dollars in cash, + asset worth. and the coolest part was my HQ/largest hub was LHR and that's one of the hardest airports in the world to operate to as it's in a great destination + a very large airport and many have heard of it and will automatically fly there) Take my wisdom I beg of you
hope this helps!