Oh boy, why not also limit all the airlines per country, East Germany, Soviet Union, Poland, Czechslovakia, Hungary, Bulgaria, Yugoslavia to only 1 per country, seeing that the bearaucratic gov'ts at the time discouraged free enterprise. And for the US, only 2 airlines will be allowed to operate international routes from there, everyone else will operate between the coasts.
Undercutting is part of the game, you probebly do it too when you enter a route with competition so you can make maximum profit. There is a price floor of 1 Euro, eventually, if the undercutters get sick of the game, they might leave and get deleted later.