Loadfactor is the metric you use to see how full your flights are. It is basically the percentage of seats filled out of all the seats for sale.
If you fly an aircraft with 100 seats once per day on a route, but only sell 50 of those seats, your loadfactor is 50 %. If you sell 98 of those seats, then your loadfactor is 98 %.
In Airline Mogul it is desirable to have a loadfactor of as close to 100% as possible. It is usually accomplished by lowering ticket prices on routes with loadfactors below 100 %.
If a competitor lowers their prices, your loadfactor might change, too. If a competitor leaves a route, your loadfactor does not change until you edit the route again.