This is true to a point. But, you are looking at it from a revenue viewpoint only, not a total profit viewpoint. If I ran a limo company, as an example....

I can charge x price and have 2 drives per night at $500 bucks each. That is $1000 per evening in revenue. Well, I could do that with one limo. So the fixed cost is y.

I decide to lower the price to $300 for each drive. I now get 4 customers per evening. This time I need 2 limos and another driver.

Revenue is now $1200 bucks, but my fixed costs have doubled. Revenue has gone up by only 20%, but fixed costs have doubled.

Lets say y is 100 bucks (cleaning the nasties out of the back seats, tires, wax, uniforms for the drivers, maintenance, etc) per ride. You were making a profit of $800 per evening. With the price drop and increased revenue, you are still making $800 bucks. Was it really worth it?

Increase fixed costs to $120 per ride. You were making $760, you are now only making, $720. You lose!

Lets say you break even as in the first example, there are other issues than just costs. Lets say every one gets new limos, you have to also to stay competitive. You've now got 2 limos to doff and replace instead of one. What if that second limo doesn't have bookings on that particular evening, your fixed costs stay the same (more or less - I mean tires won't wear and stuff like that), but there is no revenue. You might lose even more money from having it just parked for the evening than if you didn't have it at all.

This is a crude example, but you get the point. And the airline business is WAY more complex than this meager example.