Basically, as a rule, only use 1x frequencies. There are, however, exceptions.
Ultimately, the fewer seats you have on a route (you can get fewer seats by using smaller planes or running less frequencies), the more profit per seat you make.
It is true that you will make more money on a single route if you have more seats:
50 seats x 1 (frequency) x $100 = $5000 --- 50 seats x 2 (frequency) x $75 = $7500
However, you could be better utilising the plane on two routes:
50 x 2 x $75 = $7500 --- (50 x 1 x $100) + (50 x 1 x $100) = $10000
In words: if you use less frequencies, you can run more routes. Because you have a lower frequencies, you can charge more on each flight. Therefore, your average fare is higher, therefore you make more money.
The same can be applied to smaller planes, you might be able to buy two small planes or one big plane. The two smaller planes will be able to serve more cities, and get in higher fares, because they have less seats.
The exceptions
Gate rental: this is a fixed price, it doesn't matter if your plane can fit 500 people or 5, you pay the same gate rental. Gate rental is determined per flight, not per passenger. The above model works because you are able to fly to lots more airports by decreasing the frequency/plane capacity (and price). The flaw is naturally that by increasing the number of airports considerably, you increase gate rental costs. However, gate rental only becomes an issue when you are using very small planes (10 or so passengers).
Number of airports: there are a limited number of airports within a reasonable distance of any base. You must consider that long haul flights (for various reasons) are less profitable than short haul. If you adopt the above method, you will soon run out of airports to fly to. This means that, eventually, once all profitable, near by, airports are used up, and you can't create any more bases, the only way to make additional money is to increase the number of seats (as shown above, this is a valid, yet inefficient, way to make more money).
Competition: generally speaking, it is better to have a similar number of seats to the competition. The above method is based on the idea that by reducing the number of seats, you will dramatically increase the price of the fare. While this is true when you are the only airline (or perhaps you have one or two competitors), it is not true when you have many competitors or a competitor with very large aircraft (relative to your own). Whenever you use a larger aircraft, you will have to charge lower fares, however, having many competitors means that you do not have to lower it by as much (in a way, they have already lowered it for you). As another general rule, if your fare is much lower than anyone else's, it is probably too low.
Time: the biggest problem with the above method is time. If you have the time to create routes for five little prop aircraft rather one jet, then go ahead. However, you will soon find (with the massive profits you will make) that you no longer have time to put the 50 little aircraft you get every day on routes, that, perhaps, 10 jet aircraft is more manageable. This again comes back to the idea of more seats, albeit inefficiently, still making more money. If you only have time to put 10 aircraft on routes every day, you are better putting on 10 jet aircraft than 10 little prop aircraft. The same applies to frequencies. Think in terms of the first example, if you could only make one route per day, would you make a 1x frequency and earn $5000 or a 2x frequency and earn $7500 (or a 3x frequency and earn, $9000... etc.).
In summary
In light of all these problems, the method I initially outlined seems seriously flawed, it isn't. Gate rental is only an issue when you start using very small planes, competition is generally not too bad (i.e. they use reasonable frequencies/plane sizes), number of airports is not much of an issue for a very long time (until you have used up all your hub quota and flown to every airport within 100s to 1000s of nm from each hub). Time is the biggest issue. As a final rule, try to ensure you spend all your money on planes. Either put on extra frequencies or buy bigger planes. However, try not to buy any planes over 200 pax. Beyond that, they start to become simply too large to make profit. Try to similarly keep the number of frequencies from exceeding this (i.e. a 100 seat plane not much more than 2x). However, you will want to adjust these figures based on which airport you are based in. Hopefully this has been some help.
