it's not a bug, the game assumes passengers go after the cheapest deals first, when it reaches any given airline the rest of the factors kick in (flight time, frequency, etc) but on small routes it's likely to be fierce and easy to crash prices; on heavy routes it's likely to have a lot of players or attract large aircraft driving those prices down. I believe it's a pretty good parallel to reality where routes between large cities wind up with many frequencies and cheap fares, while routes to small airports attract few frequencies and (tend towards) higher fares.
On a related note however, the ticket price saved in the database has been extended to two decimal points (to the €0.01 level of detail) to allow for a little more refined undercutting, to try to minimize the chances that someone will enter 499.99 to undercut and steal all the passengers.
