When a new competitor enters a market, incumbents are faced with a crucial decision on how to respond. While prior studies have shown incumbents’ marketing mix adjustments, such as pricing, in response to new entrants, there has been little research on how they adjust operationally. Accordingly, this study empirically investigates how incumbents operationally respond to new entrants. A large panel data from the US airline industry consisting of 12 airlines with 16,602 quarterly route-level observations over 14 years is analyzed to investigate the strategic adjustments of incumbents’ operational priorities in response to new rivals. The findings suggest that incumbents become more operationally focused in response to newcomers. Additionally, we find that business strategy, market competition, and market dominance impact incumbents’ operational responses to an entry. The study offers valuable insights for operations managers and policymakers of companies operating in competitive environments. © 2025 Elsevier Inc.