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A low-cost rival enters an airline's best route

The prompt

A full-service Australian airline flies about 2,000 passengers a day from Sydney to Melbourne, and about the same number back; the case works on one direction. A low-cost rival has just started flying the route at much lower fares. How should the airline respond?

Your interviewer will share data as you ask for it. Ask clarifying questions, state a hypothesis, then lay out your structure out loud before you calculate.

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