1> The problem is, the demand in the charts isn't actual demand. So, it isn't telling you that you're only going to sell "600 cheesecakes" so you better not make any more than that. It's telling you that you're only likely to sell somewhere around 600 cheesecakes at full price. In reality, you can actually achieve 150% of the displayed demand with sufficient marketing efforts and price reductions. So even if 2 airlines are putting 100% demand each on a route, doesn't mean they're each flying their planes half-empty -- it's quite possible, likely even, that they're actually more like 60-70% full which is a very profitable situation to be in.
2> In real-life, do you think an airline only opens a route somewhere because he thinks a whole lot of people want to go somewhere and the existing carriers aren't offering enough seats? Every single day new routes are opened in real-life even when the current carrier on that route isn't filling up their planes. And that's a fact that applies to everything from airline carriers to TV producers to apple farmers. They do it not necessarily because there are people who aren't getting XXXXX product (i.e. unsatisfied demand), they're doing it because they think they can perhaps draw some new people to the market but more importantly steal some away from the current guy who's making good money having the market all to himself and, perhaps eventually, run that original company out of the business and then they'll have it to themselves.
2A> When Southwest Airlines opens a new route from, say, Denver to Omaha they're not doing it because there's people sitting in Omaha waiting to go to Denver that can't manage to get onto a Frontier flight. They're not doing it because it's the absolute best route they could put that new plane they've got on to keep it the most filled. They're doing it as part of a larger strategy that extends beyond simply filling up a plane -- in this case, they'd do it to stifle Frontier's monopoly on that route, limit Frontier's ability to make money on that route, and therefore hinder Frontier's growth in other markets. You've got to look at a much bigger picture than simply how full one's planes are.
3> Just because there are other routes that are open doesn't necessarily mean they're "better". Especially not long-term. Route density is a huge deal. When you setup a new destination you have to hire dozens of new people to work that destination and you have to extend your Marketing campaign to a new destination (that alone can mean hundreds of thousands per week -- depending on the aircraft you're flying and the amount of pax there is, it can actually cost MORE to run the route than you get operating it). These costs are overhead costs that are not covered in your Route or Plane profitability figures, which are gross profit only, not net. In the end, it may (depending on a lot of factors) actually be better in terms of NET profit to fly a plane at 60% full to a destination you already fly to, than one at 90% full to a brand new destination.
4> For the same reasons as #3, it is better long-term to ensure that your competition doesn't secure these high-density, high-margin routes all for themselves while you go off and fly to 10 times the destinations just to secure the same number of pax. Long-term, it is a better strategy to limit your competitions' load factors on these routes, rather than conceding the route to them and going to some new route for yourself. Otherwise, in the long-term, your competition is going to have a significant cost advantage over you -- they'll ultimately expand quicker and, when/if they go after your routes they'll be able to charge a lower price and remain profitable than you'll be able to and you'll ultimately not survive.